COLLABORATION AGREEMENT

Collaboration Agreement

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EXELIXIS INC

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Title: COLLABORATION AGREEMENT
Governing Law: California Date: 8/9/2005
Law Firm: Cooley Godward LLP Sector: Healthcare

COLLABORATION AGREEMENT, Parties: exelixis inc

Exhibit 10.2

[ * ] = 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.

COLLABORATION AGREEMENT

T HIS C OLLABORATION A GREEMENT (this “ Agreement ”) is made and entered into as of May 31, 2005 (the “ Effective 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 G ENENTECH , I NC ., a Delaware corporation having its principal place of business at 1 DNA Way, South San Francisco, California 94080 (“ Genentech ”). Exelixis and Genentech are sometimes referred to herein individually as a “ Party ” and collectively as the “ Parties .”

R ECITALS

A. Genentech is a health care company that has expertise and capability in developing and marketing human biopharmaceuticals and has research and development programs.

B. Exelixis is a drug discovery company that has expertise and proprietary technology relating to the Notch signaling pathway.

C. Genentech and Exelixis desire to establish a collaboration to apply each Party’s technology and expertise as part of a program for the generation, screening and validation of therapeutics directed against certain targets in the Notch signaling pathway, and to provide for the development and commercialization of such therapeutics.

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

1. D EFINITIONS

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

1.1 “ Adam-10 ” means the gene Adam-10 (for any species) and the protein (or fragment or epitope thereof) encoded by such gene, including the protein encoded by the nucleic acid sequence set forth in REFSEQ accession No. NM 001110 and NP 001101, and naturally occurring variants and fragments thereof.

1.2 “ Affiliate ” means any person, corporation, partnership or other entity that directly or indirectly controls or is controlled by or is under common control with a Party. For purposes of this definition, “control” or “controlled” means ownership directly or through one or more Affiliates, of fifty percent (50%) or more of the shares of stock entitled to vote for the election of directors, in the case of a corporation, or fifty percent (50%) or more of the equity interest in the case of any other type of legal entity, status as a general partner in any partnership, or any other

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arrangement whereby a Party controls or has the right to control the Board of Directors or equivalent governing body of a corporation or other entity, or the ability to cause the direction of the management or policies of a corporation or other entity. Notwithstanding the foregoing, for Genentech, “Affiliate” excludes any parent entity that controls Genentech, including F. Hoffman La Roche, Ltd. and its successors (“ Roche ”), and entities that control, are under common control (as defined in this Section) with, such parent entity, and entities that are controlled by such parent entity, other than entities controlled through Genentech.

1.3 “ BLA ” means a Biologics License Application filed pursuant to the requirements of the FDA, or the equivalent application or filing in another country (as applicable). “ sBLA ” means a supplemental BLA.

1.4 “ Class I Claim ” means a Valid Claim of [ * ] which Valid Claim either: (a) [ * ] or (b) [ * ] .

1.5 “ Class II Claim ” means a Valid Claim (other than a Class I Claim) of [ * ] which Valid Claim claims [ * ] .

1.6 “ Collaboration Assay ” means any assay that is created during or improved during the Research Term pursuant to the Research Plan by or on behalf of either Party, and that [ * ] or [ * ] .

1.7 “ Collaboration Invention ” means any Information, machine, manufacture, process, design, formulation, or composition of matter, or any new and useful improvement thereof, which is made pursuant to the Research Plan, whether jointly by or on behalf of the Parties or solely by or on behalf of one Party. Collaboration Inventions include but are not limited to Collaboration Assays and Collaboration Reagents.

1.8 “ Collaboration IP ” means: (a) any and all Collaboration Patents; and (b) proprietary and confidential Information (including intellectual property and proprietary rights other than Patents in and to such Information), or other intellectual property rights (excluding Patents that Cover a Collaboration Invention), but for both (a) and (b), only to the extent such rights were created pursuant to the Research Plan.

1.9 “ Collaboration Patent ” means any Patent that: (a) [ * ] ; and (b) [ * ] .

1.10 “ Collaboration Reagent ” means any [ * ] reagents that are created or made by or on behalf of a Party (or the Parties jointly) during the Research Term pursuant to the Research Plan, excluding: (a) Collaboration Assays; (b) any Licensed Products; and (c) [ * ] .

1.11 “ Collaboration Target ” means: (a) [ * ] ; and (b) any other target added to Exhibit A pursuant to Section 2.4.

1.12 “ Collaboration Target Activity ” of any product is the same as that of a Licensed Product if the other product [ * ] and [ * ] (e.g., if the Licensed Product is [ * ] , then the other product also is [ * ] , if the Licensed Product is [ * ] , then the other product also is [ * ] , and if the Licensed Product is [ * ] , then the other product also is [ * ] ).

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[ * ] = 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.

1.13 “ Commercializing Party ” means that Party commercializing a particular product under this Agreement: (a) Exelixis with respect to an Exelixis Reagent Product or Exelixis Screening Product, and (b) Genentech with respect to a Licensed Product or a Genentech Screening Product.

1.14 “ Competing Product ” means, with respect to a Licensed Product in a country, any product that is [ * ] and that: (a) [ * ] ; and (b) [ * ] . If a Licensed Product is [ * ] , then a Competing Product could be [ * ] .

1.15 “ Confidential Information ” has the meaning set forth in Section 9.1.

1.16 “ Control ” means ownership or other legal authority or right of a Party or any of its Affiliates, to grant a license or sublicense of intellectual property rights to another Party or its Affiliates, without the grant or such license or sublicense alone constituting a breach of an agreement between that Party (or its Affiliates) and a Third Party.

1.17 “ Cost Sharing Ratio ” means, for each Licensed Product designated by Exelixis as a Profit Share Product under Section 4.2 [ * ] for each such Profit Share Product.

1.18 “ Covered ” or “ Covers ” means:

(a) with respect to a Patent (and a given product will be deemed “Covered” by that Patent), if the [ * ] would, in the country of sale and at the time of sale, infringe a Valid Claim in that country; and

(b) with respect to proprietary and confidential Information, know-how (either Genentech Know-How or Exelixis Know-How) or any other intellectual property rights other than Patents (and a given product will be deemed “Covered” by such proprietary and confidential Information, know-how or other non-Patent intellectual property rights), if the [ * ] , or if the [ * ] .

1.19 “ Development Costs ” has the meaning set forth in the Financial Appendix.

1.20 “ Diagnostic ” means a product intended and designed for use solely or primarily for the purpose of testing recipients or potential recipients: (a) [ * ] ; (b) [ * ] ; or (c) [ * ] .

1.21 “ Diligent Efforts ” means, as applied to a Party or Parties, those efforts and diligence (including the deployment of resources) that [ * ] . Where “Diligent Efforts” is to be applied to development of a Licensed Product, [ * ] is considered not to be using Diligent Efforts.

1.22 [ * ] .

1.23 “ Exelixis Know-How ” means all proprietary and confidential Information (including intellectual property and proprietary rights other than Patents in and to such Information) Controlled by Exelixis or its Affiliates, [ * ] and [ * ] . Exelixis Know-How excludes: (a) Information (and intellectual property and proprietary rights other than Patents in and to such Information) regarding [ * ] ; (b) Collaboration IP; and (c) Yale Know-How.

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1.24 “ Exelixis Reagent Product ” means any product discovered, identified, developed or commercialized by or on behalf of Exelixis: (a) [ * ] ; or (b) [ * ] ; or (c) [ * ] . For clarity, a product will not be [ * ] if those Collaboration Assays or Collaboration Reagents are [ * ] . “Exelixis Reagent Product” excludes any Licensed Product.

1.25 “ Exelixis Research IP ” means the Exelixis Know-How and the Exelixis Research Patents.

1.26 “ Exelixis Research Patents ” means any and all Patents that are Controlled by Exelixis or its Affiliates, [ * ] , and that [ * ] . Exelixis Research Patents excludes: (a) Patents Covering [ * ] ; (b) Yale Patents; and (c) Collaboration Patents.

1.27 “ Exelixis Screening Product ” means any [ * ] product, other than an Exelixis Reagent Product, that [ * ] and that [ * ] , where the [ * ] are, at the time of such [ * ] , Covered by [ * ] .

1.28 “ FDA ” means the U.S. Food and Drug Administration, or any successor entity thereto.

1.29 “ Field ” means the diagnosis, treatment or prevention of human diseases and conditions.

1.30 “ Financial Appendix ” means Exhibit E to this Agreement, which sets forth certain financial terms and conditions.

1.31 “ First Commercial Sale ” means, for any product, and on a country-by-country basis in each country in which that product is sold, the first arm’s-length sale to a Third Party for use or consumption by an end-user (e.g., a physician) of that product in that country, after obtaining Regulatory Approval of that product in that country. A First Commercial Sale shall not include a sale of any product for use in clinical trials, for research or for other non-commercial uses, or supply of a product as part of a compassionate use or similar program. For purposes of this Agreement, “ Regulatory Approval ” means all necessary 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 Medicines Evaluation Agency), regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity, have been obtained for the manufacture, distribution, use or sale of that product in a regulatory jurisdiction.

1.32 “ Follow-On Exelixis Inventions ” means any [ * ] which is made [ * ] .

1.33 “ Follow-On Exelixis IP ” means: (a) any and all Patents that Cover the Follow-On Exelixis Inventions and that [ * ] ; and (b) any other intellectual property rights (including know-how, rights in and to Information, but excluding Patents) that Cover a Follow-On Exelixis Invention and that [ * ] .

1.34 “ 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). [ * ] .

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

1.36 “ Genentech Excluded IP ” means: (a) all rights in and to any of the following, each of which is defined on Exhibit C : (i) [ * ] ; (ii) [ * ] ; (iii) [ * ] ; (iv) [ * ] ; (v) [ * ] ; or (b) Patents Covering [ * ] .

1.37 “ Genentech Know-How ” means all proprietary and confidential Information (including intellectual property and proprietary rights other than Patents in and to such Information) Controlled by Genentech or its Affiliates, [ * ] , and [ * ] . Genentech Know-How excludes: (a) Information (and intellectual property and proprietary rights other than Patents in and to such Information) regarding [ * ] ; and (b) Collaboration IP.

1.38 “ Genentech Licensed IP ” means the Genentech Know-How and the Genentech Licensed Patents.

1.39 “ Genentech Licensed Patents ” means any and all Patents Controlled by Genentech or its Affiliates, [ * ] , that [ * ] . Genentech Licensed Patents excludes: (a) the Genentech Excluded IP; and (b) Collaboration Patents.

1.40 “ Genentech Screening Product ” means any [ * ] product that [ * ] and that: (a) [ * ] , where the [ * ] are, at the time of such [ * ] , Covered by [ * ] ; and (b) [ * ] .

1.41 “ IND ” means an Investigational New Drug Application filed with the FDA or the equivalent application in any country outside the U.S. where a regulatory filing is required or obtained to conduct a clinical trial.

1.42 “ Inflammatory Disease ” means: (a) [ * ] ; and (b) [ * ] ; and (c) [ * ] . Inflammatory Disease excludes [ * ] .

1.43 “ Information ” means information (including results and data) or material of any type, in any tangible or intangible form, including without limitation, inventions, databases, methods, techniques, assays, processes, specifications, formulations, formulae, cell lines, cell media, skills, experience, manufacturing materials, financial data, test data including pharmacological, biological, models, designs, chemical, biochemical, toxicological and clinical test data, analytical and quality control data, quality assurance data, stability data, studies and procedures, and legal information or descriptions.

1.44 “ Interest Rate ” means a rate equal to [ * ] on the last business day of the applicable quarter prior to the date on which such payment is due, calculated daily on the basis of a 365-day year, or, if lower, the highest rate permitted under applicable law

1.45 [ * ] .

1.46 [ * ] .

1.47 “ Joint Collaboration IP ” means a Joint Collaboration Patent or other Collaboration IP owned jointly by the Parties pursuant to Section 8.2.

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1.48 “ Joint Collaboration Patent ” means a Collaboration Patent owned jointly by the Parties pursuant to Section 8.2.

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

1.50 “ Licensed Product ” means any [ * ] product: (a) [ * ] ; (b) [ * ] ; or (c) [ * ] , but in any case excluding (x) Adam-10 and (y) [ * ] . Each Licensed Product that is [ * ] will be considered [ * ] .

1.51 “ Marketing Approval Application ” or “ MAA ” means an NDA, an sNDA, a BLA or an sBLA.

1.52 “ NDA ” means a New Drug Application filed pursuant to the requirements of the FDA, or the equivalent application or filing in country other than the United States (as applicable). “ sNDA ” means a supplemental NDA.

1.53 “ Net Sales ” means, with respect to a particular time period, the gross amount invoiced by a Commercializing Party and its Sublicensees (or by a distributor on behalf of either of such Commercializing Party or its Sublicensees) for sales of a product exploited pursuant to the licenses under this Agreement and subject to a potential royalty on Net Sales, including a Royalty Product, a Genentech Screening Product, an Exelixis Reagent Product, or an Exelixis Screening Product (each or all, a “ Commercial Product ” for purposes of this Section 1.53) (such Commercial Product being in final form intended for use by the end user) in arms length transactions between the Commercializing Party and a Third Party during such time period, less [ * ] , to the extent each is actually incurred and included in the invoiced gross sales price: (a) trade, cash and quantity discounts or rebates actually allowed or taken; (b) credits or allowances given or made for rejection or return of, and for uncollectible amounts on, previously sold products or for retroactive price reductions (including rebates similar to Medicare and/or Medicaid); (c) sales tax, VAT taxes, and other taxes, duties or other governmental charges levied on or measured by the billing amount, as adjusted for rebates or refunds, that are borne by the seller thereof and that are not refundable and to the extent noncreditable; (d) charges for freight and insurance directly related to the distribution of Commercial Products (to the extent not paid by the Third Party customer); and (e) credits or allowances given or made for wastage replacement, indigent patient and similar programs. The specific deductions taken under, and the general provisions of, (a) through (e) above shall be adjusted periodically as necessary to reflect amounts actually incurred. Sales between a Commercializing Party and its Sublicensees (or distributors of such Commercializing Party or its Sublicensees) shall be disregarded for purposes of calculating Net Sales. Notwithstanding anything herein to the contrary, in all cases Net Sales shall be determined in accordance with GAAP. In the event a Commercial Product is sold in combination with one or more other active pharmaceutical ingredients (as used in this definition of Net Sales, a “ Combination ”), then Net Sales for that Commercial Product shall be calculated by multiplying the Net Sales of such Combination by the fraction A/B, where A is the gross selling price of the Commercial Product sold separately and B is the gross selling price of the Combination. In the event that no such separate sales are made, Net Sales for royalty determination shall be calculated by multiplying Net Sales of the Combination by the fraction

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C/(C+D), where C is the fully allocated cost of the Commercial Product and D is the fully allocated cost of the other active pharmaceutical ingredient(s) in the Combination.

Genentech and Exelixis agree that for purposes of this definition, [ * ] shall not be deemed to be “ active pharmaceutical ingredients ”, the presence of which in a product sold by a Commercializing Party hereunder would be deemed to create a Combination subject to the terms of the preceding paragraph.

If a product sold by a Commercializing Party hereunder is sold under a bundled or capitated arrangement with other products of a Party and its Sublicensees, then, solely for the purpose of calculating Net Sales, any [ * ] shall be [ * ] , than [ * ] .

1.54 [ * ] .

1.55 [ * ] .

1.56 [ * ] .

1.57 [ * ] .

1.58 “ Oncology ” means [ * ] .

1.59 “ Operating Profits (Losses) ” has the meaning set forth in the Financial Appendix.

1.60 “ Other Target ” means a target within the Notch signaling pathway that is not a Collaboration Target and is listed on Exhibit D .

1.61 “ Patents ” means all: (a) U.S. issued patents, re-examinations, reissues, renewals, extensions and term restorations, inventors’ certificates and foreign counterparts thereof; (b) pending applications for U.S. patents, including provisional applications, continuations, continuations-in-part, continued prosecution, divisional and substitute applications; and (c) non-U.S. counterparts or equivalents of the foregoing in subsection (a) and (b).

1.62 “ Phase I Clinical Trial ” means a human clinical trial with a principal purpose of preliminarily determining the safety of a pharmaceutical product in healthy individuals or patients as required in 21 C.F.R. §312.21(a), or similar clinical study in a country other than the United States, and for which there are no primary endpoints related to efficacy.

1.63 “ Phase II Clinical Trial ” means a human clinical trial with a principal purpose of determining efficacy and dosing of a pharmaceutical products in patients with the disease being studied as described in 21 C.F.R. §312.21(b), or similar clinical study in a country other than the United States.

1.64 “ Phase III Clinical Trial ” means a human clinical trial with a principal purpose of establishing safety and efficacy of a pharmaceutical product in patients with the disease being studied as required in 21 C.F.R. §312.21(c) or similar clinical study in a country other than the United States. A Phase III Clinical Trial shall also include any other human clinical trial

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intended as a pivotal trial for Regulatory Approval purposes, or that results in data actually used to support the filing of a Marketing Approval Application, whether or not such trial is a traditional Phase III Clinical Trial.

1.65 “ Profit Share Field ” means either the field of Inflammatory Disease or the field of TGR, as selected by Exelixis pursuant to Section 4.1.

1.66 “ Profit Share Product ” means any Licensed Product designated as a Profit Share Product under Section 4.2.

1.67 “ Research Funding ” means the payments made by Genentech to Exelixis for purposes of funding research under the Research Plan, as described in Section 7.2.

1.68 “ Research Plan ” has the meaning set forth in Section 2.1.

1.69 “ Research Term ” means the period beginning on the Effective Date and ending on its third (3 ^rd ) anniversary, as may be extended under Section 2.5.

1.70 “ Royalty Product ” means a Licensed Product that is not then subject to a designation as a Profit Share Product. For clarity, although sales of a Genentech Screening Product may be subject to royalty obligations, it is not a Royalty Product.

1.71 “ Royalty Term ” means:

(a) in the case of payments under Section 7.4(a) (i.e., for each Royalty Product Covered by a Class I Claim), on a country-by-country and Royalty Product by Royalty Product basis, the period beginning with [ * ] and ending on the earlier of the date on which (i) [ * ] , or (ii) [ * ] ;

(b) in the case of payments under Section 7.4(b) (i.e., for each Royalty Product Covered by a Class II Claim), on a country-by-country basis, the period beginning with [ * ] and ending on the earlier of the date on which (i) [ * ] , or (ii) [ * ] ;

(c) in the case of payments under Section 7.4(c) (i.e., for each Royalty Product Covered by [ * ] , on a country-by-country basis, the period beginning with [ * ] and ending on [ * ] ; and

(d) in the case of payments under Section 7.5 by Genentech for each Genentech Screening Product on a country-by-country basis, or payments under Section 7.6 or Section 7.7 by Exelixis for each Exelixis Screening Product or Exelixis Reagent Product on a country-by-country basis, the period beginning with [ * ] and ending [ * ] .

1.72 “ Small Molecule Compound ” means any molecule that has a molecular weight [ * ] .

1.73 “ Sole Collaboration IP ” means Collaboration IP invented solely by one Party: “ Genentech’s Sole Collaboration IP ” refers to Collaboration IP owned solely by Genentech and “ Exelixis’ Sole Collaboration IP ” refers to Collaboration IP owned solely by Exelixis.

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1.74 “ Sole Collaboration Patents ” means Patents within a Party’s Sole Collaboration IP.

1.75 “ Sublicensee ” means any Third Party or Affiliate to whom Genentech or Exelixis grants a sublicense (or license, as applicable) under any portion of the rights licensed to the respective Party under this Agreement, but excluding any Third Party authorized only to make a product (and not use or sell that product), only to use a product, or only to sell a product.

1.76 “ Third Party ” means any entity other than a Party or a Party’s Affiliate that is its wholly-owned subsidiary.

1.77 “ Tissue Growth and Repair ” or “ TGR ” means [ * ] of disease by means of: (a) [ * ] ; (b) [ * ] ; or (c) [ * ] . Tissue Growth and Repair excludes [ * ] , and excludes [ * ] .

1.78 “ Valid Claim ” means any claim in [ * ] that has not expired, lapsed, been withdrawn, been canceled, been declared invalid or unenforceable in a decision from which no appeal can be taken, or been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise.

1.79 “ Yale Agreement ” means the License Agreement, dated August 27, 1996, among Exelixis, Yale University and Indiana University Foundation, as amended.

1.80 “Yale Know-How” means all proprietary and confidential Information (including any proprietary rights therein or thereto, but excluding any Patents) or know-how that is licensed to Exelixis under the Yale Agreement.

1.81 “Yale Licensed IP” means the Yale Patents and the Yale Know-How.

1.82 “ Yale Patents ” means any and all Patents licensed to Exelixis under the Yale Agreement, including but not limited to those listed on Exhibit G .

2. R ESEARCH P ROGRAM

2.1 General . The Parties have agreed on a detailed plan and budget for the research to be carried out by the Parties during the Research Term, which research plan is attached as Exhibit F and incorporated herein by reference, as may be amended pursuant to Article 2 in accordance with this Agreement (the “ Research Plan ”).

2.2 Joint Research Committee .

(a) Membership . Promptly after the Effective Date, the Parties shall establish a JRC to manage, plan and coordinate the research activities of the Parties under the Research Plan. The JRC shall be composed of an equal number of representatives from each Party, but in no event to exceed four (4) representatives from each Party. Each Party may replace its appointed JRC representatives at any time upon reasonable written notice to the other Party. For the first year of the Research Term, Genentech shall designate one (1) of its representatives as chairperson of the JRC. Thereafter, the Parties shall alternately designate a chairperson of the JRC for each subsequent year of the Research Term.

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(b) Responsibilities . During the Research Term, the JRC shall: (i) implement the research objectives for the Research Plan in accordance with this Agreement; (ii) evaluate the data generated by the Parties in the course of conducting the Research Plan; (iii) allocate Exelixis or Third Party resources for the work under the Research Plan in accordance with this Agreement and the Research Plan; (iv) review and amend the Research Plan (subject to Sections 2.4(b) and 2.4(c)); (v) review annual progress against the goals of the Research Plan; and (vi) determine standards (based on scientifically reasonable principles) for evaluating the molecules generated by the Parties under the Research Plan. The JRC shall not have the right to amend this Agreement.

(c) Decision Making . The JRC shall make decisions unanimously, and each Party’s representatives shall collectively have one (1) vote. In the event of a deadlock regarding a decision within the JRC’s authority, decisions will be escalated to [ * ] and [ * ] , or their designees when appropriate. For decisions within the JRC’s authority that are [ * ] , [ * ] may make the final determinations in the event of a deadlock in the JRC. Consistent with Section 2.4(c) below, however, neither Party has a deciding vote with respect to adding new Collaboration Targets or Other Targets.

2.3 JRC Meetings . JRC meetings shall be held quarterly on an alternating basis in each Party’s facilities. With the consent of the representatives of each Party serving on the JRC, other representatives of each Party may attend meetings as nonvoting observers (provided such nonvoting observers have confidentiality obligations to such Party that are at least as stringent as those set forth in this Agreement). A JRC meeting may be held by audio, video or internet teleconference with the consent of each Party, but at least half (1/2) of the minimum number of meetings in each year shall be held in person. Meetings of the JRC 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 JRC meetings.

2.4 Research Plan Review; Other Targets and Adding Collaboration Targets .

(a) Research Plan Review. At least on an annual basis, the JRC shall review the Research Plan in light of the Parties’ actual progress.

(b) Work on Other Targets . During the Research Term, either Party may propose that the Research Plan be expanded to include the performance of work on one or more Other Targets. The JRC shall review each such proposal in good faith and determine if such work on such Other Target(s) should be added. If the JRC unanimously determines that such work should be added, the Research Plan will be revised accordingly. Notwithstanding anything to the contrary, determinations under this Section 2.4(b) are not subject to a deciding vote under Section 2.2 or to dispute resolution under Section 13.3.

(c) Additional Collaboration Targets and Other Targets . During the Research Term, either Party may propose that the Research Plan be expanded by the inclusion of additional Collaboration Targets or Other Targets. The JRC shall review each such proposal in good faith and determine if such targets should be added as Collaboration Targets or Other Targets. If the JRC unanimously determines that such a target should be added, the JRC shall expand the scope of the Research Plan by adding such additional Collaboration Targets to

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Exhibit A or additional Other Targets to Exhibit D . Notwithstanding anything to the contrary, determinations under this Section 2.4(c) are not subject to a deciding vote under Section 2.2 or to dispute resolution under Section 13.3.

2.5 Research Term Extension . The Parties may extend the Research Term by additional [ * ] periods upon their mutual written agreement executed at least [ * ] days prior to the expiration of the then-current Research Term. At the last JRC meeting prior to the expiration of the Research Term, the JRC shall make a determination whether [ * ] . The Parties may agree in writing to attempt to complete such [ * ] ; neither Party is, however, required to so [ * ] . If the Parties do agree to [ * ] , then [ * ] shall [ * ] . In the event of an extension, Exelixis shall continue such research during the extended Research Term, subject to the standards in Section 2.1 above and Section 2.7 below. Upon completion of the extended Research Term, Exelixis shall have no obligation to complete any further research under this Agreement.

2.6 Obligations of Parties . During the Research Term, Exelixis and Genentech shall provide the JRC and its authorized representatives with reasonable access during regular business hours to all Information the JRC may reasonably require in order to perform its obligations hereunder.

2.7 Conduct of Research . The Parties shall use Diligent Efforts to conduct their respective tasks under the Research Plan in good scientific manner, and in compliance in all material respects with the requirements of all applicable laws, rules and regulations and all applicable good laboratory practices to attempt to achieve their objectives as efficiently and expeditiously as reasonably practicable. Each Party shall use Diligent Efforts to complete its assigned activities under the Research Plan. Exelixis will not be required to incur any financial costs in excess of the Research Funding.

2.8 Expenses . Except as otherwise set forth in Section 7.2, each Party shall bear its own costs and expenses associated with performing the activities assigned to it in the Research Plan.

2.9 Right to Engage Third Parties for Collaboration Efforts . Either Party may use its Affiliates or subcontractors, contract manufacturers, services providers or other Third Parties to complete its research responsibilities under the Research Plan, as it deems necessary or advisable; provided, however, that such Party shall assure, and hereby guarantees, that any intellectual property developed by such Affiliate or Third Party shall be governed by the provisions of this Agreement (and subject to the licenses set forth in Article 5) as if such intellectual property had been developed by such Party, and provided further that no Third Party may undertake to provide a majority of the work required to be undertaken by a Party to this Agreement. Any agreement with such an Affiliate or Third Party relating to the conduct of work under the Research Plan shall provide for terms that are consistent with this Agreement. Notwithstanding any delegation of obligations under this Agreement by a Party to any of its Affiliates or to a Third Party, each Party shall remain primarily liable and responsible for the performance of all of its obligations under this Agreement and for causing its Affiliates and/or Third Parties to act in a manner consistent herewith.

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2.10 Records and Reports . During the Research Term, each Party shall use commercially reasonable efforts to keep the other Party informed of its research and development activities hereunder, and shall provide the other Party’s JRC representatives with regular summary updates at JRC meetings. (Those updates are the providing Party’s Confidential Information.) Each Party also shall maintain records of progress in research and development hereunder (or cause such records to be maintained) in sufficient detail and in good scientific manner as will properly reflect all work done and results achieved by or on behalf of such Party therewith. If reasonably necessary for a Party to perform its work under the Research Plan or to exercise its rights under this Agreement, that Party may request that the other Party provide more detailed information and data regarding the updates it earlier provided, and the recording Party shall promptly provide the requesting Party with information and data as is reasonably available and reasonably related to the work under the Research Plan. Neither Party is required to generate additional data or prepare additional reports to comply with the foregoing obligation. All such reports, information and data provided by a Party shall be considered the providing Party’s Confidential Information.

2.11 Delivery of Information and Collaboration Inventions . At the completion of the Research Plan under this Agreement, at Genentech’s request from time to time during the Research Term and for [ * ] , Exelixis shall deliver to Genentech any materials, documentation and other Information created or discovered pursuant to the Research Plan, including but not limited to any Collaboration Reagents, any Collaboration Assays and/or descriptions thereof, and any other Collaboration Inventions (in tangible form if existing and otherwise in the form of a full description). Except as set forth in this Section 2.11, as set forth in Article 8, or as required by the Research Plan, neither Party is required to deliver to the other Party any materials or other tangible items.

3. D EVELOPMENT AND C OMMERCIALIZATION OF P RODUCTS

3.1 Genentech Development and Commercialization . As between the Parties, Genentech or its Affiliates or Sublicensees have sole authority to conduct all commercial research, clinical development, manufacturing and commercialization activities, including without limitation all regulatory activities, with respect to any Licensed Products in the Field (whether those Licensed Products are Profit Share Products or Royalty Products). All regulatory applications with respect to the Licensed Products will be owned by Genentech and/or its Affiliates or Sublicensee(s), as applicable. Upon Genentech’s or its Sublicensees’ or Affiliates’ reasonable written request (and at the requesting entity’s expense), Exelixis shall [ * ] . Genentech 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 Licensed Products as applicable, except to the extent that Genentech receives reimbursement from Exelixis for any Profit Share Product.

3.2 Genentech Diligence . Genentech shall use Diligent Efforts to develop and commercialize one or more Licensed Products during the term of this Agreement. [ * ] . Exelixis may [ * ] . Exelixis may [ * ] . If Genentech has not [ * ] within [ * ] , then Genentech shall [ * ] . [ * ] fully satisfies [ * ] . If Genentech [ * ] Genentech has [ * ] .

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3.3 Engaging Third Parties for Development, Manufacture and/or Commercialization . It is understood that when Genentech engages its Affiliates or any Third Parties with respect to the development, manufacture and commercialization of any Licensed Products, that engagement may require a license or sublicense of rights obtained from Exelixis under this Agreement. In addition to Genentech’s rights to sublicense under Article 5, Genentech may disclose Confidential Information of Exelixis solely as necessary to fulfill the business purposes of the engagement, and then only pursuant to terms and conditions that are substantially as protective of that Confidential Information as are the terms and conditions of this Agreement. Notwithstanding any delegation of obligations under this Agreement by Genentech to its Affiliates or a Third Party, Genentech shall remain primarily liable and responsible for the performance of all of its obligations under this Agreement and for causing such Affiliates or Third Parties to act in a manner consistent herewith.

3.4 Development, Manufacturing and Commercialization Records . Genentech shall maintain complete and accurate records of all development, manufacturing and commercialization conducted by it or on its behalf related to each Licensed Product. Genentech shall maintain such records until the later of: (a) [ * ] after such records are created, or (b) [ * ] after the First Commercial Sale of the Licensed Product to which such records pertain. Such records shall be at a level of detail appropriate for patent and regulatory purposes.

3.5 [ * ] .

4. D ESIGNATION OF P ROFIT S HARE F IELD AND P ROFIT S HARE P RODUCTS

4.1 Election of Profit Share Field. Within [ * ] after the end of the Research Term, Exelixis shall notify Genentech in writing whether it desires to elect a Profit Share Field and, if so, whether the Profit Share Field is Inflammatory Disease or TGR. Exelixis may not elect a Profit Share Field after the expiration of the foregoing time period, and once elected, the Profit Share Field may not be modified. If Exelixis does not elect a Profit Share Field, then it may not elect any Profit Share Products, and all Licensed Products will be designated Royalty Products for the remainder of the term of the Agreement.

4.2 Designation by Exelixis of Licensed Products as Profit Share Products .

(a) Generally . All Licensed Products are Royalty Products unless designated as Profit Share Products in accordance with this Section 4.2. Designation is on a Licensed Product-by-Licensed Product basis, and worldwide for any Licensed Product so designated. No Licensed Product simultaneously will be a Royalty Product and a Profit Share Product.

(b) Genentech Notices to Exelixis . If Genentech intends to develop a Licensed Product Covered by [ * ] , for an indication in the Profit Share Field (where for purposes of this Agreement Genentech’s intention to develop is conclusively determined by [ * ] ), then Genentech shall provide written notice to Exelixis within [ * ] days after the date of [ * ] . That notice must include all of the following: (i) the identity of the Licensed Product; (ii) the relevant Collaboration Target to which that Licensed Product [ * ] ; (iii) whether that Licensed Product is [ * ] ; and (iv) the indication(s) for which the Licensed Product is then being developed. After Exelixis’ receipt of the notice, Exelixis may request additional information,

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and Genentech shall make available to Exelixis, in a reasonable manner and at a convenient location: (w) [ * ] ; (x) [ * ] ; (y) [ * ] ; and (z) [ * ] . In addition to the foregoing information, during the [ * ] days after Exelixis receives that notice, Genentech shall respond promptly to Exelixis’ reasonable inquiries regarding that Licensed Product.

(c) Designation by Exelixis . Exelixis may designate a Licensed Product that was the subject of a notice in Section 4.2(b) as a Profit Share Product by providing written notice of that designation to Genentech. If Exelixis declines to designate a Licensed Product as a Profit Share Product within [ * ] days after receipt of Genentech’s notice, then that Licensed Product, [ * ] are not subject to further election or designation as Profit Share Products, and will be Royalty Products for the remainder of the term of this Agreement.

(d) Notification Limits . Genentech has no obligation to provide notice to Exelixis or permit Exelixis to make a designation for a Licensed Product that was [ * ] and that was subsequently [ * ] . In addition, Genentech’s obligation to provide notice under Section 4.2(b) and Exelixis’ right to designate a Licensed Product as a Profit Share Product under Section 4.2(c) extends [ * ] .

(e) Future Profit Share Products . Where a Licensed Product has been designated as a Profit Share Product, all future Licensed Products that have the same Collaboration Target Activity also are Profit Share Products.

4.3 Terms for Profit Share Products . The financial terms for Profit Share Products, including the relevant Cost Sharing Ratio and Operating Profits (Losses), are set forth in Section 7.11 and in the Financial Appendix.

4.4 Exelixis One-Time Right to Designate Profit Share Product as Royalty Product . At any time prior to [ * ] , Exelixis may (re-)designate that Profit Share Product as a Royalty Product, by providing written notice to Genentech of that designation. That designation will become effective within the longer of [ * ] . The foregoing right is one-time only for any Licensed Product; in other words, once (re-)designated under this Section 4.4, the Licensed Product [ * ] remains a Royalty Product for the remainder of the term of this Agreement. Exelixis and Genentech shall continue to share Operating Profits (Losses) in accordance with the Cost Sharing Ratio and the Financial Appendix until the date on which the new designation is effective (as described above in this Section 4.4); thereafter, the Licensed Product is a Royalty Product [ * ] subject to Genentech’s milestone obligations in Section 7.3 (only with respect to milestones not already achieved at the time of designation as a Royalty Product under this Section 4.4) and subject to Genentech’s royalty obligations in Section 7.4.

5. L ICENSES

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

(a) Exelixis Research IP . Exelixis agrees to grant and hereby grants (on behalf of itself and its Affiliates) Genentech a worldwide, co-exclusive license (with the right to grant and authorize sublicenses) (i) under the Exelixis Research IP to perform its obligations and carry out any tasks or activities pursuant to the Research Plan, and (ii) under the Exelixis Know-

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How to research, develop, make (and have made), use, sell, offer for sale, and import Licensed Products in the Field, in each case including the right to practice any methods or processes. With respect to any given Licensed Product, Genentech’s license in this Section 5.1(a) shall be royalty-bearing if, and to the extent, set forth in Section 7.4 and revenue-bearing if, and to the extent, set forth in Section 7.11.

(b) Yale Licensed IP . Exelixis agrees to grant and hereby grants (on behalf of itself and its Affiliates) Genentech a worldwide, exclusive (subject to the license back from Genentech to Exelixis in Section 5.2(c) (Screening License)) license (with the right to grant and authorize sublicenses) under the Yale Licensed IP, (i) to perform its obligations and carry out any tasks or activities pursuant to the Research Plan, and (ii) to research, develop, make (and have made), use, sell, offer for sale, and import Licensed Products in the Field, in each case including the right to practice any methods or processes. With respect to any given Licensed Product, Genentech’s license in this Section 5.1(b) shall be royalty-bearing if, and to the extent, set forth in Section 7.4 and revenue-bearing if, and to the extent, set forth in Section 7.11.

(c) Collaboration IP . Exelixis agrees to grant and hereby grants (on behalf of itself and its Affiliates) Genentech a worldwide, exclusive (subject to the licenses back from Genentech to Exelixis under Section 5.2(a) and Section 5.2(b)) license (with the right to grant and authorize sublicenses) under Exelixis’ interest in and to any Collaboration IP (whether Joint Collaboration IP or Exelixis’ Sole Collaboration IP), (i) to perform its obligations and carry out tasks and activities pursuant to the Research Plan, and (ii) to research, develop, make (and have made), use, sell, offer for sale, and import Licensed Products in the Field, in each case including the right to practice any methods or processes. With respect to a given Licensed Product, Genentech’s license in this Section 5.1(c) shall be royalty-bearing if, and to the extent, set forth in Section 7.4 and revenue-bearing if, and to the extent, set forth in Section 7.11.

(d) Screening License . Exelixis agrees to grant and hereby grants (on behalf of itself and its Affiliates) Genentech a worldwide, non-exclusive, royalty-bearing license, under the Yale Patents, to screen Small Molecule Compounds against targets that are not Collaboration Targets but are within the Notch signaling pathway. The foregoing license does not include the right to grant or authorize sublicenses; however, Genentech may have any of the foregoing performed on its behalf, where the benefit of that performance accrues primarily or exclusively to Genentech.

(e) Collaboration Reagents and Collaboration Assays . Exelixis agrees to grant and hereby grants (on behalf of itself and its Affiliates) Genentech a worldwide, royalty-free license to make and use Collaboration Reagents and Collaboration Assays for any purpose, which license is (i) exclusive (subject to the licenses back from Genentech to Exelixis under Section 5.2(a) and Section 5.2(b)) under the Yale Licensed IP and Collaboration IP, and (ii) non-exclusive under the Exelixis Know-How. The foregoing license includes the right to grant and authorize sublicenses, but only (x) where the Sublicensee either is an Affiliate of Genentech or is also a Sublicensee with respect to Licensed Products or (y) in connection with a Diagnostic.

(f) Collaboration Inventions . Exelixis agrees to grant and hereby grants (on behalf of itself and its Affiliates) Genentech a worldwide, royalty-free license (including the right to grant and authorize sublicenses) to Collaboration Inventions (other than Collaboration

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Reagents, Collaboration Assays, or Licensed Products), including making (and having made), using and selling any such Collaboration Inventions, which license is (i) exclusive under the Yale Licensed IP and Collaboration IP, and (ii) non-exclusive under the Exelixis Know-How.

(g) Follow-On Exelixis IP . Exelixis agrees to grant and hereby grants (on behalf of itself and its Affiliates) Genentech a worldwide, non-exclusive, royalty-free, fully paid up license (with the right to grant and authorize sublicenses) under the Follow-On Exelixis IP, to research, develop, make (and have made), use, sell, offer for sale, and import Licensed Products in the Field, in each case including the right to practice any methods or processes.

(h) Sublicensing . For those licenses granted under this Section 5.1 that grant Genentech the right to grant and authorize sublicenses, sublicenses must not be inconsistent with, or cause Genentech to be in breach of, with the terms and conditions of this Agreement. Genentech shall also provide to Exelixis the name of each Sublicensee and a copy of the sublicense agreement (which may be redacted to remove highly confidential information), except where the Sublicensee is an Affiliate of Genentech. Genentech shall remain responsible for each permitted Sublicensee’s compliance with the material and applicable terms and conditions of this Agreement. Except when the sublicense is to an Affiliate of Genentech, Genentech’s rights to sublicense do not include rights to [ * ] ; in other words, sublicenses shall not include any right [ * ] except in connection with a Diagnostic.

5.2 Licenses to Exelixis . Subject to the terms of this Agreement:

(a) Research License . Genentech agrees to grant and hereby grants (on behalf of itself and its Affiliates) Exelixis a worldwide, non-exclusive license (with the right to grant and authorize sublicenses) under the Genentech Licensed IP, under Genentech’s Sole Collaboration IP, and under other Collaboration IP and the Yale Licensed IP to the extent exclusively licensed to Genentech under Section 5.1 above, during the Research Term, to perform its obligations and carry out any tasks or activities pursuant to the Research Plan, including the right to practice any methods or processes.

(b) Collaboration Reagents and Collaboration Assays . [ * ] .

(c) Screening License . Genentech agrees to grant and hereby grants (on behalf of itself and its Affiliates) Exelixis a worldwide, non-exclusive, royalty-bearing license, under the Yale Patents to the extent exclusively licensed to Genentech under Section 5.1 above, to screen Small Molecule Compounds against the Collaboration Targets. The foregoing license does not include the right to grant or authorize sublicenses, or to have any screening activities performed on its behalf.

5.3 Information and Know-How . The Parties understand and agree that neither Party is required to provide the other with any Information other than Information either expressly required to be provided, Information to which access is expressly provided or required, or Information created pursuant to the Research Plan. Without limiting the foregoing, neither Party is required to provide to the other any Information regarding [ * ] .

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5.4 No Additional Licenses . Except as expressly provided in Sections 5.1 and 5.2, 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).

6. G ENENTECH AND E XELIXIS N EGOTIATION R IGHTS

6.1 Exelixis [ * ] . Notwithstanding the limitations on Exelixis’ license under Section 5.2(b), Exelixis may [ * ] , but only (a) [ * ] , or (b) [ * ] . Whether or not Exelixis has an obligation or Genentech has a right under Section 6.2 below, [ * ] is subject to the conditions in Section 6.3 below.

6.2 Genentech Right to Negotiate.

(a) Notice by Exelixis . If Exelixis intends to work with a Third Party to develop or commercialize an Exelixis Reagent Product, then unless Exelixis already has [ * ] , Exelixis first shall offer such opportunity to Genentech by providing written notice to Genentech. That notice must include all of the following: (i) the identity of the Exelixis Reagent Product; (ii) [ * ] ; and (iii) the indication(s) for which the Exelixis Reagent Product is being developed. After Genentech’s receipt of the notice, Genentech may request additional information, and Exelixis shall make available to Genentech, in a reasonable manner and at a convenient location: (x) [ * ] then a copy of all such items; (y) [ * ] ; and (z) [ * ] . In addition to the foregoing information, during the [ * ] days after Genentech receives that notice, Exelixis shall respond promptly to Genentech’s reasonable inquiries regarding that Exelixis Reagent Product.

(b) Designation by Genentech . At any time during the [ * ] days after Exelixis provides notice to Genentech under Section 6.2(a) above, Genentech may inform Exelixis, in writing, that it wishes to negotiate the terms on which Exelixis and Genentech would work together to develop and commercialize any Exelixis Reagent Product. If Genentech declines in writing to negotiate such terms, then Exelixis is free to work with a Third Party to further develop and to commercialize that Exelixis Reagent Product, but subject to the terms of Section 6.3. If Genentech does not decline in writing to negotiate such terms, then the Parties shall negotiate in good faith exclusively for [ * ] days the terms on which Exelixis and Genentech would work together to develop and commercialize that Exelixis Reagent Product. If the Parties are unable to agree on terms prior to the end of the [ * ] -day negotiation period, then Exelixis is free to work with a Third Party to develop and commercialize that Exelixis Reagent Product, but subject to the terms of Section 6.3. In addition, Exelixis’ obligation to provide notice under Section 6.2(a) and Genentech’s right to negotiate the terms on which Exelixis and Genentech would work together to develop and commercialize any Exelixis Reagent Product under this Section 6.2(b) extends [ * ] .

6.3 Terms for Third Party Partner for Exelixis Reagent Products . Exelixis may work with a Third Party with respect to any particular Exelixis Reagent Product no longer subject to either the notice requirements of Section 6.2(a) or Genentech’s rights under Section 6.2(b), and further may disclose to that Third Party Confidential Information of Genentech related to Collaboration Assays and Collaboration Reagents, solely as necessary to further develop and to commercialize that Exelixis Reagent Product, subject to the following three (3) conditions: (a) Exelixis’ agreement with that Third Party must include [ * ] ; (b) Exelixis shall [ * ] ; and (c) [ * ] .

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6.4 Exelixis Right to Negotiate .

(a) Notice by Genentech . If Genentech intends to sublicense to a Third Party Genentech’s rights to develop or commercialize a Profit Share Product in the United States, then Genentech first shall offer such opportunity to Exelixis by providing written notice to Exelixis. That notice must include all of the following: (i) the identity of the Profit Share Product; (ii) [ * ] ; and (iii) if Genentech is developing that Profit Share Product for [ * ] , then the [ * ] . After Exelixis’ receipt of the notice, Exelixis may request additional information, and Genentech shall make available to Exelixis, in a reasonable manner and at a convenient location, the following information to the extent it relates to the United States: (x) [ * ] ; (y) [ * ] ; and (z) [ * ] . In addition to the foregoing information, during the [ * ] days after Exelixis receives that notice, Genentech shall respond promptly to Exelixis’ reasonable inquiries regarding that Profit Share Product.

(b) Designation by Exelixis . At any time during the [ * ] days after Genentech provides notice to Exelixis under Section 6.4(a) above, Exelixis may inform Genentech, in writing, that it wishes to negotiate the terms on which Genentech would sublicense to Exelixis Genentech’s rights to develop or commercialize that Profit Share Product in the United States. If Exelixis declines in writing to negotiate such terms, then Genentech is free to offer a Third Party the opportunity to negotiate the terms of a sublicense to Genentech’s rights to develop or commercialize that Profit Share Product in the United States. If Exelixis does not decline in writing to negotiate such terms, then the Parties shall negotiate in good faith exclusively for [ * ] days the terms on which Exelixis would sublicense Genentech’s rights to develop or commercialize that Profit Share Product in the United States. If the Parties are unable to agree on terms prior to the end of the [ * ] -day negotiation period, then Genentech is free to offer a Third Party the opportunity to negotiate the terms of a sublicense to Genentech’s rights to develop or commercialize that Profit Share Product in the United States. In addition, Genentech’s obligation to provide notice under Section 6.4(a) and Exelixis’ right to negotiate the terms on which Exelixis would acquire a sublicense to Genentech’s rights to develop or commercialize a Profit Share Product under this Section 6.4(b) extends [ * ] .

7. C OMPENSATION

7.1 Upfront Fee . Genentech shall pay Exelixis a one-time fee of [ * ] within thirty (30) days after the Effective Date. Such fee shall be noncreditable and nonrefundable.

7.2 Research Support for the Research Plan . Genentech shall provide Exelixis with a guaranteed [ * ] in Research Funding for each twelve (12) month period during the Research Term. Genentech has no obligation to provide any Research Funding in excess of the foregoing. The foregoing Research Funding is to be used for (a) FTEs to the extent working on the Research Plan and for (b) the costs of work performed by Third Parties under the Research Plan on behalf of Exelixis, all as determined by the JRC pursuant to Section 2.2. The rate for Exelixis FTEs assigned to the Research Plan is a fully-burdened annual rate of [ * ] in the first year, to increase in subsequent years of the Research Term by no more than the [ * ] .

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Genentech shall pay to Exelixis the Research Funding in equal quarterly payments, [ * ] . Within [ * ] days after the Effective Date, Genentech will make the first such quarterly payment (which, if prorated to coincide with a calendar quarter, will cause the final quarterly payment also to be prorated). [ * ] . All Research Funding paid by Genentech to Exelixis pursuant to this Section 7.2 shall be noncreditable and nonrefundable.

7.3 Milestone Payments for Royalty Products . Genentech shall pay Exelixis the milestone payments set forth in the table below within [ * ] days of each occurrence (by Genentech, or by its Affiliates or Sublicensees) of the milestone events described in subsection (a) – (g) of the table below for each Licensed Product that, at the time the milestone occurs, [ * ] . Such milestone payments are payable [ * ] . Milestones are not payable for Licensed Products that are [ * ] . All milestone payments shall be nonrefundable and noncreditable.

Milestone Events

Amounts

(a) [ * ]

[ * ]

(b) [ * ]

[ * ]

(d) [ * ]

[ * ]

(e) [ * ]

[ * ]

(f) [ * ]

[ * ]

(g) [ * ]

[ * ]

*	A European Major Market Country is the *[ ]** .

7.4 Royalties for Royalty Products . The following royalties are payable on Royalty Products. In no event are such royalties payable for [ * ], and in no event shall a Licensed Product be [ * ]

(a) Class I Claims. Subject to Section 7.8, on a Royalty Product-by-Royalty Product and a country-by-country basis, Genentech shall pay Exelixis royalties equal to [ * ] of

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the Net Sales that occur during the Royalty Term for each sale of a Royalty Product Covered by any Class I Claim in the country of sale.

(b) Class II Claims. Subject to Section 7.8, on a Royalty Product-by-Royalty Product and a country-by-country basis, Genentech shall pay Exelixis royalties equal to [ * ] of the Net Sales that occur during the Royalty Term for each sale of a Royalty Product Covered by any Class II Claim in the country of sale.

(c) [ * ] . Subject to Section 7.8, on a Royalty Product-by-Royalty Product and country-by-country basis, Genentech shall pay Exelixis royalties equal to [ * ] of the Net Sales that occur during the Royalty Term for each Royalty Product Covered by [ * ] .

(d) Generally. [ * ] .

7.5 Royalties Paid by Genentech for Genentech Screening Products . On a Genentech Screening Product-by-Genentech Screening Product and country-by-country basis, Genentech shall pay Exelixis royalties equal to [ * ] of the Net Sales of such Genentech Screening Product in that country during the Royalty Term.

7.6 Royalties Paid by Exelixis for Exelixis Screening Products . On an Exelixis Screening Product-by-Exelixis Screening Product and country-by-country basis, Exelixis shall pay Genentech royalties equal to [ * ] of the Net Sales of such Exelixis Screening Product in that country during the Royalty Term.

7.7 Royalties Paid by Exelixis for Exelixis Reagent Products . On an Exelixis Reagent Product-by-Exelixi

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