COLLABORATION AGREEMENT

Collaboration Agreement

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EXELIXIS INC

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Title: COLLABORATION AGREEMENT
Governing Law: California Date: 3/9/2006
Industry: Biotechnology and Drugs Law Firm: Cooley Godward LLP Sector: Healthcare

COLLABORATION AGREEMENT, Parties: exelixis inc

EXHIBIT 10.35

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

COLLABORATION AGREEMENT

T HIS C OLLABORATION A GREEMENT (the “ Agreement ”) is made and entered into as of December 5, 2005 (the “ Execution Date ”) by and between E XELIXIS , I NC ., a Delaware corporation having its principal place of business at 170 Harbor Way, P.O. Box 511, South San Francisco, California 94083-0511 (“ Exelixis ”), and B RISTOL -M YERS S QUIBB C OMPANY , a Delaware corporation headquartered at 345 Park Avenue, New York, New York, 10154 (“ BMS ”). Exelixis and BMS are sometimes referred to herein individually as a “ Party ” and collectively as the “ Parties ”.

R ECITALS

A. BMS is a multinational health care company that has expertise and capability in developing and marketing human pharmaceuticals and has research and development programs, including expertise and proprietary technology relating to compounds that modulate the Liver X Receptor.

B. Exelixis is a drug discovery company that has expertise and proprietary technology relating to compounds that modulate the Liver X Receptor.

C. BMS and Exelixis desire to establish a collaboration to apply such Exelixis technology and expertise to the discovery, lead optimization and characterization of small molecule compounds, and to provide for the development and commercialization of novel therapeutic and prophylactic products based on such compounds.

N OW , T HEREFORE , the Parties agree as follows:

1. DEFINITIONS

Capitalized terms used in this Agreement (other than the headings of the Sections or Articles) have the following meanings set forth in this Article 1, or, if not listed in this Article 1, the meanings as designated in the text of this Agreement.

1.1 “Affiliate” means, with respect to a particular Party, a person, corporation, partnership, or other entity that controls, is controlled by or is under common control with such Party. For the purposes of the definition in this Section 1.1, the word “ control ” (including, with correlative meaning, the terms “ controlled by ” or “ under the common control with ”) means the actual power, either directly or indirectly through one (1) or more intermediaries, to direct or cause the direction of the management and policies of such entity, whether by the ownership of at least fifty percent (50%) of the voting stock of such entity, or by contract or otherwise.

[ * ] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , IS FILED WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED .

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1.2 “Alliance Manager” has the meaning set forth in Section 2.4(a).

1.3 “ANDA” means an Abbreviated New Drug Application filed with the FDA in conformance with applicable laws and regulations, or the foreign equivalent of any such application in any other country.

1.4 “BMS Compound” means: (a) those LXR Modulators or Dual LXR/FXR Modulators that are set forth in the Disclosure Letter and that are being contributed to the Collaboration by BMS as of [ * ] ; (b) any LXR Modulators or Dual LXR/FXR Modulators that are contributed to the Collaboration by BMS [ * ] at [ * ] and subject to [ * ] ; and (c) [ * ] .

1.5 “BMS Decision Point 4.5” or “BMS DP 4.5” means the point at which BMS determines that [ * ] .

1.6 “BMS Independent Activity Period” means the period, if any, commencing on the date [ * ] and ending on the first to occur of: (a) the date that [ * ] ; or (b) [ * ] .

1.7 “BMS Know-How” means all Information Controlled by BMS (other than BMS Patents) and its Affiliates [ * ] that is: (a) [ * ] for Exelixis to exercise the rights licensed or granted to it under Sections 10.4(d)(i) and 10.4(d)(ii); and/or (b) [ * ] : (i) to perform its obligations to the Collaboration under this Agreement; and (ii) for Exelixis to exercise the rights licensed or granted to it under Sections 5.3, 10.4(d)(iii) and 10.4(d)(iv).

1.8 “BMS Patents” means all Patents Controlled by BMS and its Affiliates, including Patents Controlled jointly with Exelixis, [ * ] that are: (a) [ * ] for Exelixis to exercise the rights licensed or granted to it under Sections 10.4(d)(i) and 10.4(d)(ii); and/or (b) [ * ] : (i) to perform its obligations to the Collaboration under this Agreement; and (ii) for Exelixis to exercise the rights licensed or granted to it under Sections 5.3, 10.4(d)(iii) and 10.4(d)(iv).

1.9 “Collaboration” means all the activities performed by or on behalf of either Exelixis or BMS in the course of performing work contemplated in Article 2.

1.10 “Collaboration Compound” means any: (a) Exelixis Compound; (b) BMS Compound; (c) Derivative that is identified or created by [ * ] ; (d) Derivative that is identified or developed by [ * ] ; or (e) Derivative that is identified or developed by [ * ] . For clarity, Collaboration Compounds exclude [ * ] .

1.11 “Collaborative Research Period” has the meaning set forth in Section 2.5.

1.12 “Committee” means either of the Joint Research Committee or the Discovery Working Group, as the case may be.

1.13 “Competitive Compound” means any Small Molecule Compound, [ * ] that directly binds and modulates LXR [ * ] based on displaying [ * ] .

1.14 “Controlled” means, with respect to any compound, material, Information or intellectual property right, that the Party owns or has a license to such compound, material, Information or intellectual property right and has the ability to grant to the other Party access, a

license or a sublicense (as applicable) to such compound, material, Information or intellectual property right as provided for herein without violating the terms of any agreement or other arrangements with any Third Party existing at the time such Party would be first required hereunder to grant the other Party such access, license or sublicense.

1.15 “Derivatives” means all: (a) LXR Modulators or Dual LXR/FXR Modulators that are made [ * ] ; and (b) [ * ] .

1.16 “Diligent Efforts” means the carrying out of obligations or tasks in a sustained manner consistent with the efforts a Party devotes to a product or a research, development or marketing project of similar market potential, profit potential or strategic value resulting from its own research efforts, based on conditions then prevailing. Diligent Efforts requires that the Party: (a) promptly assign responsibility for such obligations to specific employee(s) who are held accountable for progress and monitor such progress on an on-going basis, (b) set and consistently seek to achieve specific and meaningful objectives for carrying out such obligations, and (c) consistently make and implement decisions and allocate resources designed to advance progress with respect to such objectives.

1.17 “Disclosure Letter” means one or more mutually agreed written letters or memoranda that are delivered by each of Exelixis and BMS to the other contemporaneously with the execution of this Agreement and are identified therein as a Disclosure Letter contemplated by this Agreement and any amendments or replacement thereof approved in writing by both Parties.

1.18 “Discovery Working Group” or “DWG” means the committee described in Section 2.2(d).

1.19 “Dollars” or “$” means the legal tender of the United States of America.

1.20 “Dual LXR/FXR Modulator” means any Small Molecule Compound that: (a) directly binds and modulates LXR and FXR [ * ]; and (b) [ * ] based on displaying [ * ].

1.21 “ECN” or “Early Candidate Nomination” means a compound or other substance that has been approved by BMS [ * ] . This decision point is known within BMS as “ Decision Point 3.0 ” or “ DP3.0 ”. This decision point is typically made [ * ] prior to [ * ] . For such a transition to be considered, the relevant scientific submissions for such compound shall generally need to include: [ * ] . For clarity, not all [ * ] shall be necessarily completed at DP3.0; however, all such [ * ] must be completed before a decision to [ * ] can be reached. Typically, the [ * ] shall also be [ * ] .

1.22 “Effective Date” has the meaning set forth in Section 11.6.

1.23 “EU” means the European Union, as its membership may be altered from time to time, and any successor thereto. The member countries of the European Union as of the Effective Date are Belgium, Denmark, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, Netherlands, Austria, Portugal, Finland, Sweden, the United Kingdom, Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Malta, and Cyprus.

1.24 “Exelixis Compounds” mean: (a) those LXR Modulators or Dual LXR/FXR Modulators that are set forth in the Disclosure Letter and that are being contributed to the Collaboration by Exelixis as of [ * ] ; (b) any LXR Modulators or Dual LXR/FXR Modulators that are contributed to the Collaboration by Exelixis [ * ] at [ * ] and subject to [ * ] ; and (c) [ * ] .

1.25 “Exelixis Know-How” means all Information Controlled by Exelixis (other than Exelixis Patents) and its Affiliates [ * ] that is [ * ] for BMS to exercise the rights licensed or granted to it under Sections 5.1 and 10.4 hereof and/or to perform its obligations to the Collaboration under this Agreement.

1.26 “Exelixis Patents” means all Patents Controlled by Exelixis and its Affiliates, including Patents Controlled jointly with BMS, as of [ * ] that are [ * ] for BMS to exercise the rights licensed or granted to it under Sections 5.1 and 10.4 hereof and/or to perform its obligations to the Collaboration under this Agreement. It is understood and agreed that “Exelixis Patents” include, without limitation, those issued and published Patents listed on Schedule 1.26 .

1.27 “Exelixis Prosecuted Patents” has the meaning set forth in Section 8.3(a)(i).

1.28 “FDA” means the United States Food and Drug Administration, and any successor thereto.

1.29 “FTE” means the equivalent of a full-time scientist’s work time over a twelve (12) month period (including normal vacations, sick days and holidays). The portion of an FTE year devoted by a scientist to a particular activity or program shall be determined by dividing the number of full working days during any twelve (12) month period devoted by such scientist to such activity or program by the total number of working days during such twelve (12) month period.

1.30 “FXR” means: (a) the gene for the Farnesoid X Receptor (for any species); (b) the protein encoded by such gene; and (c) all subtypes, mutants, variants and fragments thereof.

1.31 “Generic Product” means, with respect to a particular Product in a country, a pharmaceutical product that: (a) contains the same Collaboration Compound(s) as such Product (or equivalent as determined by the relevant regulatory authority); and (b) is approved for use in such country (pursuant to 21 U.S.C. 355(b)(2), an ANDA, a separate NDA, compendia listing, other drug approval application or otherwise), whether for use as monotherapy or for use in combination with any other vaccine, biologic or compound.

1.32 “HSR Act” means the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended from time to time, and the rules, regulations, guidance and requirements promulgated thereunder as may be in effect from time to time.

1.33 “IND” means an Investigational New Drug Application filed with the FDA in conformance with applicable laws and regulations, or the foreign equivalent of any such application in any other country.

1.34 “Information” means information, results and data of any type whatsoever, in any tangible or intangible form whatsoever, including, databases, practices, methods, techniques,

specifications, formulations, formulae, knowledge, know-how, skill, experience, test data including pharmacological, biological, chemical, biochemical, toxicological and clinical test data, analytical and quality control data, stability data, studies and procedures.

1.35 “Invention” means any and all inventions and improvements thereto, invented or discovered by a Party in the performance of its obligations under this Agreement.

1.36 “Joint Invention” means any Invention invented or discovered jointly by employee(s) or agent(s) of both Parties.

1.37 “Joint Research Committee” or “JRC” means the committee described in Section 2.2(a).

1.38 “Knowledge” means, with respect of a Party, the good faith understanding of the facts and information in the possession of an officer of such Party, or any in-house legal counsel of, or in-house Patent agents employed by, such Party or its Affiliates, without any duty to conduct any additional investigation with respect to such facts and information by reason of the execution of this Agreement. For purposes of this definition, an “officer” means any person in the position of vice president, senior vice president, president or chief executive officer of a Party.

1.39 “Launch” means, for each Product in each country, the first arm’s-length sale to a Third Party for use or consumption by the public of such Product in such country after Regulatory Approval of such Product in such country. A Launch shall not include any Product sold for use in clinical trials, for research or for other non-commercial uses, or that is supplied as part of a compassionate use or similar program

1.40 “Lead Compound” means the Exelixis Compound set forth in the Disclosure Letter.

1.41 “Listed NHR” means: (a) the genes (for any species) for any nuclear hormone receptors listed in Schedule 1.41 as of the Effective Date; (b) the genes (for any species) for any nuclear hormone receptors added to Schedule 1.41 after the Effective Date pursuant to Section 2.6(c); (c) the proteins encoded by such genes described in subsections (a) and (b); and (d) all subtypes, mutants, variants and fragments thereof. Notwithstanding anything to the contrary, Listed NHRs do not include FXR in conjunction with LXR as contemplated by this Agreement.

1.42 “LXR” means: (a) the gene for the Liver X Receptor (for any species); (b) the protein encoded by such gene; and (c) all subtypes (including the alpha and beta subtypes), mutants, variants and fragments thereof.

1.43 “LXR Modulator” means any Small Molecule Compound that: (a) directly binds and modulates LXR [ * ] but not FXR; and (b) [ * ] based on displaying [ * ] .

1.44 “Major Market Countries” means [ * ].

1.45 “Major Territory” means each of the following territories: [ * ] .

1.46 “NDA” means a New Drug Application filed with the FDA in conformance with applicable laws and regulations, or the foreign equivalent of any such application in any other country.

1.47 “Net Sales” means the amount invoiced or otherwise billed by BMS or its Affiliate or sublicensee for sales or other commercial disposition of a Product to a Third Party purchaser, less the following to the extent included in such billing or otherwise actually allowed or incurred with respect to such sales: (a) discounts, including cash, trade and quantity discounts, price reduction programs, retroactive price adjustments with respect to sales of a product, charge-back payments and rebates granted to managed health care organizations or to federal, state and local governments (or their respective agencies, purchasers and reimbursers) or to trade customers, including but not limited to, wholesalers and chain and pharmacy buying groups; (b) credits or allowances actually granted upon rejections or returns of Products, including for recalls or damaged goods; (c) freight, postage, shipping and insurance charges actually allowed or paid for delivery of Products, to the extent billed; (d) customs duties, surcharges and other governmental charges incurred in connection with the exportation or importation of a Product; (e) bad debts relating to sales of Products that are actually written off by BMS in accordance with U.S. generally accepted accounting principles, consistently applied, during the applicable royalty calculation period; and (f) taxes, duties or other governmental charges levied on, absorbed or otherwise imposed on sale of Products, including value-added taxes, or other governmental charges otherwise measured by the billing amount, when included in billing, as adjusted for rebates and refunds, but specifically excluding taxes based on net income of the seller; provided that all of the foregoing deductions are calculated in accordance with generally accepted accounting principles consistently applied throughout the Party’s organization.

Notwithstanding the foregoing, if any Product is sold under a bundled or capitated arrangement with other BMS products, then, solely for the purpose of calculating Net Sales for royalty purposes hereunder, any discount on such Products sold under such an arrangement shall be no greater, on a percentage basis based on the gross selling price prior to discount, than the largest percentage discount applied on any other ethical pharmaceutical product sold within such bundled arrangement for the applicable accounting period. In case of any dispute as to the applicable discount numbers under the preceding sentence, the determination of same shall be calculated and certified by BMS’ independent public accountants, whose decision shall be binding.

A sale of a Product is deemed to occur upon invoicing In the event that BMS, after reasonable efforts, cannot calculate accurately the Net Sales of a sublicensee in a particular country, the Parties shall meet and negotiate in good faith an appropriate means for calculating Net Sales in such a situation.

For sake of clarity and avoidance of doubt, sales by BMS, its Affiliates or sublicensees of a Product to a Third Party distributor of such Product in a given country shall be considered a sale to a Third Party customer. Any Products used (but not sold for consideration) for promotional or advertising purposes or used for clinical or other research purposes shall not be considered in determining Net Sales hereunder.

In the event a Product is sold as an end-user product consisting of a combination of active functional elements or as a combined product and/or service, Net Sales, for purposes of determining royalty payments on such Product, shall be calculated by multiplying the Net Sales of the end-user product and/or service by the fraction A over A+B, in which A is the gross selling price of the Product portion of the end-user product and/or service when such Product is sold separately during the applicable accounting period in which the sales of the end-user product were made, and B is the gross selling price of the other active elements and/or service, as the case may be, of the end-user product and/or service sold separately during the accounting period in question. All gross selling prices of the elements of such end-user product and/or service shall be calculated as the average gross selling price of the said elements during the applicable accounting period for which the Net Sales are being calculated. In the event that, in any country or countries, no separate sale of either such above-designated Product or such above designated elements of the end-user product and/or service are made during the accounting period in which the sale was made or if gross retail selling price for an active functional element, component or service, as the case may be, cannot be determined for an accounting period, Net Sales allocable to the Product in each such country 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, on a country-by-country basis, variations in potency, the relative contribution of each active agent, component or service, as the case may be, in the combination, and relative value to the end user of each active agent, component or service, as the case may be. Notwithstanding the foregoing, the Parties agree that, for purposes of this paragraph, drug delivery vehicles, adjuvants, and excipients shall not be deemed to be “ active ingredients ” or “ active functional elements ”.

1.48 “Non-LXR Modulator” means any: (a) Small Molecule Compound that is identified or created by [ * ] by [ * ] and that is not an LXR Modulator or a Dual LXR/FXR Modulator; (b) Small Molecule Compound that: (i) is identified or developed by [ * ] , through [ * ] ; and (ii) is not an LXR Modulator or a Dual LXR/FXR Modulator; and [ * ] .

1.49 “Patent” means all: (a) unexpired letters patent (including inventor’s certificates) which have not been held invalid or unenforceable by a court of competent jurisdiction from which no appeal can be taken or has been taken within the required time period (and which have not been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise, or been abandoned in accordance with or as permitted by the terms of this Agreement or by mutual written agreement), including any substitution, extension, registration, confirmation, reissue, re-examination, supplementary protection certificates, confirmation patents, patent of additions, renewal or any like filing thereof; (b) pending applications for letters patent which have not been canceled, withdrawn from consideration, finally determined to be unallowable by the applicable governmental authority or court for whatever reason (and from which no appeal is or can be taken), and/or abandoned in accordance with or as permitted by the terms of this Agreement or by mutual written consent, including any continuation, division or continuation-in-part thereof and any provisional applications; and (c) any international counterparts to (a) and (b) above.

1.50 “Phase I Clinical Trial” means a trial on sufficient numbers of normal volunteers and patients that is designed to establish that a pharmaceutical product is safe for its intended use, and to support its continued testing in Phase IIa Clinical Trials.

1.51 “Phase IIa Clinical Trial” means a trial on sufficient numbers of patients that is designed to provide a preliminary determination of safety and efficacy in the target patient population over a range of doses. For sake of clarity, [ * ] .

1.52 “Phase IIb Clinical Trial” means a controlled clinical trial which utilizes the pharmacokinetic and pharmacodynamic information obtained from one (1) or more previously conducted Phase I Clinical Trial(s) and/or Phase IIa Clinical Trial(s) in order to confirm the optimal manner of use of a pharmaceutical product (dose and dose regimen) prior to initiation of the pivotal Phase III Clinical Trials of such pharmaceutical product. [ * ] .

1.53 “Phase III Clinical Trial” means a trial on sufficient numbers of patients that is designed to establish that a pharmaceutical product is safe and efficacious for its intended use, and to define warnings, precautions and adverse reactions that are associated with the pharmaceutical product in the dosage range to be prescribed, and to support Regulatory Approval of such pharmaceutical product or label expansion of such pharmaceutical product.

1.54 “Post-Termination Compound” means: (a) any Competitive Compound for which BMS, its Affiliate or sublicensee [ * ] subsequent to expiration of the Collaborative Research Period; or (b) any LXR Modulator or a Dual LXR/FXR Modulator for which BMS [ * ] . For clarity, Post-Termination Compounds shall not include: [ * ] ; and [ * ] .

1.55 “Product” means any therapeutic or prophylactic product (for use in animals or humans) that comprises or incorporates any: (a) Collaboration Compound; or (b) Post-Termination Compound.

1.56 “Regulatory Approval” means any and all approvals (including supplements, amendments, pre- and post-approvals, pricing and reimbursement approvals), licenses, registrations or authorizations of any national, supra-national (e.g., the European Commission or the Council of the EU), regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity, that are necessary for the manufacture, distribution, use or sale of a Product in a regulatory jurisdiction.

1.57 “Research Plan” has the meaning set forth in Section 2.6(a).

1.58 “Reverted Compounds” means any Collaboration Compounds licensed to Exelixis under Sections 10.4(d)(i) and (ii).

1.59 “Reverted Compounds License Agreement” has the meaning set forth in Section 10.4(d)(v).

1.60 “Royalty Term” has the meaning set forth in Section 7.7.

1.61 “Safety Reasons” has the meaning set forth in Section 10.5.

1.62 “Scaffold” means any: (a) scaffold of [ * ] ; (b) new scaffold added in accordance with Section 2.13; and (c) [ * ] . For clarity, a scaffold is [ * ] to another scaffold described in the foregoing subsections (a) and (b) only if [ * ] .

1.63 “Small Molecule Compound” means a molecule with a molecular weight less than or equal to [ * ] .

1.64 “Sole Invention” means any Invention invented or discovered solely by a Party and its employees or agents.

1.65 “Success Criteria” has the meaning set forth in Section 2.6(b).

1.66 “Third Party” means any entity other than: (a) Exelixis; (b) BMS; or (c) an Affiliate of either Party.

1.67 “Valid Claim” means (a) a claim in an issued Patent that has not: (i) expired or been canceled; (ii) been declared invalid by an unreversed and unappealable or unappealed decision of a court or other appropriate body of competent jurisdiction; (iii) been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise; or (iv) been abandoned in accordance with or as permitted by the terms of this Agreement or by mutual written agreement of the Parties; or (b) a claim under an application for a Patent that has been pending [ * ] from its date of filing, and which has not been canceled, withdrawn from consideration, finally determined to be unallowable by the applicable governmental authority or court for whatever reason (and from which no appeal is or can be taken), or abandoned.

2. COLLABORATION

2.1 Overview. The general goals and intent of the Collaboration are to apply each Party’s technology to discover, optimize and characterize Collaboration Compounds that are LXR Modulators or Dual LXR/FXR Modulators that may be developed into Products by BMS. Each Party shall have responsibilities under the Collaboration in accordance with the allocation of duties set forth in the Research Plan, including responsibilities for discovery, lead optimization and in vitro and in vivo characterization of Collaboration Compounds up to receipt of approval as an ECN for such Collaboration Compounds.

2.2 Joint Research Committee and Discovery Working Group.

(a) Membership of JRC . The JRC shall be composed of [ * ] members. Within [ * ] after the Effective Date, each Party shall appoint [ * ] representatives to the JRC. Each Party may replace its appointed JRC representatives at any time upon written notice to the other Party. Each Party shall designate one (1) of its representatives as co-chairperson of the JRC. Each of the co-chairpersons shall be responsible, on an alternating basis with the BMS co-chairperson having responsibility with respect to the initial meeting, for working with the Alliance Managers to schedule meetings, prepare and circulate an agenda in advance of each meeting, and to prepare and issue minutes of each meeting within [ * ] days thereafter. Any JRC member may add topics to the draft agenda. Each Party may invite, with the approval of the other Party (which shall not be unreasonably withheld, delayed or conditioned), additional employees or consultants (provided such employees and consultants: (i) have contractual confidentiality obligations to such Party that are at least as stringent as those set forth in this Agreement; and (ii) are under intellectual property assignment obligations to such party in accordance with Section 8.1(c)) to attend one (1) or more meetings of the JRC as ad hoc, non-voting guests.

(b) Decision-making . The [ * ] JRC representatives of each Party shall collectively have one (1) vote, and the JRC shall operate by unanimous consent of all JRC members present and in accordance with the principles set forth in this Article 2. In the event of a dispute between the Parties with regard to the performance of the Collaboration, the matter shall be first referred to the [ * ] for resolution. If these two (2) individuals are unable to resolve the dispute, then the matter shall be elevated to [ * ] . If these two (2) individuals are unable to resolve the dispute, then the matter shall be elevated to [ * ] . If these two (2) individuals are unable to resolve the dispute, then, subject to the last sentence of this Section 2.2(b) and to Section 2.2(c), [ * ] shall have the final decision so long as such decision does not conflict with the terms of the Agreement. Notwithstanding anything to the contrary, no decision by a Party shall require the other Party to: (i) breach any obligation or agreement that such other Party may have with or to a Third Party; (ii) perform any activities that are materially different or greater in scope than those provided for in the then-current Research Plan; or (iii) incur any material financial costs in addition to those expressly described in Article 7 of this Agreement.

(c) Exceptions to Decision-making. Notwithstanding anything to the contrary, [ * ] shall not have the final decision with respect to any dispute involving any of the following: (i) moving the performance of the Collaboration away from the identification, development and commercialization of LXR Modulators and Dual LXR/FXR Modulators to the identification, development and commercialization of other compounds; (ii) reducing the number of [ * ] required by the Research Plan below [ * ] FTEs during each of the first [ * ] years of the Research Term; (iii) unilaterally changing the [ * ] in a manner that produces [ * ] that are not reasonably consistent with [ * ] ; (iv) unilaterally changing the [ * ] of an LXR Modulator or Dual LXR/FXR Modulator; (v) unilaterally changing the [ * ] for a Competitive Compound; (vi) requiring [ * ] ; (vii) changing the performance of the Research Plan to include new technology (e.g., assays, targets, or animal models) for which [ * ] would bear the sole cost pursuant to [ * ] ; (viii) unilaterally adding new receptors to the list of Listed NHRs under Section 2.6(c); or (ix) unilaterally contributing new compounds or scaffolds (as applicable) to the Agreement in contravention of the process described in Section 2.13.

(d) Responsibilities of the JRC and DWG . The JRC shall be responsible for the overall planning and execution of the Collaboration and the approval and oversight of the Research Plan. The DWG shall report to the JRC and shall manage the day-to-day activities and decisions required under the Collaboration. Membership of the DWG shall be determined by the JRC and shall not be limited with respect to number of appointees (in total or from either Party). Each Party shall designate one (1) of its representatives as co-chairperson of the DWG. At its meetings, the DWG shall evaluate the data generated by the Parties in the course of carrying out the Research Plan, shall recommend project prioritization within the Research Plan (subject to approval by the JRC), shall perform those activities specifically described in this Agreement, and may recommend revisions to the Research Plan to the JRC. At each DWG meeting, the DWG shall summarize the progress in carrying out the Research Plan since the last DWG meeting, bring to attention of the JRC any overarching issues or significant changes in the Research Plan, and address any issues raised at its previous meeting. To the extent necessary to carry out its responsibilities, a Party’s DWG and/or JRC members shall be granted access to the other Party’s Confidential Information relevant to any decision required to be made by the DWG or the JRC.

2.3 Meetings of JRC and DWG. During the Collaborative Research Period: (a) the JRC shall meet quarterly by audio or video teleconference and, at a minimum, once each [ * ] in person (which in-person meeting shall be held on an alternating basis in New Jersey and in San Francisco); and (b) the DWG shall meet [ * ] by audio or video teleconference and, at a minimum, [ * ] in person (which in-person meeting shall be held on an alternating basis in New Jersey and in San Francisco). With the consent of the representatives of each Party serving on a particular Committee, other representatives of each Party may attend meetings of that Committee as nonvoting observers (provided such representatives: (i) have contractual confidentiality obligations to such Party that are at least as stringent as those set forth in this Agreement; and (ii) are under intellectual property assignment obligations to such party in accordance with Section 8.1(c)). Meetings of a Committee shall be effective only if at least one (1) representative of each Party is present or participating. Each Party shall be responsible for all of its own expenses of participating in the Committee meetings. The Parties shall endeavor to schedule meetings of the JRC and the DWG at least [ * ] in advance.

2.4 Alliance Managers.

(a) Appointment. Each of the Parties shall appoint an individual (each, an “ Alliance Manager ”) who possesses a general understanding of the scientific and business issues relevant to this Agreement. Each Party may change its designated Alliance Manager from time to time upon prior written notice to the other Party. Any Alliance Manager may designate a substitute to temporarily perform the functions of that Alliance Manager by prior written notice to the other Party.

(b) Responsibilities. The Alliance Managers shall use good faith efforts to attend all Committee meetings and support the co-chairpersons of each Committee in the discharge of their responsibilities. Alliance Managers shall be nonvoting participants in such Committee meetings. An Alliance Manager may bring any matter to the attention of any Committee if such Alliance Manager reasonably believes that such matter warrants such attention. Each Alliance Manager shall be charged with creating and maintaining a collaborative work environment within and among the Committees. In addition, each Alliance Manager: (a) shall be the point of first referral in all matters of [ * ] ; (b) shall identify and bring [ * ] to the attention of the appropriate Committee in a timely manner; (c) shall plan and coordinate cooperative efforts and internal and external communications; and (d) shall take responsibility for ensuring that governance activities, such as the conduct of required Committee meetings and production of meeting minutes, occur as set forth in this Agreement, and that relevant action items resulting from such meetings are appropriately carried out or otherwise addressed.

2.5 Collaborative Research Period. Subject to Section 10.2, the Collaborative Research Period shall begin on the Effective Date and continue for two (2) years thereafter. BMS shall have the option to extend the Collaborative Research Period for an additional one (1)-year term by providing written notice to Exelixis no later than [ * ] before the end of the initial two (2)-year Collaborative Research Period. The Collaborative Research Period may be further extended (i.e., beyond such three (3)-year period) upon mutual agreement of the Parties, and the Parties may choose to agree to an alternate level of research funding with respect to such extension.

2.6 Research Plan; Success Criteria; Additional Listed NHRs.

(a) The Parties have agreed in writing upon a detailed plan for the research to be carried out by the Parties during the Collaborative Research Period, which is set forth in the Disclosure Letter and incorporated herein by reference (the “ Research Plan ”). The Research Plan includes each Party’s respective obligations in furtherance of the Collaboration and timelines for completion of key stages, and the Research Plan shall provide guidance as to whether the work performed by each Party meets the standards of Diligent Efforts. The ultimate goal of the Research Plan shall be to identify LXR Modulators and Dual LXR/FXR Modulators. The DWG shall review the Research Plan at least [ * ] and may propose to the JRC revised versions of the Research Plan that are consistent with the terms of this Agreement. The revised Research Plan may only be approved by the JRC, subject to Sections 2.2(b) and 2.2(c). Once approved by the JRC, such revised Research Plan shall replace the prior Research Plan. During the Collaborative Research Period, each Party shall use Diligent Efforts to perform the tasks assigned to it in the Research Plan then in effect.

(b) The Research Plan shall also contain success criteria for the submission of a compound for approval as an ECN (the “ Success Criteria ”), which are incorporated by reference herein. The Success Criteria are as set forth in the Disclosure Letter. Any Success Criteria that are not reasonably ascertainable or completely known as of the Effective Date, or requiring adjustment based on results obtained during the conduct of the Collaboration, shall be supplemented and/or modified as recommended by the DWG and reviewed and approved by the JRC from time to time as appropriate.

(c) From [ * ] during the term of the [ * ] , [ * ] may decide to add additional targets to the list of Listed NHRs. The Parties shall discuss in good faith whether to add any such additional targets, and such targets shall only be added with the prior written agreement of [ * ] .

2.7 Obligations of Parties. Exelixis and BMS shall provide the DWG and the JRC and their respective authorized representatives with reasonable access during regular business hours to all records, documents, and Information relating to the performance of its obligations under the Collaboration which such Committee may reasonably require in order to perform its obligations hereunder, provided that if such documents are under a bona fide obligation of confidentiality to a Third Party, then Exelixis or BMS, as the case may be, may withhold access thereto to the extent necessary to satisfy such obligation.

2.8 Collaboration Guidelines. Subject to the terms of this Agreement, the activities and resources of each Party shall be managed by such Party, acting independently and in its individual capacity. The relationship between Exelixis and BMS is that of independent contractors, and shall not constitute a partnership, joint venture or agency, and neither Party shall have the power to bind or obligate the other Party in any manner, other than as is expressly set forth in this Agreement.

2.9 Conduct of Research. The Parties shall use Diligent Efforts to conduct their respective tasks throughout the Collaboration and shall conduct the Collaboration in good scientific manner, and in compliance in all material respects with the requirements of applicable laws, rules and regulations and all applicable good laboratory practices to attempt to achieve their objectives as efficiently and expeditiously as reasonably practicable.

2.10 Records. Each Party shall maintain complete and accurate records of all work conducted under the Collaboration and all results, data and developments made pursuant to its efforts under the Collaboration. Such records shall be complete and accurate and shall fully and properly reflect all work done and results achieved in the performance of the Collaboration in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes. Each Party shall maintain such records for a period of [ * ] after such records are created; provided that the following records may be maintained for a longer period, in accordance with each Party’s internal policies on record retention, provided that in no case shall such period be shorter than [ * ] from the date of creation of such records: (a) [ * ] ; and (b) [ * ] records that the other Party reasonably requests be retained in order to ensure the preservation, prosecution, maintenance or enforcement of [ * ] . Either Party shall have the right to review and copy such records of the other Party at reasonable times to the extent necessary or useful for it to conduct its obligations or enforce its rights under this Agreement.

2.11 Reports. During the Collaborative Research Period, each Party shall report to the JRC no less than [ * ] and shall submit to the other Party and the JRC a [ * ] written progress report summarizing the work performed under the Collaboration, including, with respect to Exelixis, the [ * ] with respect to the activities set forth in the Research Plan, and, with respect to BMS, the status of each Collaboration Compound that reaches [ * ] (as defined in the Research Plan) and each Collaboration Compound that reaches [ * ] . If reasonably necessary for a Party to perform its work under the Collaboration or to exercise its rights under the Agreement, such Party may request that the other Party provide more detailed information and data regarding such results reported by such other Party, and such other Party shall promptly provide the requesting Party with information and data as is reasonably related to such request, including any records created by a Party pursuant to Section 2.10. All such reports shall be considered Confidential Information of the Party providing same.

2.12 Database. The Parties shall work together to evaluate the possibility and practicality of setting up an electronic data-sharing arrangement to allow each Party to access Confidential Information of the other Party consisting of [ * ] , including all [ * ] . In the event that such a data-sharing arrangement is possible and practical: (a) each Party shall restrict access to such data only to its employees, consultants and independent contractors who, in each case, need such access to perform activities, or exercise its rights, under this Agreement, and who, prior to such access, have executed appropriate confidentiality and invention assignment agreements with such Party; and (b) [ * ] shall be responsible for any costs related to the implementation, use and maintenance of such data-sharing arrangement by [ * ] ; provided, however , that if [ * ] does not deem the costs of using a particular data-sharing system to be reasonable, the Parties shall not be obligated to implement such system, and the Parties shall discuss alternative systems with more reasonable costs of implementation, use and maintenance. In any event, access to any such data shall in all cases be password-protected or otherwise similarly restricted.

2.13 Contribution of New Compounds and New Scaffolds. If either Party desires to contribute additional LXR Modulators, Dual LXR/FXR Modulators or scaffolds to the Collaboration, then such Party (the “Contributing Party” ) shall provide the other Party with a written description of such additional compounds or scaffolds, and the Parties shall meet to discuss such contribution. If such other Party determines in good faith that the contribution of any such compounds or scaffolds by the Contributing Party would not result in the breach of any obligation or agreement that such other Party may have with or to a Third Party, and would not result in the potential infringement of Third Party Patents (it being understood that any such determination [ * ] , then: (a) such additional compounds shall be included in the scope of the Agreement as BMS Compounds (in the case of compounds contributed by BMS); (b) such additional compounds shall be included in the scope of the Agreement as Exelixis Compounds (in the case of compounds contributed by Exelixis); or (c) such additional scaffolds shall be included in the scope of the Agreement as Scaffolds. Notwithstanding anything to the contrary, if such other Party determines in good faith that the contribution of any such compounds or scaffolds by the Contributing Party would result in the breach of any obligation or agreement that such other Party may have with or to a Third Party, or would result in the potential infringement of Third Party Patents, then such additional compounds or scaffolds shall not be included within the scope of this Agreement; [ * ] .

2.14 Review of Collaboration Compounds. As part of the criteria for the submission of a compound [ * ], Exelixis shall review the results of all [ * ] conducted by either Party in the normal course of performing research under the Research Plan or by BMS in the normal course of performing research during the BMS Independent Activity Period. In the event review by Exelixis is during the BMS Independent Activity Period, BMS shall provide Exelixis with the results of all [ * ] for such [ * ] Collaboration Compound, and sufficient samples of any [ * ] Collaboration Compound that has completed [ * ] (as such term is described in the Research Plan), or its equivalent stage of research, to have such assays conducted. Exelixis may use such results and samples for the sole purpose of performing assays to verify that such [ * ] Collaboration Compound does not display [ * ] ( “ [ * ] Activity” ). [ * ] shall be responsible for having such assays conducted as well as any costs associated with such assays. If Exelixis notifies BMS in writing within [ * ] days of receiving a sample of a submitted [ * ] Collaboration Compound that such Collaboration Compound displays [ * ] Activity, then BMS shall not [ * ] such Collaboration Compound, and BMS’ licenses [ * ] such Collaboration Compound shall terminate (solely with respect to such Collaboration Compound); provided, however , that BMS may perform research on such Collaboration Compound using its applicable licenses in Section 5.1 to derivatize away the [ * ] Activity of such Collaboration Compound. For clarity, (i) nothing in this Section 2.14 shall be deemed to preclude BMS from conducting screening activities, at any time, with respect to Collaboration Compounds in order to determine whether Collaboration Compounds display [ * ] Activity, and (ii) BMS may continue its research and development activities with respect to any such submitted [ * ] Collaboration Compound during such review period prior to receiving any such written notice from Exelixis. In the event that Exelixis does not provide written notice to BMS with respect to the [ * ] Activity of a submitted [ * ] Collaboration Compound within such [ * ] day period, then BMS shall be free to develop and commercialize such Collaboration Compound on the terms and conditions set forth in this Agreement. Notwithstanding the foregoing, Exelixis shall use commercially reasonable efforts to notify BMS as soon as practicable [ * ] in the event that Exelixis becomes aware in the course of performing its obligations under the Research Plan during the Collaborative Research Period that a Collaboration Compound displays [ * ] Activity.

3. BMS INDEPENDENT RESEARCH, DEVELOPMENT, MANUFACTURE AND COMMERCIALIZATION OF PRODUCTS

3.1 BMS Research, Development and Commercialization. As between the Parties, BMS (or its Affiliates or sublicensees) has sole authority to conduct: (a) all preclinical development (including any discovery activities) with respect to Collaboration Compounds from and after the expiration of the Collaborative Research Period and during the BMS Independent Activity Period; and (b) clinical development, pre clinical, clinical and commercial manufacturing and commercialization activities, including all regulatory activities, with respect to any Collaboration Compounds and/or Products during the BMS Independent Activity Period. All regulatory applications with respect to the Products shall be owned by BMS and/or its Affiliates or sublicensee(s), as applicable. Upon [ * ] (and at [ * ] ), (i) Exelixis shall [ * ] provide BMS with any Exelixis Know-How that is [ * ] for BMS to conduct the activities set forth in clauses (a) and (b) above, and (ii) Exelixis shall cooperate with BMS in connection with regulatory submissions related to any Product. BMS shall have sole control and responsibility for, and shall bear all of its costs and expenses associated with, the development, manufacture (including formulation) and commercialization of all Products, as applicable.

3.2 Diligence. BMS shall use Diligent Efforts to [ * ] during the term of this Agreement; provided that BMS may satisfy such obligation by [ * ] pursuant to the terms of this Agreement. Exelixis may notify BMS in writing if Exelixis in good faith believes that BMS is not meeting its diligence obligations set forth in this Section 3.2, and the Parties shall meet and discuss the matter in good faith. Exelixis may further request review of BMS’ records generated and maintained as required under Section 3.3 below, to the extent those records relate to development and commercialization of a Product.

3.3 Records. BMS shall maintain complete and accurate records of all research, development, manufacturing and commercialization conducted by it or on its behalf related to each Product, and all Information generated by it or on its behalf in connection with development under this Agreement with respect to each such Product. BMS shall maintain such records at least until the later of: (a) [ * ] after such records are created, or (b) [ * ] after the Launch of the Product to which such records pertain; provided that the following records may be maintained for a longer period, in accordance with each Party’s internal policies on record retention: (i) [ * ] and (ii) [ * ] records that Exelixis reasonably requests be retained in order to ensure the preservation, prosecution, maintenance or enforcement of [ * ] . Such records shall be at a level of detail appropriate for [ * ] purposes. Exelixis shall have the right to review and copy such records of BMS at reasonable times to the extent necessary or useful for Exelixis to conduct its obligations or enforce its rights under this Agreement.

3.4 Reports. Beginning [ * ] after the end of the Collaborative Research Period, and [ * ] thereafter during the [ * ] , BMS shall submit to Exelixis a written progress report summarizing the research, development and commercialization performed by BMS on Products, including [ * ] since the last report, the [ * ] that reaches [ * ] (as defined in the Research Plan) and each Collaboration Compound that reaches [ * ] . If reasonably necessary or useful for

Exelixis to exercise its rights under this Agreement, Exelixis may request that BMS provide more detailed information and data regarding such results reported by BMS, and BMS shall promptly provide Exelixis with information and data as is reasonably related to such request, at Exelixis’ expense. All such reports shall be considered Confidential Information of BMS.

3.5 Technology Transfer. Subject to any applicable agreement with a Third Party and the terms of this Agreement, Exelixis shall transfer technology to BMS as described in this Section 3.5.

(a) BMS Transition of an ECN to Development Activities. Subject to Section 3.5(c) and within [ * ] of receiving a written request from BMS to transfer one or more particular items of Information relating to the manufacture of a Collaboration Compound that has received ECN approval, Exelixis shall use commercially reasonable efforts to transfer to BMS such items that are in Exelixis’ possession, including any [ * ] generated by Exelixis under the Research Plan. Further, upon written request from BMS and to the extent that [ * ] , Exelixis shall provide reasonable assistance to BMS with respect to the transfer and implementation of technology required for BMS to manufacture or have manufactured such Collaboration Compound. If BMS requests that Exelixis provide on-site advice or support in connection with the foregoing, BMS shall reimburse Exelixis for reasonable travel costs incurred.

(b) BMS Independent Activity Period. Subject to Section 3.5(c), BMS may request in writing that Exelixis transfer one or more particular items of Information that are in Exelixis’ possession and that were used by Exelixis in the performance of its responsibilities under the Research Plan. After receiving such request, Exelixis shall use commercially reasonable efforts to transfer to BMS such items, including any [ * ] generated by Exelixis under the Research Plan. If BMS requests that Exelixis provide on-site advice or support in connection with the foregoing, BMS shall reimburse Exelixis for reasonable travel costs incurred. For a period of [ * ] after the end of the Collaborative Research Period, Exelixis shall not [ * ] that may be transferred to BMS pursuant to this Section 3.5(b). After such [ * ] period, Exelixis shall not have any obligation to [ * ] , provided that Exelixis shall notify BMS of the [ * ] in order to allow BMS the opportunity to [ * ] , subject to [ * ] .

(c) Restrictions on Transfer. Transfer of items as described in Sections 3.5(a) and 3.5(b) shall be subject to the following conditions: (i) Exelixis shall transfer such items to BMS to the extent that items requested by BMS are [ * ] and Exelixis’ ability to grant BMS a sublicense to the intellectual property rights covering such items is not [ * ] ; (ii) Exelixis shall not be obligated to transfer such items to BMS to the extent that Exelixis’ ability to grant BMS a sublicense to the intellectual property rights covering such items is [ * ] ; and (iii) in the event that Exelixis may sublicense to BMS the intellectual property rights covering such requested items, BMS must [ * ] ; provided that Exelixis [ * ] , and BMS [ * ] that BMS desired to [ * ] . If BMS does not take such sublicense subject to all such [ * ] , then such sublicense of intellectual property rights shall automatically be null and void, and Exelixis shall not be obligated to transfer the items covered by such sublicense.

(d) Discussion Regarding Further Collaboration. With respect to items that cannot be transferred due to Section 3.5(c)(ii), the Parties shall meet and discuss in good faith opportunities for collaboration that the Parties could undertake to achieve similar outcomes

as if such items were transferred. For example, the Parties could [ * ] with respect to such items that cannot be transferred. Any such [ * ] must be consistent with [ * ] . Notwithstanding anything to the contrary, nothing in this Section 3.5(d) shall obligate either Party to [ * ] .

4. MANUFACTURING BY EXELIXIS

4.1 Pre-ECN Collaboration Compounds During the Collaborative Research Period. During the Collaborative Research Period and prior to approval of a Collaboration Compound as an ECN, the JRC shall determine responsibility(ies) among the Parties with respect to the manufacture of such Collaboration Compound in sufficient quantities for the Parties to conduct the Research Plan.

4.2 Post-ECN Collaboration Compounds and Collaboration Compounds During the BMS Independent Activity Period. Notwithstanding BMS’ authority to manufacture Collaboration Compounds as set forth in Section 3.1 above, BMS may request in writing that BMS’ requirements for: (a) any Collaboration Compounds that receive approval as an ECN; or (b) any Collaboration Compounds being researched or developed by BMS during the BMS Independent Activity Period, be manufactured by Exelixis, or on behalf of Exelixis by a mutually agreed subcontractor, and BMS shall provide Exelixis with the relevant information for Exelixis to make a reasonable determination of manufacturing costs for each such Collaboration Compound. Within [ * ] of receiving BMS’ request, Exelixis shall notify BMS in writing of whether Exelixis desires to manufacture such Collaboration Compound, and, with respect to any approved subcontractor, shall provide BMS with information relating to such subcontractor’s operations, including information on any regulatory inspections, quality related observations, reliability, security of supply and other relevant commercial considerations. If Exelixis does not desire to manufacture (or subcontract the manufacture of) such Collaboration Compound, then Exelixis shall have no obligation to manufacture (or subcontract the manufacture) of such Collaboration Compound. If Exelixis desires to manufacture (or subcontract the manufacture of) such Collaboration Compound, then: (i) BMS and Exelixis shall promptly meet, over a [ * ] period, to negotiate in good faith the commercially reasonable terms of a manufacturing agreement and a quality agreement for such Collaboration Compound; and (ii) in the event that manufacturing of such Collaboration Compound had been undertaken by BMS prior to ECN approval, then BMS shall provide reasonable assistance to Exelixis with respect to the transfer and implementation of technology required for Exelixis to manufacture or have manufactured such Collaboration Compound. BMS’ right to request the manufacture of Collaboration Compounds that receive approval as an ECN shall expire at the earlier of: (1) the [ * ] of the end of the Collaborative Research Period; or (2) the [ * ] .

5. LICENSES AND RELATED RIGHTS

5.1 Licenses to BMS. Subject to the terms of this Agreement:

(a) Collaboration Research . Exelixis hereby grants BMS a co-exclusive, worldwide, royalty-free license (with the right to sublicense to its Affiliates, but without the right to sublicense to Third Parties except with prior written consent of Exelixis), under any Exelixis Know-How and Exelixis Patents solely to perform the research tasks assigned to BMS pursuant to the Research Plan.

(b) BMS Independent Research . During the BMS Independent Activity Period, Exelixis hereby grants BMS an exclusive, worldwide, royalty-free license (without the right to sublicense except to third party contract research providers and manufacturers) to research, identify, derivatize, pre-clinically develop, make, have made and use: (i) Collaboration Compounds solely for research purposes; and (ii) Non-LXR Modulators solely for the purposes of identifying, developing, making, having made and using Collaboration Compounds, under: (A) any Exelixis Know-How and Exelixis Patents covering one (1) or more Collaboration Compounds or Non-LXR Modulators, and/or any composition containing any of the foregoing, or the manufacture or use thereof; and (B) subject to Section 3.5, any other Exelixis Know-How and/or Exelixis Patents, which is useful or reasonably necessary for the research, identification, derivatization, pre-clinical development, making, having made and use of Collaboration Compounds. Notwithstanding anything to the contrary in this Agreement, the licenses granted in this Section 5.1(b) shall not create (by any means, whether expressly, impliedly or by estoppel) any right or license under any other Patents, Information or other intellectual property right that is Controlled by Exelixis.

(c) Development and Commercialization . Exelixis hereby grants BMS an exclusive, worldwide, royalty-bearing (solely to the extent provided in Section 7.4) license (with the right to sublicense) to clinically develop, make, have made, use, import, sell, offer to sell and have sold Products incorporating any Collaboration Compound, under: (i) any Exelixis Know-How and Exelixis Patents covering one (1) or more Collaboration Compounds, and/or any composition containing any of the foregoing, or the manufacture or use thereof; and (ii) subject to Section 3.5, any other Exelixis Know-How and/or Exelixis Patent, which is useful or reasonably necessary to clinically develop, make, have made, use, import, sell, offer to sell and have sold Products incorporating any Collaboration Compound.

5.2 BMS License Limitations, Covenants and Retained Rights.

(a) BMS hereby covenants that:

(i) BMS shall not (and shall ensure that any of its permitted sublicensees shall not) use any Exelixis Know-How or Exelixis Patents for a purpose other than that expressly permitted in Section 5.1 and 10.4(e).

(ii) During the [ * ] , BMS shall not (and shall ensure that any of its permitted sublicensees shall not) [ * ] .

(iii) During the [ * ] , BMS shall not [ * ] . For clarity, BMS retains the right to use BMS Compounds for any and all research purposes.

(b) Each sublicense granted by BMS, pursuant to Section 5.1, to a party who is an Affiliate at the time such license is granted shall terminate immediately upon such party ceasing to be an Affiliate.

(c) BMS retains all rights to use all BMS Know-How and BMS Patents except those expressly granted to Exelixis on an exclusive basis under the terms of this Agreement.

(d) BMS acknowledges and agrees that, the licenses granted in Section 5.1(c) shall not create (by any means, whether expressly, impliedly or by estoppel) any right or license under any other Patents, Information or other intellectual property right that is Controlled by Exelixis and that covers any compounds (other than Collaboration Compounds), and/or any composition containing any of the foregoing, or the manufacture or use thereof.

5.3 License to Exelixis for Collaboration Research. Subject to the terms of this Agreement, BMS hereby grants Exelixis a co-exclusive, worldwide, royalty-free license (with the right to sublicense to Affiliates, but without the right to sublicense to Third Parties except with prior written consent of BMS) under the BMS Know-How and BMS Patents, solely to perform the research tasks assigned to Exelixis pursuant to the Research Plan.

5.4 Exelixis License Limitations, Covenants and Retained Rights.

(a) Exelixis hereby covenants that:

(i) Exelixis shall not (and shall ensure that any of its permitted sublicensees shall not) use any BMS Know-How or BMS Patents for a purpose other than that expressly permitted in Sections 5.3 and 10.4(d).

(ii) During the [ * ] , Exelixis shall not (and shall ensure that any of its permitted sublicensees shall not) [ * ] ; provided, however , that the foregoing restriction shall not apply to [ * ] .

(iii) During the [ * ] , Exelixis shall not [ * ] . For clarity, Exelixis retains the right to use Exelixis Compounds for any and all research purposes; provided, however , that in the event that an Exelixis Compound reaches [ * ] , then Exelixis shall not [ * ] . Furthermore, if BMS notifies Exelixis pursuant to BMS’ reporting obligations described in Sections 2.11 and 3.4 (as applicable) that an Exelixis Compound has reached [ * ] , then Exelixis shall not [ * ] .

(b) Each sublicense granted by Exelixis, pursuant to Section 5.3, to a party who is an Affiliate at the time such license is granted shall terminate immediately upon such party ceasing to be an Affiliate.

(c) Exelixis retains all rights to use all Exelixis Know-How and Exelixis Patents except those expressly granted to BMS on an exclusive basis under the terms of this Agreement.

5.5 No Additional Licenses. Except as expressly provided in Sections 5.1, 5.3, and 10.4, nothing shall grant either Party any right, title or interest in and to the intellectual property rights of the other Party (either expressly or by implication or estoppel).

5.6 Sublicensing. Each Party shall provide the other Party with the name of each permitted sublicensee of its rights under this Article 5 and a copy of the applicable sublicense agreement; provided that each Party may redact confidential or proprietary terms from such copy, including financial terms. The sublicensing Party shall remain responsible for each permitted sublicensee’s compliance with the applicable terms and conditions of this Agreement.

6. EXCLUSIVITY

6.1 Collaborative Research Period. During the Collaborative Research Period, neither Party shall do any of the following with respect to a Competitive Compound: [ * ] . Notwithstanding anything to the contrary: (i) [ * ] ; and (ii) [ * ] .

6.2 BMS Independent Activity Period. During the BMS Independent Activity Period, Exelixis shall not do any of the following with respect to a Competitive Compound: [ *

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