DRUG DISCOVERY AND DEVELOPMENT AGREEMENT

Development Agreement

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ARRAY BIOPHARMA INC | 3200 Walnut, Boulder, CO | Celgene Corporation

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Title: DRUG DISCOVERY AND DEVELOPMENT AGREEMENT
Governing Law: New York Date: 11/6/2007
Industry: Biotechnology and Drugs Sector: Healthcare

DRUG DISCOVERY AND DEVELOPMENT AGREEMENT, Parties: array biopharma inc , 3200 walnut boulder co , celgene corporation

EXHIBIT 10.1

[ * ] = 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.

EXECUTION COPY

DRUG DISCOVERY AND DEVELOPMENT AGREEMENT

THIS DRUG DISCOVERY AND DEVELOPMENT AGREEMENT (the “ Agreement ”) is made effective as of September 21, 2007 (“ Effective Date ”) by and between Array BioPharma Inc., a Delaware corporation, having its principal offices located at 3200 Walnut, Boulder, CO 80301 (“ Array ”), and Celgene Corporation, a Delaware corporation, having its principal offices located at 86 Morris Avenue, Summit, NJ 07901 (“ Celgene ”).

BACKGROUND

A. Array has skills, expertise and technology relating to the discovery and development of therapeutics that modulate molecular targets involved in oncology and other disease areas.

B. Celgene is engaged in the discovery, development and commercialization of therapeutics in the fields of oncology and immunological diseases.

C. Celgene and Array desire to establish a collaboration to apply Array’s expertise and technology to the discovery, optimization and development of small molecule compounds that directly bind and modulate certain molecular targets, and to provide for the development and commercialization of certain products based on such compounds, all on the terms and conditions set forth in this Agreement.

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

ARTICLE I
DEFINITIONS

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

1.1 “ **[ * ] ” shall mean those [ * ]** previously agreed by the Parties.

1.2 “ Affiliate ” of a Party shall mean any person, corporation or other entity that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Party, as the case may be, for so long as such control exists. As used in this Section 1.1, “ control ” shall mean: (a) to possess, directly or indirectly, the power to direct the management and policies of such person, corporation or other entity, whether through ownership of voting securities or by contract relating to voting rights or corporate governance; or (b) direct or indirect beneficial ownership of at least fifty percent (50%) (or such lesser percentage that is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) of the voting share capital in such person, corporation or other entity.

1.3 “ Analog ” shall mean, with respect to a specific Development Compound, Development Back-Up Compound, Collaboration Compound, Collaboration Back-Up Compound or Abandoned Compound, molecules (a) that have the same core structure (meaning exact atom arrangement that makes up the original core structure present in the structure of such specific chemical compound, minus any substituent R groups) as such specific Development Compound, Development Back-Up Compound, Collaboration Compound, Collaboration Back-Up Compound or Abandoned Compound; (b) that modulates the Target to which such Development Compound, Development Back-Up Compound, Collaboration Compound, Collaboration Back-Up Compound or Abandoned Compound is directed, the mechanism of action of which is a specific interaction with such Target; and (c) that has a **[ * ]** .

1.4 “ Annual Net Sales ” shall mean total Net Sales of Licensed Products in a particular calendar year, as derived from audited financial statements of Celgene (or the applicable Affiliate or Sublicensee), provided, however, that Celgene shall use U.S. generally accepted accounting principles to calculate in good faith the Net Sales from any entities that are not audited or have not completed their audit within seventy-five (75) days of the end of the preceding calendar year.

1.5 “ Array Technology ” shall mean the Array Patents and Array Know-How.

1.5.1 “ Array Know-How ” shall mean any and all Information Controlled by Array and created prior to the Effective Date that: (a) covers a Collaboration Compound or a Collaboration Back-Up Compound (including the composition of matter, or manufacture or any use thereof); and (b) is necessary for Celgene to exercise the rights licensed to it under the Agreement or perform its obligations with respect to Collaboration Compounds, Collaboration Back-Up Compounds and Licensed Products under the Agreement. For the purposes of the license granted in Section 5.1.2, Array Know-How shall also include any and all Information Controlled by Array and created prior to the Effective Date that is necessary for, or specifically pertains to, the discovery, development or use of Compounds, Development Compounds and Development Back-Up Compounds.

1.5.2 “ Array Patents ” shall mean all Patents owned or Controlled by Array (a) as of the Effective Date, or (b) during the Term of this Agreement to the extent that such Patents claim Array Know-How, in each case that: (i) claim a Collaboration Compound or a Collaboration Back-Up Compound (including the composition of matter, or manufacture or any use thereof); and (ii) are necessary for Celgene to exercise the rights licensed to it under the Agreement or perform its obligations with respect to Collaboration Compounds, Collaboration Back-Up Compounds and Licensed Products under the Agreement. For the purposes of the license granted in Section 5.1.2, Array Patents shall also include all Patents owned or Controlled by Array as of the Effective Date covering inventions that are necessary for the discovery, development, or use of Compounds, Development Compounds and Development Back-Up Compounds.

Notwithstanding Sections 1.5.1 and 1.5.2 above, the Array Technology shall not include Collaboration Patents or Collaboration Know-How.

1.6 “ Celgene Compound ” shall mean a chemical entity provided to Array by Celgene, in Celgene’s sole discretion, and agreed on by the JRC as evidenced by written notice that such chemical entity is provided for research and development purposes under this Agreement.

1.7 “ Celgene Technology ” shall mean the Celgene Patents and Celgene Know-How.

1.7.1 “ Celgene Know-How ” shall mean any and all Information Controlled by Celgene and (a) created prior to the Effective Date or during the Option Term that is necessary for the discovery, development, manufacture, use or sale of Compounds, Development Compounds and Back-Up Compounds directed to each Target for which Celgene does not exercise the Celgene Product Option, and (b) which is contributed by Celgene during the Option Term, in Celgene’s sole discretion, to the collaboration hereunder, as evidenced by written notice from Celgene to Array and agreed on by the JRC or JDC.

1.7.2 “ Celgene Patents ” shall mean all Patents owned or Controlled by Celgene (a) prior to the Effective Date or during the Option Term covering inventions that are necessary for the discovery, development, manufacture, use or sale of Compounds, Development Compounds and Back-Up Compounds directed to each Target for which Celgene does not exercise the Celgene Product Option, and (b) which are contributed by Celgene during the Option Term, in Celgene’s sole discretion, the collaboration hereunder, as evidenced by written notice from Celgene to Array and agreed on by the JRC or JDC.

Notwithstanding Sections 1.7.1 and 1.7.2 above, the Celgene Technology shall not include Collaboration Patents or Collaboration Know-How.

1.8 “ Collaboration Compound ” means each Development Compound for which Celgene has exercised its Celgene Product Option under Section 3.5 of this Agreement and which is identified in the written notice given by Celgene to effect such exercise.

1.9 “ Collaboration Technology ” shall mean the Collaboration Patents and Collaboration Know-How.

1.9.1 “ Collaboration Know-How ” shall mean any Information generated, solely or jointly, by employees, consultants or agents of Array and/or Celgene in the course of performing activities under the Discovery Program or in accordance with the applicable Development Plan, or, solely with respect to Array, activities directed to the development, manufacture and/or use of Compounds, Development Compounds, Collaboration Compounds, Back-Up Compounds,

Development Back-Up Compounds, Collaboration Back-Up Compounds, Licensed Products, in each case during the Option Term.

1.9.2 “ Collaboration Patents ” shall mean all Patents covering inventions conceived or created, solely or jointly, by employees, consultants or agents of Array and/or Celgene in the course of performing activities under the Discovery Program or in accordance with the applicable Development Plan, or, solely with respect to Array, activities directed to the development, manufacture and/or use of Compounds, Development Compounds, Collaboration Compounds, Back-Up Compounds, Development Back-Up Compounds, Collaboration Back-Up Compounds or Licensed Products, in each case during the Option Term.

1.10 “ Combination Product ” shall mean a Licensed Product that is a pharmaceutical preparation for human use incorporating two or more therapeutically active ingredients and including a Collaboration Compound as one of its active ingredients. Notwithstanding the foregoing, drug delivery vehicles, adjuvants, and excipients shall not be deemed to be “therapeutically active ingredients,” and their presence shall not be deemed to create a Combination Product under this Section 1.10.

1.11 “ Compound ” shall mean a small molecule chemical entity (a) that is (i) synthesized and/or assayed against a Target by Array prior to the Effective Date, (ii) first synthesized and/or assayed by or on behalf of a Party in the course of performing activities under the Discovery Program, or (iii) a Celgene Compound; (b) that modulates one or more Target(s), the mechanism of action of which is a specific interaction with such Target; and (c) that has **[ * ]** .

1.12 “ Control ” (including any variations, such as “ Controlled ” or “ Controlling ”), with respect to any Compound or intellectual property rights, shall mean rights to a Compound or intellectual property sufficient to grant the applicable license under this Agreement, without violating the terms of any agreement or other arrangement with any Third Party or, without the other Party’s written consent, requiring any payment to a Third Party.

1.13 “ Derivative ” shall mean a molecule (a) that is synthesized using the same synthetic route such that such molecule is derived from the Development Compound by one synthetic step and such that any compound modifications (i.e., differences between such molecule and the corresponding Development Compound) are readily determined to be related to or derived from the Development Compound, and (b) that has **[ * ]** .

1.14 “ Development Back-Up Compound ” shall mean, with respect to each Compound designated as a Development Compound, additional Lead Compounds suitable for clinical development designated in accordance with Section 3.5.3 below.

1.15 “ Development Compound ” shall mean a Compound that is designated for further development in clinical trials, in accordance with Section 3.5.2 below.

1.16 “ Diligent Efforts ” shall mean the carrying out of obligations or tasks in a manner consistent with the efforts a Party devotes to a product or a research, development or marketing project at a similar stage of research or development that is of similar market potential, profit potential or strategic value resulting from its own research efforts, but in no event using less than the commercially reasonable standards applied by other public biotechnology companies to their pharmaceutical products at a similar stage of research or development that is of similar market potential, profit potential or strategic value.

1.17 “ FDA ” shall mean the United States Food and Drug Administration, or any successor entity thereto performing similar functions.

1.18 “ FD&C Act ” shall mean the United States Federal Food, Drug, and Cosmetic Act, as amended from time to time, and the regulations promulgated thereunder, as amended from time to time.

1.19“ FTE ” shall mean a full-time person employed by Array, dedicated full-time to the Discovery Program, or in the case of less than a full-time dedicated person, a full-time, equivalent

person year, based upon a total of one thousand eight hundred eighty (1,880) hours per year of work on the Discovery Program.

1.20 “ GAAP ” shall mean generally accepted accounting principles as applicable in the United States of America.

1.21 “ IND ” shall mean any Investigational New Drug Application filed with the FDA pursuant to 21 C.F.R. § 312 before the commencement of clinical trials involving a Development Compound, a Development Back-Up Compound, a Collaboration Compound or a Collaboration Back-Up Compound (or any Licensed Product incorporating a Collaboration Compound or Collaboration Back-Up Compound), or any comparable filings with any Regulatory Authority in any other jurisdiction.

1.22 “ Information ” shall mean materials, data and other information relating to the subject matter of this Agreement and including: (a) techniques and data, including screens, models, inventions, methods, test data (including, pharmacological, toxicological and clinical test data), analytical and quality control data, marketing, pricing, distribution, costs, and sales data, manufacturing information, and patent and legal data or descriptions (to the extent that disclosure thereof would not result in loss or waiver of privilege or similar protection); (b) compositions of matter, including compounds, biological materials and assays; and (c) the subject matter and content of all JRC, JDC, JMC and JCC discussions and meetings. As used herein, “ clinical test data ” shall be deemed to include all information related to the clinical or preclinical testing of a Compound or Licensed Product, including patient report forms, investigators’ reports, biostatistical, pharmaco-economic and other related analyses, regulatory filings and communications, and the like.

1.23 “ Initiation ” of a particular clinical trial shall be deemed to occur upon the date of first dosing of the first subject in such trial.

1.24 “ Licensed Product ” shall mean a product that incorporates a Collaboration Compound or a Collaboration Back-Up Compound as an active ingredient.

1.25 “ Marketing Approval ” shall mean all approvals, licenses, registrations or authorizations of a Regulatory Authority in a country necessary for the manufacture, use, storage, import, marketing and sale of a Licensed Product in such country.

1.26 “ Marketing Approval Application ” or “ MAA ” shall mean a New Drug Application (as defined in 21 C.F.R. § 314.50 et. seq .) or a comparable application for Marketing Approval (not including pricing or reimbursement approval) in another jurisdiction, in each case with respect to a Licensed Product.

1.27 “ Marketing Exclusivity ” shall mean , with respect to a Licensed Product that the Licensed Product has been granted marketing exclusivity afforded approved drug products pursuant to (a) Sections 505(c), 505(j), and 505A of the FD&C Act or its equivalent in a country other than the United States, or (b) the orphan drug exclusivity afforded approved drugs designated for rare diseases or conditions under Sections 526 and 527 of the FD&C Act or its equivalent in a country other than the United States, or (c) applicable law covering the Licensed Product which precludes the Regulatory Authority in a country from granting Marketing Approval for another product that contains the same active ingredient as that which is contained in the applicable Licensed Product .

1.28 “ Net Sales ” shall mean the gross amounts billed or invoiced by Celgene, its Affiliates or Sublicensees to non-Sublicensee Third Parties for the sale or other commercial disposition of Licensed Products less deductions from such amounts calculated in accordance with GAAP, so as to arrive at reported Net Product Sales under GAAP, and further reduced by write offs of accounts receivable or increased for collection of accounts that were previously written off.

Sales between Celgene and its Affiliates or Sublicensees and Licensed Products provided to Third Parties at no cost, or below direct manufacturing cost, in connection with research and development, clinical trials, compassionate sales or indigent programs or for use as samples shall be excluded from the computation of Net Sales, and no payments will be payable on such sales or no-cost transfers except where such Affiliates or Sublicensees are end users. If a Licensed Product is sold or transferred for consideration other than cash, or in a transaction not at arm’s length, the Net

Sales from such sale or transfer shall be deemed the then-fair market value of such Licensed Product.

In the event a Licensed Product is sold which is a Combination Product, for purposes of determining royalty payments due Array under Section 6.5, Net Sales of Combination Products shall be calculated by multiplying the Net Sales of the Combination Product during the applicable reporting period by the fraction A/(A+B), in which “ A ” is the average sales price of the Licensed Product when such Licensed Product comprising a single Collaboration Compound or Collaboration Back-Up Compound as the sole therapeutically active ingredient is sold separately in substantial quantities, and “ B ” is the average sales price of the other therapeutically active ingredients contained in the Combination Product sold separately in substantial quantities; in each case during the applicable reporting period. In the event that no separate sales of either the Licensed Product comprising a single Collaboration Compound or Collaboration Back-Up Compound, as the case may be, as the sole therapeutically active ingredient or the other therapeutically active ingredients of the Combination Product are made during the applicable reporting period, or if the average sales price for a particular therapeutically active ingredient cannot be determined for the applicable reporting period, the respective average sales prices during the most recent reporting period in which sales of both occurred shall be used. In the event that either or both of A or (and) B is (are) not available, then Net Sales of Combination Products for the purposes of determining royalty payments hereunder shall be reasonably allocated based on the relative values contributed by each component, and agreement by the Parties to such allocation shall not be unreasonably withheld or delayed.

1.29 “ Option Term ” shall have the meaning set forth in Section 4.1.1(a).

1.30 “ Party ” or “ Parties ” shall mean Array and/or Celgene.

1.31 “ Patent ” shall mean any patents and patent applications, together with all additions, divisions, continuations, continuations-in-part, substitutions, reissues, re-examinations, extensions, registrations, patent term extensions, supplemental protection certificates and renewals of any of the foregoing.

1.32 “ Phase I ” shall mean a human clinical trial conducted on a limited number of study subjects for the purpose of gaining evidence of the safety and tolerability of, and information regarding pharmacokinetics and, with respect to applicable oncology trials, potential pharmacological activity for, a product or compound, as described in 21 C.F.R.§ 312.21(a) (including any such clinical study in any country other than the United States) .

1.33 “ Phase II ” shall mean a human clinical trial conducted on study subjects with the disease or condition being studied for the principal purpose of achieving a preliminary determination of efficacy and/or appropriate dosage ranges, as further described in 21 C.F.R. §312.21(b) (including any such clinical study in any country other than the United States).

1.34 “ Phase III ” shall mean a human clinical trial, the principal purpose of whic h is to establish safety and efficacy in study subjects with the disease or condition being studied, as further described in 21 C.F.R. §312.21(c) (including any such clinical study in a country other than the United States), which is designed and intended to be of a size and statistical power sufficient to serve as a pivotal study to support the filing of a MAA for the indication being studied.

1.35 “ Regulatory Authority ” shall mean the FDA, or a regulatory body with similar regulatory authority in any jurisdiction outside the United States.

1.36 “ Sales Representative ” shall mean a professional pharmaceutical sales representative engaged or employed by either Party to conduct sales activities and other promotional efforts with respect to a Co-Promoted Product.

1.37 “ Sublicensee ” shall mean, with respect to a particular Collaboration Compound, a Collaboration Back-Up Compound or Licensed Product, a Third Party to whom Celgene has granted a license or sublicense to make and sell such Collaboration Compound, Collaboration Back-Up Compound or Licensed Product; and a “sublicense” shall mean any agreement or arrangement between Celgene and a Sublicensee granting such rights.

1.38 “ Target ” shall mean those targets listed on Schedule 1.38 attached hereto, or any substitute for such a target mutually agreed by the Parties in accordance with Section 3.2 below or selected by Array from two (2) proposed substitute targets in accordance with Section 3.5.1 below.

1.39 “ Third Party ” shall mean any entity other than Array, Celgene and their respective Affiliates.

1.40 “ Valid Claim ” shall mean (a) a claim of an issued and unexpired Patent (including the term of any patent term extension, supplemental protection certificate, renewal or other extension) which has not been held unpatentable, invalid or unenforceable in a final decision of a court or other government agency of competent jurisdiction from which no appeal may be or has been taken, and which has not been admitted to be invalid or unenforceable through reissue, re-examination, disclaimer or otherwise; or (b) a claim of a patent application, which claim has been pending less than five (5) years from the original filing date of such claim in a given country, unless or until such claim thereafter issues as a claim of an issued Patent (from and after which time the same shall be deemed a Valid Claim subject to paragraph (a) above).

1.41 Additional Definitions . Each of the following terms shall have the meaning described in the corresponding section of this Agreement below.

Term		Section Defined
Abandoned Product		12.3.2
Array Indemnitees		11.4.2
*[ ]**		*[ ]**
*[ ]**		*[ ]**
Celgene Indemnitees		11.4.1
Celgene Product Option		4.1
Clinical Candidate Guidelines		3.5.1
Collaboration Back-Up Compound		4.1.1(b)

Commercialization Plan		8.1.2
Compound Improvement		9.2.2
Confidential Information		10.1
Cooperating Party		10.4.2
Co-Promoted Product		8.2.1
Co-Promotion Option		8.2.1
Co-Promotion Plan		8.2.2
Development Back-Up Compound		3.5.2
Development Milestone		6.3.1
Development Plan		3.6.1
Discovery Milestone		6.2
Discovery Program		3.1
Dispute		13.1
Escalation Notice		2.2.3
Exclusivity Period		5.6.2
force majeure event		13.4
Indemnify		11.4
JCC		2.1
JDC		2.1
JMC		2.1
JRC		2.1
*[ ]**		*[ ]**
Losses		11.4.1
Prosecution and Maintenance		9.5.1(a)
Prosecuting Party		9.5.1(b)
Requesting Party		10.4.2
Subject Transaction		13.3.2

Third-Party Claim		11.4.1
Trial Design Guidelines		2.3

ARTICLE II
GOVERNANCE

2.1 General . The Parties shall establish (i) a Joint Research Committee (“ JRC ”) to oversee and coordinate activities under the Discovery Program; (ii) a Joint Development Committee (“ JDC ”) for each Development Compound to oversee and coordinate clinical development of such Development Compound; (iii) a Joint Manufacturing Committee (“JMC”) to oversee and coordinate CMC activities with respect to each Development Compound and Development Back-Up Compounds; and (iv) if applicable, a Joint Commercialization Committee (“ JCC ”) for each Co-Promoted Product. Each Committee may from time to time establish sub-committees to handle matters within the scope of its authority.

2.1.1 Joint Research Committee . Within thirty (30) days following the Effective Date, Array and Celgene shall establish a Joint Research Committee.

(a) Duties . The JRC shall:

(i) establish, oversee, review and coordinate the Discovery Program, including assigning activities to be performed by each Party under the Discovery Program (subject to Section 3.1), which may require the Parties to enter into material transfer and other appropriate agreements in connection with such activities;

(ii) discuss designation of Compounds as Development Compounds and Back-Up Compounds in accordance with Section 3.5;

(iii) provide a forum for the Parties: (1) to discuss the objectives of the Discovery Program; and (2) to exchange and review scientific information and data relating to

the activities being conducted under, and the then-current progress of, the Discovery Program, including the exchange and review of data, Compound structures and the like resulting from the Discovery Program;

(iv) determine when and for which general disease area (specifically, cancer or inflammatory disease) an IND will be filed on each Development Compound; provided, however, that the Parties shall mutually agree which general disease area the IND will be filed for a Development Compound directed to a cancer/inflammation Target; and

(v) make any such decisions as are expressly allocated to the JRC under this Agreement.

(b) Termination of JRC . The JRC, on a Target-by-Target basis, shall exist until the end of the Option Term for such Target.

2.1.2 Joint Development Committee . Promptly but no later than thirty (30) days following the Effective Date, Array and Celgene shall establish a Joint Development Committee.

(a) Duties . The JDC shall:

(i) Establish and direct the strategy for the worldwide development of each Development Compound and corresponding Development Back-Up Compounds, if any, and products containing each Development Compound or a corresponding Development Back-Up Compound;

(ii) Review and finalize the applicable Development Plan for each Development Compound and, if applicable a corresponding Development Back-Up Compound, and propose revisions to each Development Plan as needed, but no less frequently than annually;

(iii) Subject to and within the parameters of each Development Plan: (1) oversee the implementation of the such Development Plan (including approval of clinical trial protocols and review of the conduct of clinical trials conducted pursuant to the Development

Plan); and (2) review and approve the overall strategy and positioning of all material submissions and filings with the applicable Regulatory Authorities; and

(iv) Perform such other duties as are specifically assigned to such JDC under this Agreement.

(b) Termination of JDC . The JDC shall exist, on a Target-by-Target basis, until the end of the Option Term for such Target.

2.1.3 Joint Manufacturing Committee . Promptly but no later than thirty (30) days following the designation of the first Development Compound, Array and Celgene shall establish a Joint Manufacturing Committee.

(a) Duties . The JMC shall:

(i) oversee, review and coordinate the studies required for the preparation of the CMC section of an IND for filing with the FDA for each Development Compound and, if applicable, Development Back-Up Compounds, including studies relating to analytical methods and purity analysis, and formulation and manufacturing development studies, together with associated regulatory activities;

(ii) oversee, review and coordinate process research and development activities (including manufacturing scale-up) and formulation development activities; and

(iii) Perform such other duties as are specifically assigned to such JMC under this Agreement.

(b) Termination of JMC . The JMC shall exist, on a Target-by-Target basis, until the end of the Option Term for such Target.

2.1.4 Joint Commercialization Committee . Within thirty (30) days following a request by either Party after Array’s exercise of the Co-Promotion Option, Array and Celgene shall establish a Joint Commercialization Committee, which at Celgene’s option may be split into separate Joint Commercialization Committees for each Co-Promoted Product. The JCC shall have as its overall purpose oversight of the commercialization of Co-Promoted Products in the United States.

(a) Duties : The JCC shall:

(i) Review and approve the Co-Promotion Plan for each Co-Promoted Product developed in accordance with Section 8.2.2 below;

(ii) Subject to and within the parameters of the Co-Promotion Plan, oversee the implementation of the Co-Promotion Plan; and

(iii) Perform such other duties as are specifically assigned to such JCC under this Agreement.

2.2 General Committee Membership and Procedures .

2.2.1 Committee Membership . Each Committee shall each be composed of three (3) representatives from each of Celgene and Array. Each Party may replace any of its representatives on any Committee at any time with prior written notice to the other Party; provided that such replacement is of comparable standing and authority within that Party’s organization as the person he or she is replacing.

2.2.2 Committee Meetings . The JRC and JDC shall hold an initial joint meeting within forty-five (45) days of the Effective Date or as otherwise agreed by the Parties. Thereafter, each Committee shall meet at least once every calendar quarter, unless the respective Committee members otherwise agree. All Committee meetings may be conducted by telephone, video-conference or in person as determined by the applicable Committee; provided, however, that each Committee shall meet in person at least once each calendar year, unless the Parties mutually agree to

meet by alternative means. Unless otherwise agreed by the Parties, all in-person meetings for each Committee shall be held on an alternating basis between Array’s facilities and Celgene’s facilities. With the consent of the Parties (not to be unreasonably withheld or delayed), a reasonable number of other representatives of a Party may attend any Committee meeting as non-voting observers (provided that such additional representatives are under obligations of confidentiality and non-use applicable to the Confidential Information of the other Party that are at least as stringent as those set forth in Article 10). Each Party shall be responsible for all of its own personnel and travel costs and expenses relating to participation in Committee meetings.

2.2.3 Decision-Making . Decisions of each Committee with decision-making authority shall be made by unanimous vote. In the event such Committee fails to reach unanimous agreement with respect to a particular matter within its decision-making authority, then, either Party may, by written notice to the other Party (an “ Escalation Notice ”), have such matter referred to the following individuals of each Party or his/her designee (the “Negotiators”): for disputes originating in the JRC, the heads of research of each Party shall serve as Negotiators; and the Negotiators for disputes originating in the JDC and the JMC shall be the heads of clinical development and manufacturing, respectively. The Negotiators shall meet promptly and negotiate in good faith to resolve such matter. If the Negotiators are unable to resolve such matter within thirty (30) days of the date of the applicable Escalation Notice, or such longer period of time as the Negotiators may agree, the matter shall be referred to the Chief Executive Officers of the Parties, who shall meet promptly and negotiate in good faith to resolve such matter. If the Chief Executive Officers are unable to resolve such matter within thirty (30) days, or such longer period of time as the Chief Executive Officers may agree: (a) Celgene shall cast the deciding vote on any such matter before the JCC; (b) except as set forth in Section 3.5 below, Array shall cast the deciding vote on any such matter before the JRC; (c) except as set forth in Section 3.5 below, the deciding vote on any such matter before the JDC shall be made by an arbitrator in accordance with Section 2.3 below, provided, however, that, Celgene shall have the exclusive right to select the indication for each Development Compound from the list attached hereto as Schedule 2.2.3(c) ; and (d) Array shall cast the deciding vote on any such matter before the JMC. Notwithstanding the foregoing, neither Party

nor the arbitrator (for matters subject to Section 2.3 below) shall have the right to cast the deciding vote in any manner that would unilaterally impose a financial obligation on Array or Celgene, as the case may be, beyond the commitments set forth herein or cause it to violate any obligation or agreement it may have with any Third Party.

2.3 Binding Arbitration . In the event the JDC cannot reach agreement with respect to a particular matter that is properly to be decided by unanimous vote of the JDC under Section 2.2.3(c) above, and such matter is not resolved by the applicable Negotiators in accordance with Section 2.2.3 above, then the matter shall be referred to binding arbitration by one (1) arbitrator. In such arbitration, the arbitrator shall be an independent expert (including in the area of the dispute) in the pharmaceutical or biotechnology industry mutually acceptable to the Parties. The Parties shall use their best efforts to mutually agree upon one (1) arbitrator; provided, however, that if the Parties have not done so within ten (10) days after initiation of arbitration hereunder, or such longer period of time as the Parties have agreed to in writing, then such arbitrator shall be an independent expert as described in the preceding sentence selected by the Chicago office of the American Arbitration Association. Such arbitration shall be limited to casting the deciding vote with respect to matter in dispute, and in connection therewith, each Party shall submit to the arbitrator in writing its position on and desired resolution of such matter. Such submission shall be made within ten (10) days of the selection or appointment of the arbitrator, and the arbitrator shall rule on such matter and cast the deciding vote within ten (10) days of receipt of the written submissions by both Parties. The arbitrator shall select one of the Party’s positions as his decision, and shall not have authority to render any substantive decision other than to so select the position of either Celgene or Array; provided, however, that the arbitrator shall not have the authority to select a Party’s position if such position would require Array to conduct clinical trial activities that are not within the general guidelines and objectives for trial designs previously agreed by the Parties (“ Trial Design Guidelines ”) as interpreted by the arbitrator. Except as provided in the preceding sentence, such arbitration shall be conducted in accordance with the then-current Commercial Arbitration Rules of the American Arbitration Association. The arbitrator’s ruling and vote shall be final and binding upon the Parties. The costs of any arbitration conducted pursuant to this Section 2.3 shall be borne

equally by the Parties. The Parties shall use diligent efforts to cause the completion of any such arbitration within sixty (60) days following a request by any Party for such arbitration.

2.4 Scope of Governance . Notwithstanding the creation of each of the Committees, each Party shall retain the rights, powers and discretion granted to it under this Agreement, and no Committee shall be delegated or vested with rights, powers or discretion unless such delegation or vesting is expressly provided herein, or the Parties expressly so agree in writing. No Committee shall have the power to amend or modify this Agreement, and no decision of any Committee shall be in contravention of any terms and conditions of this Agreement. It is understood and agreed that issues to be formally decided by a particular Committee are only those specific issues that are expressly provided in this Agreement to be decided by such Committee, as applicable.

ARTICLE III
DISCOVERY PROGRAM

3.1 Discovery Program . During the Option Term, Array and, if directed by the JRC, JDC or JMC and expressly agreed by Celgene in writing, Celgene shall be responsible for conducting a discovery research program with the principal goals of: (i) identifying and discovering Compounds that directly modulate each of the Targets; (ii) characterizing, optimizing and supporting the pre-clinical development of such Compounds; (iii) conducting a Phase I clinical trial and, where applicable under Section 3.7.3 below, a Phase II clinical trial with respect to Compounds that have been designated as Development Compounds pursuant to Section 3.5 below; and (iv) if required pursuant to Section 3.7.4 below, conducting continued preclinical development and potentially a Phase I clinical trial with respect to certain Development Back-Up Compounds (“ Discovery Program ”). During the Option Term, Array shall, on a Target-by-Target basis, use Diligent Efforts to conduct the Discovery Program with respect to such Target.

3.2 Targets .

3.2.1 General . Except as otherwise specified in this Section 3.2, the Discovery Program shall be focused on identifying, for each of the Targets, Development Compounds and

corresponding Development Back-Up Compounds that directly modulate the activity of each such Target, with the goal of completing early clinical development of a Development Compound and, if required pursuant to Section 3.7.4 below, a corresponding Development Back-Up Compound, directed to each of up to four (4) Targets for possible exercise by Celgene of its Product Options.

3.2.2 Abandonment and Substitution of Targets . From time to time during the Option Term, the JRC may determine in good faith that the Discovery Program has not yielded sufficient progress with respect to one or more Targets ( e.g. , because such Target is found to be intractable, modulation of such Target does not yield a therapeutically relevant outcome or modulation of such Target presents unwanted side effects), and that research and/or development activities with respect to such Target should be discontinued. If such activities are **[ * ]** , then Celgene may propose, after discussion with the JRC, and subject to the mutual written agreement of the Parties, another molecular target as a substitute for such discontinued Target. In such case, (i) the discontinued Target shall cease to be a Target, the substitute target shall be deemed a Target for the purposes of this Agreement and Schedule 1.38 shall be deemed to be updated accordingly; and (ii) the Option Term for the substitute Target shall commence on the date that Parties agree on the substitute Target ( i.e. , such date shall be deemed the Effective Date for such Target for purposes of Section 4.1.1(a)); provided, however, that if research and/or development activities with respect to such substitute Target, or with respect to a substitute Target selected pursuant to Section 3.5.1, are subsequently discontinued pursuant to this Section 3.2.2, the discontinued substitute Target shall not be replaced with a new molecular target.

3.3 Discovery Program Funding . Except as otherwise provided in this Agreement, Array will be responsible for funding its activities under the Discovery Program, including under each Development Plan, during the Option Term.

3.4 Updates; Reports . During the Option Term, Array shall provide Celgene with regular updates no less than once a month on the results of the Discovery Program. Such updates shall be conducted by telephone or video-conference, and prior to each such update, Array shall provide Celgene with a written summary of the activities conducted under the Discovery Program for the

preceding calendar month and supporting data related thereto. Celgene shall have the right to reasonably request and to receive in a timely manner clarifications and answers to questions with respect to such reports.

3.5 Designation of Development Compounds and Development Back-Up Compounds .

3.5.1 Clinical Candidate Guidelines; Lead Compounds . The Parties have previously established clinical candidate guidelines (“Clinical Candidate Guidelines”) for each Target to indicate the suitability of Compounds as Development Compounds. Such Clinical Candidate Guidelines may be amended upon mutual written agreement of the Parties or subsequent Clinical Candidate Guidelines may be agreed in writing by the Parties and attached to this Agreement from time to time as appropriate, and in each case such agreement shall not be unreasonably withheld or delayed. For each Target, the JRC shall **[ * ] . If the Parties mutually agree that a particular Compound does not strictly meet the Clinical Candidate Guidelines, but should be considered as a potential Development Compound, then the JRC may [ * ] , the Parties may mutually agree that the JRC may [ * ] , then Celgene shall have the right to discontinue activities with respect to such Target and to propose in writing, after discussion with Array, two (2) molecular targets as potential substitutes for such discontinued Target that are (i) [ * ]** , and (ii) are not the subject of an agreement that Array has with a Third Party or the target of Array’s own research or drugs in Array’s clinical development pipeline or marketed product portfolio; provided that Celgene may only exercise such right with respect to the four (4) initial Targets or with respect to any Target substituted for an initial Target pursuant to Section 3.2.2, but not with respect to any substitute Target selected pursuant to this Section 3.5.1; and provided further that Celgene may only propose as a potential substitute a molecular target directed to the same general disease area (specifically, cancer or inflammatory disease) as the discontinued Target. Array shall notify Celgene in writing which of the proposed substitute targets it selects for inclusion in the Discovery Program. In such case, the discontinued Target shall cease to be a Target, the substitute target shall be deemed a Target for the purposes of this Agreement, Schedule 1.38 shall be deemed to be updated accordingly, and the Option Term for the substitute Target shall commence on the date Celgene receives notice of

Array’s selection ( i.e. , such date shall be deemed the Effective Date for such Target for purposes of Section 4.1.1(a)).

3.5.2 Development Compounds . Based upon the Clinical Candidate Guidelines and the results of the Discovery Program **[ * ] , Celgene shall designate for each Target one (1) Compound as a Development Compound from [ * ] , and each such Compound so designated shall be deemed a “ Development Compound ” for the purposes of this Agreement. Based on [ * ]** , Celgene may, within forty-five (45) days of receipt thereof, de-select a particular Development Compound and select an alternate Lead Compound as a Development Compound. In such case, the de-selected Compound shall cease to be a Development Compound for the purposes of this Agreement, but shall continue to be a Lead Compound and may be selected by Celgene as a Development Back-Up Compound.

3.5.3 Development Back-up Compounds . At such time as Celgene designates a Development Compound for a particular Target, Celgene shall, based upon the Clinical Candidate Guidelines and the results of the Discovery Program including the results of the Acute Tox Studies, designate for such Target up to two (2) Lead Compounds as Development Back-Up Compounds. Each such Back-up Compound so designated shall be deemed a “ Development Back-Up Compound ” for the purposes of this Agreement.

3.6 Development Plan .

3.6.1 Establishment . The JDC, for a particular Development Compound and, if required pursuant to 3.7.4 below, a corresponding Development Back-Up Compound, shall have the responsibility for establishing a comprehensive, multi-year plan for the development of such Development Compound and, if applicable, Development Back-Up Compound (a “ Development Plan ”). The initial Development Plan shall be finalized by the Parties within three (3) months after the designation of such Development Compound and corresponding Development Back-Up Compounds.

3.6.2 Contents . Each Development Plan shall fully describe the proposed activities related to ongoing preclinical studies ( e.g. , toxicology), formulation, clinical studies and regulatory plans, and other activities and timelines directed to IND filing, Phase I clinical development and preparation for Phase II clinical development and shall be in accordance with the Trial Design Guidelines. If the first IND for a particular Development Compound is to be filed in a division of the FDA other than the cancer division, the Development Plan shall also include a single Phase II clinical trial for the subject Development Compound and associated continuing development activities ( e.g. , continued and ongoing preclinical studies, formulation and process development). Where a Phase II trial is to be included, the Development Plan shall also include **[ * ]** such Phase II trial and continuing development activities.

3.6.3 Annual Review . After the establishment of the initial Development Plan for a Development Compound and, if applicable, a corresponding Development Back-Up Compound, the JDC shall review and update such Development Plan at least annually and prior to any material modification or addition thereto.

3.7 Development .

3.7.1 IND . During the Option Term following designation of a Development Compound, Array shall use Diligent Efforts to continue pre-clinical development of such Development Compound and, to the extent required pursuant to Section 3.7.4 below, a corresponding Development Back-Up Compound, with the goal of submitting an IND with the FDA on such Development Compound. Unless otherwise agreed by the Parties, such IND shall include those IND toxicology and ADME studies previously agreed by the Parties, and taking into account the Development Plan. Array shall not be required to submit more than one (1) IND for each Development Compound.

3.7.2 Phase I .

(a) After the date of the first filing of an IND with the FDA with respect to a Development Compound and prior to the earlier of (i) the date of Celgene’s exercise of the Celgene

Product Option with respect to such Development Compound (or termination of the Celgene Product Option with respect to the Target to which such Development Compound is directed) and (ii) the expiration of the Option Term, Array shall use Diligent Efforts to conduct and manage a Phase I clinical trial of such Development Compound in accordance with the Development Plan for such Development Compound and to perform additional development activities to prepare for later stage clinical development (e.g., ongoing toxicity studies and CMC-related activities). Array shall not be required (i) to conduct a Phase I clinical trial exceeding the Trial Design Guidelines, or (ii) to conduct more than one (1) Phase I clinical trial for each Development Compound.

(b) Array shall be responsible for all costs incurred by Array, its Affiliates or subcontractors in performing its activities under this Section 3.7.2, including the following: (i) out-of-pocket costs paid to Third Parties (such as contract research organizations, testing labs, imaging labs, quality assurance auditors or groups for trial sites or vendors, or other contractors) for the performance of such activities; (ii) Array FTEs overseeing the activities set forth in (i) above; (iii) Array’s out-of-pocket costs for obtaining or manufacturing quantities of the Development Compound used as clinical supplies (including stability testing, form selection and testing, and radiolabelled derivative preparation) in performing such activities; and (iv) costs incurred with respect to meeting of investigators and associated travel expenses.

3.7.3 Phase II .

(a) If the first IND for a particular Development Compound was filed in a division of the FDA other than the cancer division and Celgene has not exercised the Celgene Product Option with respect to such Development Compound (or terminated the Celgene Product Option with respect to the Target to which such Development Compound is directed), then Array shall use Diligent Efforts during the Option Term to conduct and manage one Phase II clinical trial of such Development Compound and to perform additional development activities to prepare for further clinical development, in accordance with the Development Plan for such Development Compound. Array shall not be required (i) to conduct a Phase II clinical trial exceeding the Trial

Design Guidelines, or (ii) except as provided in subparagraph (c) below, to conduct more than two (2) Phase II clinical trials under this Agreement.

(b) For the first two (2) Development Compounds for which Array is obligated to conduct a Phase II clinical trial pursuant to Section 3.7.3(a) or (c), Array shall be responsible for **[ * ] in performing the studies and/or activities described in paragraph (a) above with respect to each applicable Development Compound, and Celgene shall [ * ] . If Array is obligated to conduct a third Phase II clinical trial pursuant to Section 3.7.3(a) or (c), Celgene shall [ * ] . Celgene shall [ * ] . Upon request, Array shall provide Celgene with [ * ] . Prior to commencing a Phase II trial for which Celgene [ * ] , Array shall provide Celgene [ * ] ; such [ * ]** shall be revised or updated from time to time by the JDC.

(c) If the Parties selected inflammation as the general disease area for the IND for a Development Compound directed to a cancer/inflammation Target under Section 2.1.1(a)(iv) above, and Celgene has not exercised the Celgene Product Option with respect to such Development Compound (or terminated the Celgene Product Option with respect to the Target to which such Development Compound is directed), then Array shall use Diligent Efforts during the Option Term to conduct and manage one Phase II clinical trial of such Development Compound, in accordance with the Development Plan for such Development Compound and within the Trial Design Guidelines.

(d) “ **[ * ] ” shall mean [ * ]** .

3.7.4 Development Back-Up Compounds .

(a) IND-Enabling Studies . At the request of Celgene, Array shall use Diligent Efforts to perform continued IND-Enabling Studies for one (1) Development Back-Up Compound per Target during the Option Term for such Target. For purposes of this Section 3.7.4, “ IND-Enabling Studies ” shall mean studies which are specifically required for an IND filing with the FDA, including without limitation, ADME and GLP toxicology studies, or studies required for the preparation of the CMC section of such IND including studies relating to analytical methods and

purity analysis, and formulation and manufacturing development studies, all as necessary to obtain the permission of regulatory authorities to begin human clinical testing.

(b) Phase I . Upon mutual written agreement, prior to the earlier of (i) the date of Celgene’s exercise of the Celgene Product Option with respect to the Development Compound for the Target to which such Development Back-Up Compound is directed (or termination of the Celgene Product Option with respect to the Target to which such Development Back-Up Compound is directed) and (ii) the expiration of the Option Term, Array shall use Diligent Efforts to prepare and submit an IND with the FDA and to conduct and manage a Phase I clinical trial for any Development Back-Up Compound for which Array conducted IND-Enabling Studies, all in accordance with the Development Plan for such Development Back-Up Compound; provided that such Phase I trial shall be for the same indication as the corresponding Development Compound and shall not exceed the Trial Design Guidelines. If the Parties do not agree, Celgene shall have the right **[ * ] to perform, or have performed on its behalf, the activities described in this Section 3.7.4(b) with respect to such Development Back-Up Compound under the Discovery Program pursuant to a Development Plan; provided that (a) such activities can and shall be completed prior to expiration of the Option Term or extensions thereof for the Target to which such Development Back-Up Compound is directed, (b) Celgene shall share all clinical trial data with Array, and (c) at the conclusion of such activities, unless Celgene exercises the Celgene Product Option with respect to such Target, Celgene shall (1) at Array’s option, close or inactivate its IND for such Development Back-Up Compound or transfer such IND to Array [ * ]** , and (2) shall reasonably cooperate with Array to promptly, and in any event within thirty (30) days of Array’s written request, provide Array with all Collaboration Technology and Information generated in the course of such activities.

(c) Budget and Reimbursement . Array shall provide Celgene with a proposed budget outlining anticipated Back-Up Development Costs for each Development Back-Up Compound for which Array is performing activities under this Section 3.7.4, which budget shall be revised or updated from time to time by the JDC. Celgene shall reimburse Array **[ * ]** , for all Back-Up Development Costs incurred under Sections 3.7.4(a) and/or (b) above with respect to such

Development Back-Up Compound, and, upon request, Array shall provide Celgene with reasonably detailed documentation thereof.

(d) Substitution of Development Compounds . From time to time during the Option Term, Celgene may determine in good faith that a Development Plan has not yielded sufficient progress with respect the applicable Development Compound, and that development activities with respect to such Development Compound should be discontinued. If such development activities are discontinued with respect to any Development Compound, then Celgene may propose, after discussion with the JDC, a Development Back-Up Compound corresponding to such Development Compound as a substitute Development Compound. In such case, the discontinued Development Compound shall cease to be a Development Compound, the proposed Development Back-Up Compound shall be deemed a Development Compound, and the discontinued Development Compound shall be deemed a Development Back-Up Compound to such substitute Development Compound. Celgene shall **[ * ] of a Development Back-Up Compound that is selected as a substitute for the corresponding Development Compound [ * ] in the development of the substituted Development Compound, [ * ]** .

(e) “ Back-Up Development Costs ” shall mean the following costs incurred by Array, its Affiliates or subcontractors in performing IND-Enabling Studies pursuant to Section 3.7.4(a) or activities under the applicable Development Plan pursuant to Section 3.7.4(b), as applicable, including the following: (i) Array FTEs engaged in IND drafting, preparation and submission; (ii) out-of-pocket costs paid to Third Parties (such as contract research organizations, testing labs, imaging labs, quality assurance auditors or groups for trial sites or vendors, or other contractors) for the performance of such activities on a pass-through basis; (iii) Array FTEs planning, performing or overseeing the activities under Section 3.7.4(a) or (b), as applicable at a rate of $325,000 per FTE; (iv) Array’s actual costs for obtaining or manufacturing reasonable quantities of the Development Compound for use as clinical supplies (such as stability testing) in performing Array’s obligations under Sections 3.7.4(a) and 3.7.4(b) above; and (v) costs incurred with respect to meeting of investigators (single site, regional and global) and associated travel expenses.

3.7.5 Manufacturing . Array shall be responsible, either itself or through Third Parties, for the manufacture and supply of each Development Compound and, if required pursuant to Section 3.7.4 above, corresponding Development Back-Up Compounds, as necessary to conduct its activities under the Discovery Program. All such manufacturing and supply activities shall be in accordance with the manufacturing guidelines previously agreed by the Parties.

3.8 Records .

3.8.1 Retention . Array shall maintain, or cause to be maintained records of all (a) activities conducted under the Discovery Program, (b) **[ * ] , (c) Back-Up Development Costs, and (d) all [ * ]** , in each case in sufficient detail and, as applicable, in a scientific manner as will properly reflect all work done and results achieved in the performance of the Discovery Program and which are otherwise sufficient to determine the identity and inventorship dates of inventions. Array shall retain such records during the Option Term and for a period of five (5) years thereafter, or such other period agreed by the Parties.

3.8.2 Inspection . During the Option Term and for a period of **[ * ] thereafter, Array shall make available to Celgene, as reasonably requested and upon reasonable notice, during Array’s normal business hours, such records as may be reasonably necessary for Celgene: (a) to inquire about details of the results generated under the Discovery Program (both discovery research and support for clinical development); (b) to supplement the reports furnished by Array pursuant to Section 3.8.1 above; and/or (c) [ * ] , Back-Up Development Costs and [ * ]** . Such disclosures shall occur no more than once every six (6) months during the Option Term and shall be pursuant to reasonable procedures to protect the confidentiality of such records. Upon the expiration of the period for record retention specified in Section 3.8.1 above and upon request by Celgene, Array shall provide to Celgene, at Celgene’s expense, copies of such records associated with any Collaboration Compound or Collaboration Back-Up Compound for retention in Celgene’s archives, it being understood that such records shall remain subject to the confidentiality obligations in Article 10.

ARTICLE IV
CELGENE PRODUCT OPTION

4.1 Celgene Product Option . Celgene shall have the option to select one (1) Development Compound, along with corresponding Development Back-Up Compounds, each for up to two (2) Targets to acquire an exclusive, worldwide license to develop and commercialize such Development Compound and Development Back-Up Compounds (the “ Celgene Product Option ”), all in accordance with the terms and conditions set forth in this Article 4.

4.1.1 Exercise .

(a) Option Term . Unless earlier partially terminated with respect to a particular Target as provided in Section 6.2.1, Celgene may exercise the Celgene Product Option with respect to a particular Development Compound and its corresponding Development Back-Up Compounds, at any time before the earliest of: (a) for Development Compounds with respect to which the first IND was filed in the cancer division of the FDA, **[ * ]** ; and (b) for Development Compounds with respect to which the first IND was filed in a division of the FDA other than the cancer division, [ * and (c) the **[ * ] of the Effective Date (the “ Option Term ”); provided that the Option Term shall terminate upon: (i) an earlier termination of this Agreement in accordance with Article 12; or (ii) the date on which Celgene has exercised the Celgene Product Option with respect to two (2) Development Compounds. Celgene may extend the Option Term set forth in (c) of this subsection for up to [ * ] upon written notice to Array, such notice to be provided no earlier than one hundred eighty (180) days prior to the [ * ] anniversary of the Effective Date or the end of the then-current Option Term, as applicable. The Parties may further extend the Option Term set forth in (c) of this subsection for up to [ * ] , commencing immediately after expiration of the [ * ] exercised by Celgene, by mutual written agreement; provided, however, that if Array does not agree to so extend the Option Term, [ * ]** . As used in this Section 4.1.1, (1) the “ completion of the first Phase I clinical trial ” shall be deemed to have occurred (A) upon the later of (1) receipt of clearance from the FDA to commence Phase II clinical trials with respect to the relevant Development Compound, whether by affirmative communication from the FDA or the passage of the time period for placing such

Phase II clinical trial on hold, or (2) sixty (60) days after Array delivers to Celgene a draft clinical trial report containing all tables and graphs related to the key endpoints for the subject clinical trial as defined in the protocol for such clinical trial, which report shall be based on trial data obtained as of the date all trial subjects have completed the trial (on a last patient, last visit basis pursuant to the protocol for such clinical trial) or the date on which the last trial subject has received the relevant Development Compound for a period of four (4) months (or such other mutually agreed time period), whichever is earlier, and (B) after receipt by Celgene of reasonable supporting Information requested by Celgene and held by Array with respect to the subject clinical trial of the relevant Development Compound; and (2) the “ completion of the first Phase II clinical trial ” shall be deemed to have occurred sixty (60) days after (A) Array delivers to Celgene a draft clinical trial report containing all tables and graphs related to the key endpoints for the subject clinical trial as defined in the protocol for such clinical trial, and (B) after receipt by Celgene of reasonable supporting Information requested by Celgene and held by Array with respect to the subject clinical trial of the relevant Development Compound.

(b) Exercise . To exercise the Celgene Product Option with respect to a particular Development Compound, Celgene shall so notify Array in writing at any time during the Option Term. Upon receipt by Array of such notice, the subject Development Compound and its corresponding two (2) Development Back-Up Compounds shall cease to be a Development Compound or Development Back-Up Compounds, respectively, and shall thereafter be deemed a Collaboration Compound or Collaboration Back-Up Compounds, respectively.

(c) Transition . Subject to paragraph (a) above, and incident to the extent reasonably necessary for Celgene to perform activities assigned to it under the Development Plan approved by the JDC:

(i) From and after the time that Celgene exercises the Celgene Product Option with respect to a Development Compound (which will then become a Collaboration Compound), Array shall cooperate fully with Celgene to promptly, and in any event within thirty (30) days of Celgene’s written request, provide Celgene with all Collaboration Technology and

Array Technology and Information to which Celgene has a right or license under this Agreement and which is necessary for Celgene to perform such activities. Such cooperation shall include the reasonable disclosure of all Information (including, study protocols, study results, analytica l methodologies, product manufacturing processes, batch records, vendor information, validation documentation, regulatory documentation, patent information), regulatory filings, information related to regulatory information and filings, pre-clinical and clinical data, adverse event data, regulatory correspondence, expert opinions, analyses, manufacturing data, manufacturing and supply agreements, and the like, all to the extent that such material is not in the possession of Celgene, and such other disclosures and transfers as are reasonably necessary or useful for Celgene to exercise its rights and perform such activities with respect to such Collaboration Compound and corresponding Collaboration Back-Up Compounds. Notwithstanding the foregoing, Array shall not be considered to be in breach of this Section 4.1.1(c) for failure to disclose information, if, despite commercially reasonable efforts, Array cannot identify such information. Without limiting the foregoing, Array shall use commercially reasonable efforts to ensure orderly transition and uninterrupted research and development of Collaboration Compounds, and if applicable, corresponding Collaboration Back-Up Compounds, under this Section 4.1.1.

(ii) In addition, the JDC shall meet and discuss how best to transition the manufacture of such Collaboration Compound and, if applicable, Collaboration Back-Up Compounds to Celgene (or its designee) and shall establish a supply transition plan with respect to such Collaboration Compound and Collaboration Back-Up Compounds. Array shall cooperate fully to transition to Celgene all manufacturing activities related to the Collaboration Compound and its corresponding Collaboration Back-Up Compounds as reflected in the Development Plan and supply transition plan approved by the JDC. Celgene, at its option, may purchase from Array any surplus quantities of GMP Collaboration Compound and Collaboration Back-Up Compounds **[ * ]** .

(iii) Array shall provide Celgene with a proposed budget outlining anticipated costs incurred by Array, its Affiliates or subcontractors in performing those additional development activities (e.g., preclinical studies and CMC-related activities, including formulation and process development, together with associated regulatory activities, and in each case relating

directly to the Development Compound) not directly attributable to the ongoing conduct of clinical trials that Array performed in accordance with the Development Plan during the last clinical trial of a Collaboration Compound or Collaboration Back-Up Compound conducted prior to Celgene’s exercise of the Celgene Product Option in respect of such Collaboration Compound or Collaboration Back-Up Compound, which budget shall be revised or updated from time to time, provided that any **[ * ] above the original budget submitted by Array shall [ * ] . Array shall submit an itemized invoice to Celgene outlining such costs, and, upon request, Array shall provide Celgene with reasonably detailed documentation thereof. Such costs described in the preceding sentence shall be calculated as follows: (a) for Array FTEs performing such activities, [ * ] ; (b) [ * ] costs paid to Third Parties for the performance of such activities [ * ] ; and (c) Array’s [ * ] for obtaining or manufacturing reasonable quantities of the Development Compound or Development Back-up Compound used as in performing such activities. Celgene shall pay any invoice issued under this Section 4.1.1(c)(iii) [ * ] , provided, however, that Celgene shall not be obligated to pay any amounts [ * ] submitted by Array if Celgene [ * ]** . For the avoidance of doubt, Celgene shall not be obligated to reimburse Array for any such costs with respect to any Development Compound or Development Back-Up Compound on which Celgene does not exercise the Celgene Product Option.

4.1.2 Termination . In the event that Celgene fails to exercise its Celgene Product Option with respect to a particular Development Compound, in accordance with Section 4.1.1 above, then the Celgene Product Option, and all of Array’s obligations under Article 3 and this Section 4.1 with respect to such Development Compound and corresponding Development Back-Up Compounds, as well as with respect to any and all Compounds for the same Target, shall terminate. Array shall thereafter be free to develop such Compounds, Development Compounds, Back-Up Compounds and other compounds that modulate the activity of such Targets outside the collaboration, alone or in connection with Third Parties, in each case subject to the license grant set forth in Section 5.3.

4.2 Development . Following the exercise of the Celgene Product Option with respect to a Development Compound and corresponding Development Back-Up Compounds, and the designation of such Compounds as a Collaboration Compound and Collaboration Back-Up

Compounds, respectively, Array shall, at Celgene’s option and sole discretion, close or inactivate its IND(s) for such Collaboration Compound and, if applicable, Collaboration Back-Up Compounds, or transfer such IND(s) to Celgene at Celgene’s expense; and Array shall complete all relevant clinical trial and IND administrative activities and shall share all clinical trial data with Celgene. Celgene shall be responsible, at its expense, for the preparation and filing of all subsequent INDs with respect to any subsequent clinical development for such Collaboration Compound or Collaboration Back-Up Compounds. Array shall also provide to Celgene in support of any Celgene IND filings all relevant non-clinical data, including CMC, pharmacology and toxicology generated by Array with respect to such Collaboration Compound and Collaboration Back-Up Compounds.

4.3 Manufacturing . Celgene shall have the right and responsibility to arrange for manufacturing of the Collaboration Compounds, Collaboration Back-Up Compounds and Licensed Products, including both clinical materials and commercial product, consistent with Celgene’s reasonable internal practices and industry standards. Celgene shall make reasonable commercial efforts to ensure adequate manufacturing capacity to meet forecast demand for Collaboration Compounds, Collaboration Back-Up Compounds and Licensed Products, as applicable, including, if deemed necessary by Celgene, the establishment of an alternative supply source. Celgene shall also make reasonable commercial efforts to e

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