THIS COLLABORATION AND LICENSE AGREEMENT (the “Agreement”) is entered into as of the “Effective Date” (as hereinafter defined) by and between BYK GULDEN LOMBERG CHEMISCHE FABRIK GMBH, with offices at Byk-Gulden-Strasse 2, D-78467 Konstanz, Germany (“BG”) and GPC BIOTECH AG, with offices at Fraunhoferstrasse 20, D-82152 Martinsried/Munich, Germany (“GPC”). Each of BG and GPC may be referred to herein as a “Party,” or, collectively, as the “Parties.”

RECITALS

WHEREAS, GPC owns rights to certain know how, trade secrets, patents and patent applications relating to genomic and proteomic technology (as further defined herein, “GPC Platform”);

WHEREAS, BG is interested in establishing, through its Affiliate, Altana Inc. (“Altana”), a genomics and proteomic facility (the “Genomics Center”) with a broad technology platform developed by BG and/or licensed from Third Parties which technology platform shall include specific elements of technology owned by GPC as further defined herein (the GPC technology is defined herein as “GPC Platform” and “Platform Improvements”);

WHEREAS, GPC is willing to grant certain rights to the GPC Platform and certain other technology to BG and to assist BG in establishing the Genomics Center on the terms set forth herein;

WHEREAS, GPC and BG desire to enter into target discovery collaborations (the “Collaborations”) using the GPC Platform (as defined herein) under which GPC and BG will identify and validate targets and BG will obtain rights to commercialize Products (as defined herein) directed to or based on such targets; and

WHEREAS, concurrently with the execution of this Agreement, GPC, through its Affiliate, GPC Biotech, Inc., and BG, through Altana, have entered into a sublease regarding space leased by GPC at 610 Lincoln Street, Waltham, Massachusetts (the “Sublease”) and a Services Agreement pursuant to which GPC, through its Affiliate, GPC Biotech, Inc., will provide certain services to BG and/or to Altana in connection with the establishment of the Genomics Center (the “Services Agreement,” and together with the Sublease, the “Ancillary Agreements”).

NOW, THEREFORE, in consideration of the foregoing and the covenants and promises contained in this Agreement, the Parties agree as follows:

ARTICLE 1

Definitions

As used throughout this Agreement, the following capitalized terms shall have the meanings ascribed to them below:

1.1. “Accepted Target” shall mean a Catalogue Target that has been selected by BG pursuant to Section 2.9.6 and to which Section 2.9.7 shall not apply.

1.2. “Affiliate” shall mean any company or entity controlled by, controlling or under common control with a Party hereto, whereby the term control shall include without limitation the owning of fifty percent (50%) or more of any company’s voting stock or participating profit interest or having the power to directly or indirectly direct the management or determine the policies of an entity.

1.3. “BG Compound” shall mean a compound that, at the time of determination of whether such compound is a BG compound, meets any one of the following criteria: (i) is a BG R&D Compound, (ii) BG is selling commercially to Third Parties, (iii) BG has filed a patent application containing claims covering the composition of matter of such compound or such a patent has issued to BG, or (iv) is owned by or exclusively licensed to BG other than pursuant to this Agreement. For the avoidance of doubt, the phrase “at the time of determination” shall mean at the time of the achievement of a relevant milestone, for purposes of Section 6.1.7, and at the time ownership is being determined, for purposes of Section 11.1.

1.4. “BG Intellectual Property” shall mean the patent rights, know-how, trade secret rights, proprietary materials and other intellectual property rights, exclusive of Joint Inventions and Collaboration Patents, Controlled by BG and relating to any Target, Catalogue Target, Accepted Target, Viable Target, Project Candidate and/or Product.

1.5. “BG Invention” shall mean any invention, development, discovery, method, process, Information or other know-how that is conceived, discovered, identified or first reduced to practice by BG in the conduct of research as part of the Collaboration under the Agreement (other than a Platform Improvement).

1.6. “BG Non-Program Invention” shall mean any invention, development, discovery, method, process, Information or other know-how that is conceived, discovered, identified or first reduced to practice by BG in the conduct of research other than as part of the Collaboration (other than a Platform Improvement).

1.7. “BG Platform Improvement” shall mean an improvement or modification to the GPC Platform which is conceived, discovered, identified or first reduced to practice during the Establishment Term by BG alone or with a Third Party or jointly by BG and GPC and, in either case, is Controlled by BG.

1.8. “BG R&D Compound” shall mean a compound that BG has in lead generation (after hit evaluation) or lead optimization programs or that BG has nominated as a clinical development candidate prior to the use by BG of any Licensed Patents or Collaboration Technology with respect to such compound.

1.9. “BG Target” shall mean a target that, at the time of determination of whether such target is a BG Target, meets any one of the following criteria: (i) is a BG Validated Target, (ii) BG has filed a patent application containing claims covering such target or such a patent has issued to BG, or (iii) is owned by or exclusively licensed to BG other than pursuant to this Agreement. For the avoidance of doubt, the phrase “at the time of determination” shall mean at

the time of an achievement of a relevant milestone, for purposes of Section 6.1.7, and at the time of ownership is being determined, for purposes of Section 11.1.

1.10. “BG Third Party Technology Improvement” shall mean an improvement or modification to the Third Party Technology which is conceived, discovered, identified or first reduced to practice during the Establishment Term by BG alone or with a Third Party or jointly by BG and GPC and, in either case, is Controlled by BG.

1.11. “BG Validated Target” shall mean a target that BG has in an internal research and development program and that BG has validated or that is under validation in an in-vitro or in-vivo model systems prior to the use by BG of any Licensed Patents or Collaboration Technology with respect to such target.

1.12. “Cancer” shall mean the process of invasive tumor cell growth that occurs as a result of genetic mutations that initiate and promote irreversible cellular events.

1.13. “Catalogue Target” shall mean a Target that meets the Designation Criteria as determined pursuant to Section 1.22 and 2.9.4 hereof.

1.14. “Claim” shall mean any and all liabilities, damages, losses, settlements, claims, actions, suits, penalties, fines, costs or expenses (including, without limitation, reasonable attorneys’ fees).

1.15. “Collaboration” shall mean the programs of research and testing consisting of the *** Research Program and the *** Research Program under the Research Plan and under any Optional Platform Technologies with the goal of discovering and validating Targets in the Field.

1.16. “Collaboration Patents” shall mean and collectively includes United States and foreign patent applications, provisional patent applications, patents, certificates of invention and applications for certificates of invention, reissues, extensions, renewals, substitutions, supplementary protection certificates, additions, continuations, divisions and continuations-in-part that claim Joint Inventions.

1.17. “Collaboration Technology” shall mean all GPC Inventions related to Catalogue Targets and Accepted Targets and uses thereof and Joint Inventions related to Catalogue Targets and Accepted Targets and uses thereof.

1.18. “Collaboration Term” shall have the meaning set forth in Section 2.8.1 hereof.

1.19. “Commercially Reasonable Efforts” shall mean efforts and resources commensurate with the efforts and resources in research and development used by a reasonable party for projects of commensurate economic value in consideration of the continuing progress and state of scientific knowledge and in consideration of reasonably available resources, at the time.

1.20. “Contract Year” shall mean each 12-month period ending on the first anniversary of the Effective Date and each anniversary thereafter.

***	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

1.21. “Confidential Information” shall have the meaning set forth in Section 10.1 hereof.

1.22. “Control” shall mean, with respect to a material, Information or intellectual property right, possession (by ownership or exclusive license) by a Party of the ability to grant the other Party access to or a license or sublicense as provided for herein under such material, Information or intellectual property right without violating the terms of any bona fide agreement or other arrangements with any Third Party existing at the time such Party would be first required hereunder to grant the other Party such access or license or sublicense.

1.23. “Designation Criteria” shall mean the in-vitro and/or in-vivo validation of a Target in a in vitro and/or in a in-vivo model system agreed on by the Collaboration Committee on a case by case basis.

1.24. “Dollar” and “$” shall mean United States dollars.

1.25. “EMEA” shall mean the European Medicines Evaluation Agency and any successor thereto.

1.26. “Effective Date” shall mean November 1, 2001.

1.27. “Establishment Term” shall mean the sixty-eight (68) month period beginning on the Effective Date.

1.28. “Evaluation Period” shall have the meaning set forth in Section 2.9.6 hereof.

1.29. “FDA” shall mean the United States Food and Drug Administration and any successor thereto.

1.30. “Field” shall mean, except as set forth in Exhibit G, those therapeutic areas that are the subject of all current and future internal BG pharmaceutical research and development programs.

1.31. “First Commercial Sale” shall mean the first sale or other disposition for value of a Product, in a final dosage form packaged for the ultimate consumer, to an independent Third Party following Regulatory Approval, by BG, its Affiliates or a sublicensee of BG.

1.32. “Force Majeure” shall mean any act of God, any accident, explosion, fire, storm, earthquake, flood, drought, peril of the sea, riot, embargo, war or foreign, federal, state or municipal order of general application, seizure, requisition or allocation, any failure or delay of transportation, shortage of or inability to obtain supplies, equipment, fuel or labor or any other circumstances or event beyond the reasonable control of the Party relying upon such circumstance or event to excuse its non-performance.

1.33. “FTE” shall mean the equivalent of a full-time employee or consultant based on at least forty-six (46) weeks per year of work less public holidays carried out by one or more employees or consultants of GPC, each of whom devotes a portion of his or her time to scientific work on or directly related to the Collaboration and having a qualification which is reasonably

sufficient and adequate in view of the tasks to be performed; provided, however, that BG understands and agrees that GPC retains complete discretion to change the identity, the frequency and time which any individual employee devotes to the Collaboration. Work on or directly related to the Collaboration to be performed by GPC employees or consultants can include, but is not limited to, experimental laboratory work, recording and writing up results, reviewing literature and references, attending selected and appropriate seminars and symposiums, managing and leading scientific staff, and carrying out Collaboration management duties (including service on a Steering Committee).

1.34. “Genomics Center” shall mean the U.S. genomics and proteomics research center based, initially, on the GPC Platform and located initially at GPC’s facility in Waltham, Massachusetts pursuant to the Sublease.

1.35. “GPC Elected Target” shall have the meaning set forth in Section 2.9.7 hereof.

1.36. “GPC Invention” shall mean any invention, development, discovery, method, process, Information or other know-how that is conceived, discovered, identified or first reduced to practice by GPC in the conduct of research as part of the Collaboration under the Agreement (other than a Platform Improvement or Third Party Technology Improvement).

1.37. “GPC Patents” shall mean and collectively includes all United States and foreign patent applications, provisional patent applications, patents, certificates of invention and applications for certificates of invention, reissues, extensions, renewals, substitutions, supplementary protection certificates, additions, continuations, divisions and continuations-in-part (but only to the extent that claims in such continuations-in-part are entitled to the priority date of the parent patent application and cover the same subject matter as claimed in the parent patent application) that claim GPC Inventions.

1.38. “GPC Platform” shall mean any genomic and proteomic technology owned by GPC as of the Effective Date, and described on Exhibit A hereto, including all Information and protocols owned by GPC and required to practice such technology.

1.39. “GPC Platform Improvement” shall mean an improvement or modification to the GPC Platform which is conceived, discovered, identified or first reduced to practice during the Establishment Term by GPC alone or with a Third Party and is Controlled by GPC.

1.40. “GPC Third Party Technology Improvement” shall mean an improvement or modification to the Third Party Technology which is conceived, discovered, identified or first reduced to practice during the Establishment Term by GPC alone or with a Third Party and is Controlled by GPC.

1.41. “Gross Sales” means the gross amount invoiced on sales to independent Third Parties of a Product by BG, its Affiliates and/or sublicensees.

1.42. “Information” shall mean information and data of any type and in any tangible or intangible form, including without limitation inventions, practices, methods, techniques, specifications, formulations, formulae, knowledge, know-how, skill, experience, test data including pharmacological, biological, chemical, biochemical, toxicological and clinical test

data, analytical and quality control data, stability data, results of studies and patent and other legal information or descriptions.

1.43. “Joint Invention” shall mean any invention, development, discovery, method, process, Information or other know-how that is conceived, discovered, identified or first reduced to practice by the Parties jointly in the conduct of research as part of the Collaboration under the Agreement (other than a Platform Improvement).

1.44. “*** Research Program” shall mean a research program for the functional analysis of *** family members and determination of their role in the *** for the development of novel drug discovery programs. The *** Research Program may cover, after evaluation of other applications, the use of the technologies used in such program in other areas of the Field.

1.45. “Licensed Patents” shall mean any (i) GPC Patents that claim any Catalogue Target or Accepted Target or any use thereof and (ii) Collaboration Patents that claim any Catalogue Target or Accepted Target or any use thereof.

1.46. “MAA” shall mean a Marketing Authorization Application or similar application filed with the EMEA after completion of human clinical trials to obtain marketing approval for a Product in the European Union.

1.47. “MHW” shall mean the Ministry of Health and Welfare in Japan and any successor agency.

1.48. “NDA” shall mean a New Drug Application, or other application for the approval to market a Product, which is submitted to the FDA.

1.49. “Net Sales” shall mean the total amount received by BG or its sublicensees on account of the sale of a Product to a non-Affiliate whether invoiced or not, less the following deductions incurred based upon the sale of such Product: (a) value added tax, sales and other excise taxes, cost of nationalization (custom duties related to importation including handling fees) and (b) a lump sum deduction of *** percent (***%) of Gross Sales to cover all other deductions, including, without limitation, customary cash discounts, trade discounts, quantity discounts, allowances or credits to Third Party customers on account of settlement of complaints, rejections, recalls, allowances or returns. Should BG demonstrate to GPC’s reasonable satisfaction that the actual amounts referred to under (a) and (b) above exceed in a country *** percent (*** of Product in such country, then BG shall be entitled to deduct from BG’s Gross Sales such actual amounts in determining its Net Sales with respect to such country.

No deductions shall be made for commissions paid to individuals whether they be with independent sales agencies or regularly employed by such seller and on its payroll, or for the cost of collections.

***	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Transfer between BG and any of its Affiliates for resale shall not be considered a sale, and in such case, Net Sales shall be based on the Gross Sales for the Products received by the Affiliate who sells to a Third Party, less those deductions set forth above.

In the event that a Product is sold as part of a Combination Product as defined below, the Net Sales from the Combination Product, for the purpose of determining the royalty amount payable by BG to GPC, shall be determined by multiplying the Net Sales of the Combination Product during the Accounting Period applicable under Section 6.2.1 by the fraction, A/A+B where A is the average sales price of the Product when sold separately in finished form and B is the average sales price of the other Product(s) included in the Combination Product, when sold separately in finished form, in each case during the applicable reporting period or, if sales of both the Product and the other Product(s) did not occur in such period, then in the most recent royalty reporting period in which sales of both occurred. In the event that such average sales price cannot be determined for both the Product and all other Product(s) included in the Combination Product, Net Sales for the purposes of determining Royalty payments shall be calculated by multiplying the Net Sales of the Product by the fraction C/C+D where C is the fair market value of the Product and D is the fair market value of all other Product(s) included in the Combination Product. As used above, the term “Combination Product” means any therapeutic product which comprises a Product and other active compounds and/or ingredients. Notwithstanding the foregoing, Net Sales from a Combination Product shall not be reduced below a level that results in an effective royalty rate pursuant to Section 6.2 hereof of less than *** of sales of such Combination Product, as determined pursuant to the first paragraph of this Section.

1.50. “Option” shall have the meaning set forth in Section 2.3.

1.51. “Option Notice” shall have the meaning set forth in Section 2.3.

1.52. “Optional Platform Technologies” shall mean the technologies owned or Controlled by GPC described in Exhibit D hereto.

1.53. “***” shall mean a research program which consists of *** towards the validation/functional analysis of targets identified in the *** screening program (as defined in the Collaboration and License Agreement dated December 29, 2000) or any other targets selected by the Collaboration Committee.

1.54. “Phase I Clinical Trial” shall mean a clinical trial which is defined as “Phase I” in FDA regulations as amended from time to time, or any foreign equivalent thereof.

1.55. “Phase II Clinical Trial” shall mean a clinical trial which is defined as “Phase II” in FDA regulations as amended from time to time, or any foreign equivalent thereof.

1.56. “Phase III Clinical Trial” shall mean a clinical trial which is defined as “Phase III” in FDA regulations as amended from time to time, or any foreign equivalent thereof.

1.57. “Platform Improvements” shall mean the GPC Platform Improvements and the BG Platform Improvements.

***	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

1.58. “Product” shall mean any biotherapeutic, gene therapy or small molecule product (a) that is developed for commercial purposes by BG or its sublicensees as a result of using Collaboration Technology, a BG Invention or Licensed Patents or (b) that is covered by a Valid Claim of any Licensed Patents, or the manufacture, use or sale of which is covered by a Valid Claim of any Licensed Patents. Notwithstanding the foregoing, Products shall not include products which consist solely of BG R&D Compounds or are based solely on the use of BG Validated Targets.

1.59. “Primary Contact Person” shall have the meaning set forth in Section 2.7 hereof.

1.60. “Project Candidate” shall mean any substance or compound that is based on or directed to a Viable Target or Accepted Target or which results from the Reverse Genomics Research Program and which is selected by the BG preclinical research steering committee for development as a drug project or for which BG or Third Parties on BG’s behalf commence drug project development activities.

1.61. “Regulatory Approval” shall mean, with respect to a country, all approvals (including price and reimbursement approvals), licenses, registrations or authorizations based on determinations of quality, safety and efficacy of any federal, state or local regulatory agency, department, bureau or other government entity, necessary for the use, storage, import, transport and sale of a Product in such country.

1.62. “Research Milestones” shall have the meaning set forth in Section 6.1.5.

1.63. “Research Plan” shall mean the work plan for the research to be conducted by GPC under this Agreement, as amended from time to time as provided in Section 2.4. The initial Research Plan is as set forth in Exhibit B attached hereto, and any amendments thereto will be attached to Exhibit B.

1.64. “Research Year” shall mean each twelve (12) month period during the term of the Collaboration beginning on the Effective Date.

1.65. “Resource Plan” shall mean the schedule of FTEs as described in Exhibit E attached hereto to be provided by each of GPC and BG for the transfer of the GPC Platform to BG at the Genomics Center and the conduct of work by each of GPC and BG for the transfer of the GPC Platform under the Research Plan.

1.66. “Reverted Target” shall have the meaning set forth in Section 2.9.5 hereof.

1.67. “Steering Committees” shall mean the committees described in Section 2.5.1 hereof.

1.68. “Target” shall mean a gene and/or gene product that is identified prior to the second (2^nd) anniversary of the expiration of the Collaboration Term by GPC or by BG or its Affiliates in research that makes any direct or indirect use of any know-how, data, information, patent rights, results or other Information resulting from the Collaboration.

1.69. “Third Party” shall mean any individual or entity other than BG or GPC.

1.70. “Third Party Technology” shall mean those technologies Controlled by GPC as of the Effective Date and described in the agreements identified in Exhibit I.

1.71. “Third Party Technology Improvements” shall mean BG Third Party Technology Improvements and GPC Third Party Technology Improvements.

1.72. “Transfer Plan” shall mean the plan regarding the transfer of the GPC Platform and Third Party Technology and the milestones regarding the transfer of the GPC Platform attached hereto as Exhibit A.

1.73. “Viable Target” shall mean an Accepted Target with respect to which the Collaboration Committee determines there is a good scientific and economic rationale and a reasonable practical basis to pursue efforts which finally might result in the development of a Product pursuant to this Agreement.

1.74. “Valid Claim” shall mean an issued claim of an unexpired patent, or a claim of a pending patent application, owned or Controlled by a Party or its Affiliates which shall not have been withdrawn, canceled or disclaimed, or held invalid or unenforceable by a court of competent jurisdiction in an unappealed or unappealable decision.

ARTICLE 2

Establishment of Genomics Center and Conduct of Collaboration

2.1. Transfer of the GPC Platform, Platform Improvements, Third Party Technology and Third Party Technology Improvements. BG intends, through Altana, to establish a Genomics Center with a broad technology platform developed by BG and/or licensed from Third Parties, which technology platform shall include the GPC Platform, Platform Improvements, Third Party Technology and Third Party Technology Improvements. GPC shall support BG in the establishment of the Genomics Center as further set forth in this Agreement as well as the Ancillary Agreements. The transfer shall be executed during the Establishment Term, beginning with the transfer of the GPC Platform and Third Party Technology followed by a continuous transfer of the Platform Improvements and Third Party Technology Improvements. No later than seven (7) months following the Effective Date, GPC and BG shall commence the activities in connection with the transfer of the GPC Platform and Third Party Technology to BG as described on the Transfer Plan. During the Establishment Term, GPC and BG will provide the FTEs to transfer to BG the GPC Platform, the GPC Platform Improvements, the Third Party Technology and the Third Party Technology Improvements as described in the Resource Plan which requires the presence of a sufficient number of key personnel of GPC at the Genomics Center that have relevant experience with the GPC Platform.

2.2. Transfer of the Genomics Center. BG shall, upon six months’ written notice to GPC with effect as of the (i) termination of the Collaboration Term, or (ii) the first anniversary following such termination (the “Transfer Notice”), as specified by BG in the Transfer Notice, be entitled to transfer the Genomics Center to another location not more than thirty (30) miles from Waltham,

Massachusetts (the “Transfer”) in which case GPC agrees to reasonably assist BG to transfer the GPC Platform, Platform Improvements, Third Party Technology and Third Party Technology Improvements, including GPC FTEs working at the Genomics Center, to such new location, and will complete the transfer of the GPC Platform, Platform Improvements, Third Party Technology and Third Party Technology Improvements as set forth in the Transfer Plan and this Agreement at such new location; provided, however, that BG will reimburse GPC for all costs, expenses and losses incurred by GPC in connection with the Transfer. Promptly after receipt by GPC of such Transfer Notice, the Parties shall confer to determine the process to accomplish the Transfer and shall initiate the activities necessary for such Transfer; provided, however, that BG shall be entitled to withdraw such Transfer Notice by written notice to GPC at least one (1) month prior to the projected effective date of such Transfer if BG determines that such Transfer is not feasible based on the required deadlines and costs of such Transfer; provided further, however, that such withdrawal will not relieve BG of its obligations to reimburse GPC for any costs, expenses or losses incurred by GPC after receipt of the Transfer Notice in connection with the withdrawn Transfer.

2.3. Addition of Optional Platform Technologies. At any time, and from time to time, during the Establishment Term, BG may exercise an option (the “Option”) to enter into negotiation to obtain a non-exclusive license to any of the Optional Platform Technologies. BG may exercise the Option by providing written notice (the “Option Notice”) to GPC specifying which of the Optional Platform Technologies it desires to license. If GPC is not, at the time of receipt of the Option Notice, restricted from granting a non-exclusive license to the Optional Platform Technology specified in the Option Notice, GPC shall negotiate in good faith with BG, for a period of not less than 90 days, the terms of a non-exclusive license to the Optional Platform Technology specified in the Option Notice. If, at the end of such 90-day period, BG and GPC are, despite good faith efforts, unable to agree on the terms of such a non-exclusive license, then GPC shall be under no further obligation to grant to BG a license to the Optional Platform Technology specified in the Option Notice.

2.4. Overview of Collaboration. Under the Collaboration, GPC shall conduct two programs of research in the Field: (i) the *** Research Program, and (ii) the *** Research Program. The goal of these programs is the identification and validation of Targets which may be useful in developing Products. Such program of research is being performed with a view to secure, validate and support the transfer of the GPC Platform, the Platform Improvements, the Third Party Technology and the Third Party Technology Improvements to the Genomics Center. In addition, the projects of such programs shall reflect the focus of and prioritization within BG’s research programs. Such research will be conducted by GPC and BG using the GPC Platform, the GPC Platform Improvements, the Third Party Technology and the Third Party Technology Improvements (and Optional Platform Technologies, if any, licensed pursuant to Section 2.3) under the Research Plan attached hereto as Exhibit B, which describes possible projects within the programs. The Research Plan may be amended by the Joint Steering Committee as set forth in Section 2.5.2(a). BG is entitled to request reasonable adaptations or modifications of the Research Plan to meet changes and developments that will occur in research and changed requirements of BG deriving thereof. GPC shall not be obligated to use any other technology in the conduct of the Collaboration other than the GPC Platform, GPC Platform Improvements, Third Party Technology and Third Party Technology Improvements and any Optional Platform Technologies licensed pursuant to

***	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Section 2.3. GPC acknowledges that BG is and may continue to be involved in genomics and proteomic research outside of the Collaboration and may develop products as a result of such research which shall not be subject to the terms of this Agreement. GPC also acknowledges that BG may use additional technology platforms established in its own research facilities and/or technologies provided by Third Parties and to be transferred to the Genomics Center and/or outsourcing of working programs to Third Parties for the validation of targets.

2.5. Steering Committees.

2.5.1 Formation, Composition and Term. BG and GPC shall establish a Joint Steering Committee which shall be responsible for the overall coordination and monitoring of the activities of the Genomics Center which relate to the Collaboration and the transfer of the GPC Platform, the Platform Improvements, the Third Party Technology and the Third Party Technology Improvements to the Genomics Center (the “Joint Steering Committee”). Due to the complexity of the Collaboration, the technology transfer and the related activities, the following additional sub-committees to the Joint Steering Committee shall be established: a “Transfer Committee” and a “Collaboration Committee.” The Joint Steering Committee and the Transfer Committee shall be active during the Establishment Term, the Collaboration Committee shall be active during the Collaboration Term and the two (2) year period immediately thereafter. The three (3) joint committees shall be comprised of three (3) named representatives of each of BG and GPC. Each Party will designate its representatives to the Joint Steering Committee within thirty (30) days after the Effective Date by written notice to the other Party. Each party will designate its representatives to the Transfer Committee and the Collaboration Committee within thirty (30) days after the date on which the transfer of the GPC Platform to the Genomics Center has commenced. The Collaboration Committee may establish additional Subcommittees (the “Sub-Committees”) to execute individual duties of the Collaboration Committee to the extent they relate to a particular therapeutic indication. Each of the Steering Committees shall meet as needed, but not less than once each quarter during the Establishment Term. Subject to the foregoing, such meetings shall be at such times agreed to by BG and GPC and shall be held, to the extent practicable, at GPC’s or the Center’s offices in Waltham, Massachusetts unless the Parties otherwise agree or shall be in such other form (e.g., telephone or video conference) as the members of the relevant Steering Committee shall agree.

2.5.2 Steering Committees: Functions and Powers.

(a) The Joint Steering Committee shall be responsible for the overall supervision and management of the Collaboration and the transfer of the GPC Platform, Platform Improvements, Third Party Technology and Third Party Technology Improvements to the Genomics Center. The principal functions of the Joint Steering Committee shall include, without limitation:

(i) receiving reports from GPC on a regular basis which specify the ongoing developments regarding the GPC Platform and Third Party Technology and outline the Platform Improvements and Third Party Technology Improvements which will be transferred and implemented under this Agreement;

(ii) considering and approving reasonable adaptations or modifications to the Research Plan as a result of changes and developments that occur in the research performed in the Collaboration and the changing requirements of BG arising therefrom;

(iii) considering and approving any changes to the allocation of BG FTEs at the Genomics Center;

(iv) allocating the resources of the Genomics Center during the Establishment Term;

(v) evaluating, monitoring and recommending on a periodic basis the in-licensing of any Third Party intellectual property for the Genomics Center or the Collaboration;

(vi) approving, within thirty (30) days after receipt of a report from the Transfer Committee relating to the achievement of an Annual Implementation Milestone, the achievement of such Annual Implementation Milestone; and

(vii) recommending to BG whether a Target should be designated as a Catalogue Target or a Reverted Target by BG in accordance with Section 2.9.2. Recommendation shall be made based on the discussions and mutual understandings in the Collaboration Committee.

(b) The Transfer Committee shall be responsible for the overall supervision of the transfer of the GPC Platform, Platform Improvements, Third Party Technology and Third Party Technology Improvements. The principal functions of the Transfer Committee shall include, without limitation, monitoring the progress and results under the transfer of the GPC Platform, the Platform Improvements, the Third Party Technology and the Third Party Technology Improvements and revising, as necessary, the Transfer Plan. The Transfer Committee shall agree on whether during the transfer of the technology and the related know-how, Annual Implementation Milestones have been met and shall report to the Joint Steering Committee accordingly in writing.

(c) The Collaboration Committee or the Sub-Committees established by it, shall be responsible for the overall supervision and management of the Collaboration. The Collaboration Committee shall report to the Joint Steering Committee, the Sub-Committees to the Collaboration Committee. The principal functions of the Collaboration Committee shall include, without limitation:

(i) monitoring the progress and results achieved under the Collaboration and revising, as necessary, the Research Plan;

(ii) determining the Designation Criteria to be fulfilled for target validation on a case by case basis in accordance with Section 2.9.1;

(iii) recommending to the Joint Steering Committee, whether a Target resulting from the Collaboration should be designated as a Catalogue Target or a Reverted Target by BG in accordance with Section 2.9.2;

(iv) determining and agreeing whether a compound to be assayed by use of the GPC Platform and Third Party Technology during the Collaboration Term is a BG Compound; and

(v) determining and agreeing whether a target to be assayed by use of the GPC Platform or Third Party Technology during the Collaboration Term is a BG Target.

A Party may change one or more of its representatives to a Steering Committee at any time upon written notice to the other Party. Members of a Steering Committee may be represented at any meeting by another member of the Steering Committee, or by a deputy. Either Party may permit additional employees and consultants to attend and participate (on a non-voting basis) in Steering Committee meetings, subject to the confidentiality provisions of Article 10.

2.5.3 Decisions of the Steering Committees. A quorum of a Steering Committee shall be present at any meeting of the Steering Committee if at least one (1) representative of each Party is present at such meeting in person or by telephone or video conference. If a quorum exists at any meeting, the unanimous consent of all members of the Steering Committee present at such meeting is required to take any action on behalf of the Steering Committee. In the event that a Steering Committee cannot reach agreement within thirty (30) days as to any matter that is subject to its decision-making authority, except as provided below, the matter shall be referred to dispute resolution in accordance with Article 16.

2.5.4 Co-Chairs. Each Steering Committee shall be co-chaired by one BG representative appointed by BG and one GPC representative appointed by GPC from the membership of the Steering Committee.

2.5.5 Minutes and Reports. Each Steering Committee shall be responsible for keeping accurate minutes of its deliberations which record all proposed decisions and all actions recommended or taken. Within ten (10) business days of each meeting, the co-chairs shall provide the Parties with draft minutes of such meeting and a draft of a written accompanying report describing, in reasonable detail, the status of the Research Program, a summary of the work and progress to date, any issues requiring resolution and any proposed decisions and the action taken to all members of the Steering Committee. Within thirty (30) days of each meeting, the co-chairs will sign final versions of the meeting minutes and the accompanying report and such minutes and such report shall thereafter be recognized as duly accepted by the Parties. All records of each Steering Committee shall be available to both Parties.

2.5.6 Information and Results. Except as otherwise provided, the Parties will make available and disclose to one another all results of the work conducted pursuant to the Collaboration and the status of the transfer of the GPC Platform and Third Party Technology prior to and in preparation for the Steering Committee meetings, by the deadline and in the form and format to be designated by each Steering Committee.

2.6. Management of the Genomics Center. The Genomics Center shall be managed by a BG management team consisting of a director and management support staff, which shall be responsible for, among other things, creation of the Genomics Center, management of the

projects to be carried out at the Genomics Center (including the projects included within the Collaboration), and interaction with BG’s research units in Konstanz, Germany, BG’s Affiliates and with Third Parties.

2.7. Primary Contact Persons. Within ten (10) business days of the Effective Date, BG and GPC shall each designate a primary contact person (“Primary Contract Person”) who shall be responsible for the day-to-day interactions between the Parties related to the Collaboration and the management of the day-to-day operation of the Collaboration. Each Party may change its Primary Contact Person upon written notice to the other Party. The Joint Steering Committee may request each Party to designate specific primary contact persons which shall be responsible for the day-to-day interactions in specific areas or projects during the Establishment Term and the Collaboration Term (the “Specific Primary Contact Persons”).

2.8. Collaboration Term; Extension of Establishment Term.

2.8.1 Unless this Agreement is terminated sooner in accordance with Section 15.2, the research term of the Collaboration (the “Collaboration Term”) shall commence on the Effective Date and shall continue for forty-two (42) months thereafter.

2.8.2 Upon BG’s written request made at least six (6) months prior to the then-current end of the Establishment Term, GPC agrees to negotiate in good faith with BG with respect to the extension of the Establishment Term.

2.9. Target Identification and Disposition.

2.9.1 Target Identification. GPC and BG shall use Commercially Reasonable Efforts in the Field to identify Targets in the performance of the Collaboration according to the Research Plan in Exhibit B. GPC and BG shall promptly notify the Collaboration Committee of any such Target identified and the Collaboration Committee shall agree on (i) relevant in-vitro validation and/or in vivo experiments for such Target and (ii) such place at which the agreed validation experiments have to be carried out if this cannot be performed at the Genomics Center. Upon completion of such additional validation, GPC and BG shall promptly notify the Collaboration Committee of the results of such experiments.

2.9.2 Recommendation by Collaboration Committee. The Collaboration Committee shall, further to Section 2.9.1, without undue delay following disclosure of any Target pursuant to Section 2.9.1, convene in person, by telephone or by video conference in order to evaluate each Target disclosed to it and recommend that such Target be designated as either a Catalogue Target or a Reverted Target by BG pursuant to Section 2.9.4 and 2.9.5 hereof.

2.9.3 Determination by BG. Following the recommendation by the Collaboration Committee pursuant to Section 2.9.2, BG shall, through its internal committee, further evaluate each Target to determine if such Target meets the Designation Criteria.

2.9.4 Catalogue Target. If BG determines, within ninety (90) days of the date of the Collaboration Committee meeting at which the recommendation by the Collaboration Committee with respect to a Target pursuant to Section 2.9.2 was made, that such Target meets the Designation Criteria, then BG shall notify GPC in writing (the “Catalogue Target Notice”)

and such Target shall constitute a “Catalogue Target”. BG shall make the Research Milestone payment as specified in Section 6.1.5(c) within thirty (30) days from the Catalogue Target Notice. BG shall have exclusive rights to any Licensed Patents claiming such Catalogue Target pursuant to Section 3.1.1. Within thirty (30) days after any Target becomes a Catalogue Target, GPC shall provide BG with access to all Information under GPC Control for such Catalogue Target.

2.9.5 Reverted Target. If BG determines that a Target does not meet the Designation Criteria and so notifies GPC in writing, or if BG fails to notify GPC in writing with a Catalogue Target Notice of its determination within ninety (90) days of the Collaboration Committee’s recommendation with respect to a Target pursuant to Section 2.9.2, or fails to make the payment required in Section 6.1.5(c) hereof and such failure has not been cured within twenty (20) days after receipt of notice thereof from GPC, then such Target shall be designated a “Reverted Target,” and GPC shall have exclusive rights to Collaboration Patents claiming such Reverted Target pursuant to Section 3.3.2.

2.9.6 BG Accepted Target. In the event a Target is designated by BG as a Catalogue Target pursuant to Section 2.9.4 hereof, BG shall diligently undertake to validate a Catalogue Target as soon as reasonably possible (taking into account BG’s resources) and shall have the right to elect a Catalogue Target to become an Accepted Target. Such election must be made within the twenty-one (21) month period beginning on the date BG designates a Target as a Catalogue Target (the “Evaluation Period”). In the event that, despite BG’s Commercially Reasonable Efforts, BG is unable to sufficiently validate a Catalogue Target within the Evaluation Period, the Parties shall negotiate in good faith an extension of the Evaluation Period, if any. In the event BG desires to elect to have a Catalogue Target designated as an Accepted Target pursuant to this Section, BG shall notify GPC within the Evaluation Period (as it may be extended pursuant to the preceding sentence) in writing of such election (the “Accepted Target Notice”) and such Target shall constitute an “Accepted Target”. BG shall effect the payment required in Section 6.1.5(d) hereof within thirty (30) days from the Accepted Target Notice.

2.9.7 GPC Elected Target. In the event BG does not elect a Catalogue Target to become a BG Accepted Target and make the payment required by Section 6.1.5(d) pursuant to Section 2.9.6 hereof, or fails to notify GPC in writing with an Accepted Target Notice of the election of an Accepted Target with respect to a Catalogue Target pursuant to Section 2.9.6, then such Catalogue Target shall automatically be designated a “GPC Elected Target,” and BG’s license to such Catalogue Target under Sections 3.1.1 and 3.1.2 shall automatically terminate, and GPC shall have exclusive rights to BG Intellectual Property and Collaboration Patents claiming such GPC Elected Target pursuant to Section 3.3.3. Within thirty (30) days after any Catalogue Target becomes a GPC Elected Target, BG shall provide GPC with access to Information under BG Control for such GPC Elected Target.

ARTICLE 3

License Grants

3.1. Collaboration Licenses.

3.1.1 Exclusive Commercialization License. Subject to the terms and conditions of this Agreement and the agreements identified in Exhibit I, including, without limitation, the rights of GPC with respect to Reverted Targets and GPC Elected Targets under Sections 3.3.2 and 3.3.3, GPC hereby grants to BG a worldwide, royalty-bearing exclusive license, with the right to sublicense, under GPC’s interest in the Licensed Patents and the Collaboration Technology to develop, register, make, have made, use, offer for sale, sell and import Products in the Field. Such license shall be perpetual for Project Candidates and Products for which BG complies with its payment obligations under Section 6.1, to the extent applicable, and under Section 6.2.

3.1.2 Exclusive Research License. Subject to the terms and conditions of this Agreement, GPC hereby grants to BG a worldwide, royalty-free exclusive license, without the right to sublicense, under GPC’s interest in the Licensed Patents and the Collaboration Technology to conduct research solely within the Field, (i) on a Catalogue Target-by-Catalogue Target basis during the Evaluation Period for each Catalogue Target, and (ii) perpetually for each Accepted Target for which BG complies with its payment obligations under Section 6.1, to the extent applicable.

3.1.3 BG License Limitations.

(a) The licenses granted to BG under Sections 3.1.1 and 3.1.2 are subject to the retention by GPC of a non-exclusive research license with the right to sublicense or subcontract solely for purposes of conducting GPC’s obligations in the Collaboration under the Research Plan.

(b) Any sublicense by BG of the rights granted to BG in Section 3.1.1 shall be consistent with the terms of this Agreement and shall include an obligation for the sublicensee to comply with the applicable obligations of this Agreement including, without limitation, Article 6 pertaining to payments, Article 7 pertaining to reports and audits, Article 8 pertaining to books and records and Article 10 pertaining to confidentiality. BG shall notify GPC of the existence of any sublicense of the rights granted herein to a Third Party within ten (10) days of entering into such sublicense.

(c) BG shall not sell or otherwise transfer to a Third Party all or a portion of its rights to an Accepted Target, Viable Target, Project Candidate or Product (a “Transfer”) without first complying with the terms of this Section 3.1.3(c). In the event that BG desires to effect a Transfer, then, prior to any such Transfer, BG shall so notify GPC, specifying the Target, Project Candidate or Product that BG desires to so transfer and the terms upon which such Transfer is proposed (the “Transfer Notice”). BG and GPC shall negotiate in good faith, for a period of not less than sixty (60) days from GPC’s receipt of the Transfer Notice, the terms under which BG may effect such Transfer. In the event that BG and GPC are unable to agree on such terms within such 60-day period, then the matter shall be submitted to dispute resolution in accordance with the terms of Article 16 hereof. Upon final resolution of such terms pursuant to agreement of the parties or the dispute resolution provisions of Section 16, BG may effect the Transfer on the terms specified in the Transfer Notice. In the event that BG subsequently desires to effect a Transfer with respect to any other Target resulting from the Collaboration, Project Candidate or Product, the terms of this Section 3.1.3(c) continue to apply.

3.2. Genomics Center Licenses.

3.2.1 GPC Platform License.

(a) General. Subject to the terms and conditions of this Agreement, GPC hereby grants to BG a perpetual, worldwide, non-exclusive, fully paid up (after payments relating thereto having been made as provided for herein) license, without the right to grant sublicenses (except as expressly set forth in this Section 3.2.1), under the GPC Platform and the Platform Improvements for use by BG only in the Field. GPC agrees that BG may sublicense a Third Party under the rights granted to BG in this Section 3.2.1 solely to perform research on behalf of BG and for the sole benefit of BG; provided, however, that BG will provide to GPC a copy of each such sublicense agreement promptly after execution thereof; provided further, that BG may redact any Confidential Information contained in such copies provided to GPC. Any such sublicense will be granted pursuant to an agreement between BG and such Third Party which contains restrictions on the use and disclosure of the GPC Platform and the Platform Improvements which are no less onerous than the restrictions on BG contained in this Agreement and shall prohibit such Third Party from sublicensing the rights sublicensed to it by BG under this Section 3.2.1. BG acknowledges that it will be obligated to enter into, at its own expense, other necessary licenses covering Third Party intellectual property as listed in Exhibit H in order to fully practice the GPC Platform. GPC will reasonably assist BG in obtaining such licenses.

(b) Source Code to Software Included in GPC Platform. GPC agrees to provide BG with one (1) copy of the source code to each software program transferred to the Genomics Center pursuant to Section 2.1 hereof, in each case solely for use as permitted in Section 3.2.1. GPC will transfer the source code only after installation of such software at the Genomics Center and acceptance by BG of such software as fully functioning at the Genomics Center.

3.2.2 Sublicense to Third Party Technology. Subject to the terms and conditions of this Agreement and the agreements identified in Exhibit I, GPC hereby grants to BG a perpetual, worldwide, non-exclusive, fully paid up (after payments relating thereto having been made as provided for herein) sublicense, without the right to grant sublicenses (except as expressly set forth in this Section 3.2.2), under GPC’s exclusive rights to the Third Party Technology under the agreements identified in Exhibit I and the Third Party Technology Improvements for use by BG only in the Field. Subject to the terms of the agreements identified in Exhibit I, GPC agrees that BG may sublicense a Third Party under the rights granted to BG in this Section 3.2.2 solely to perform research on behalf of BG and for the sole benefit of BG; provided, however, that BG will provide to GPC a copy of each such sublicense agreement promptly after execution thereof; provided further, that BG may redact any Confidential Information contained in such copies provided to GPC. Any such sublicense will be granted pursuant to conditions described in Section 3.2.1.

3.2.3 New Technology other than Platform Improvements. GPC hereby grants to BG a perpetual, worldwide, co-exclusive license, with the right to grant sublicenses, to GPC’s interest in any intellectual property jointly conceived, discovered, identified or first reduced to practice during the Establishment Term by employees of GPC working in the Center and employees of BG that is not a Platform Improvement or a Third Party Technology Improvement.

3.3. Licenses to GPC.

3.3.1 Research License. Subject to the terms and conditions of this Agreement, BG hereby grants GPC a non-exclusive research license in the Field, during the Collaboration Term, under the BG Intellectual Property rights solely to use the proprietary materials and information that BG provides to GPC under the Collaboration for conducting GPC’s obligations in the Collaboration under the Research Plan.

3.3.2 Exclusive License for Reverted Targets. Subject to the terms and conditions of this Agreement, BG hereby grants GPC a worldwide, fully paid, exclusive license, with the right to sublicense, under BG’s interest in the Joint Inventions, Collaboration Patents, BG Intellectual Property and, to the extent assigned to BG under Section 11.2, GPC Patents claiming any Reverted Target to conduct research and to develop, make, use, offer for sale, sell and import products, which products are based on such Reverted Target.

3.3.3 Exclusive License for GPC Elected Targets. Subject to the terms and conditions of this Agreement, BG hereby grants GPC a worldwide, fully paid, exclusive license or sublicense, with the right to sublicense, under BG’s interest in the BG Intellectual Property, Joint Inventions, and Collaboration Patents claiming any GPC Elected Target to conduct research and to develop, make, use, offer for sale, sell and import products, which products are based on such GPC Elected Target.

3.3.4 New Technology other than Platform Improvements. BG hereby grants to GPC a perpetual, worldwide, co-exclusive license, with the right to grant sublicenses, to BG’s interest in any intellectual property jointly conceived, discovered, identified or first reduced to practice during the Establishment Term by employees of BG and employees of GPC working in the Center that is not a Platform Improvement or a Third Party Technology Improvement.

3.3.5 Non-Exclusive License to BG Blocking Inventions. BG acknowledges that BG or the Genomics Center may through use of the GPC Platform, GPC Platform Improvements, Third Party Technology or Third Party Technology Improvements make discoveries or inventions that block GPC, its Affiliates or sublicensees or other customers of GPC from using the GPC Platform or GPC Platform Improvements to the extent of the rights granted to BG hereunder (“Blocking Inventions”). To prevent this occurrence, BG hereby grants GPC an irrevocable, non-exclusive, royalty-free right and license, with the right to grant sublicenses, under BG’s and the Genomics Center’s rights to Blocking Inventions and any patents arising from patent inventions filed on Blocking Inventions which are required, and only to the extent required, to enable GPC, its Affiliates, sublicensees and other customers to use the GPC Platform, GPC Platform Improvements, Third Party Technology and Third Party Technology Improvements.

3.4. No Other Rights. Except as otherwise expressly provided in this Agreement, under no circumstances shall a Party hereto, as a result of this Agreement, obtain any ownership

interest in or other right to any technology, know-how, patents, patent applications, products or materials of the other Party.

ARTICLE 4

Diligence

4.1. Diligence. Only as a condition for BG maintaining its exclusive license granted to BG pursuant to Sections 3.1.1 and 3.1.2, but not as a legal obligation, BG shall itself or through its corporate partners or sublicensees use Commercially Reasonable Efforts to start and continue development activities of a Project Candidate based on each Catalogue Target during the Evaluation Period (until such time as a Catalogue Target is determined not to be an Accepted Target pursuant to Section 2.9.6) and each Accepted Target for which BG has paid the Research Milestone under Section 6.1.5(d) (until such time as an Accepted Target is determined not to be a Viable Target) consisting of the initiation of clinical trials of Project Candidate, submission of regulatory filings and commercial launch of a Product.

With respect to each Target, beginning with the designation of each Catalogue Target by BG pursuant to Section 2.9.4 and quarterly thereafter, BG shall submit to GPC a summary progress report covering its activities related to developing Project Candidates and commercializing Products and preparing and filing all necessary regulatory approvals. Such progress reports shall be treated as Confidential Information. These progress reports shall be made for each Product until the First Commercial Sale of that Product.

4.2. Return of an Accepted Target, Project Candidate or a Product to GPC.

4.2.1 If any one of the following events (a “Return Event”) occurs, then, except as set forth in Section 4.2.3 below, the Accepted Target, Project Candidate or Product, as the case may be, shall be returned to GPC, as described in Section 4.2.2 below:

(a) the Collaboration Committee at any time determines that an Accepted Target is not a Viable Target;

(b) BG or its sublicensee fails to use Commercially Reasonable Efforts to develop a Project Candidate for a Viable Target in accordance with Section 4.1 and GPC notifies BG of such failure, which notification is either accepted by BG or there is a final determination pursuant to Article 16 that such failure has occurred, and neither BG or a sublicensee is using Commercially Reasonable Efforts in accordance with Section 4.1 to develop at least one Project Candidate for the same Viable Target, and BG or its sublicensee fails to remedy or take reasonable action to remedy such event within ninety (90) days after notice thereof by GPC; or

(c) following receipt by BG or its sublicensee of all necessary regulatory approvals to market a Product in a major market country as listed in Exhibit C (a Major Market Country), there is a continuous one (1) year period during which no such Product is sold in such Major Market Country (provided that such sale is not prevented by Force Majeure, government regulation or intervention or institution of a law suit by a Third Party), and BG or its sublicensee fails to take reasonable action to initiate the sales of such Product in the respective Major Market Country during such one (1) year period within one hundred and twenty (120) days after notice thereof by GPC.

4.2.2 Upon the occurrence of a Return Event and except as described in Section 4.2.3, (A) GPC shall have the right to terminate the licenses and rights granted to BG pursuant to Section 3.1 with respect to such Accepted Target and/or such Product (but, as to Section 4.2.1(c) above, only in such country), and, following such termination, (B) BG will immediately cease to develop or manufacture and sell, as applicable, such Accepted Target, Project Candidate or Product (but, as to Section 4.2.1(c) above, only in such country), and (C) GPC shall have a worldwide, perpetual right and license under BG Intellectual Property (however, with respect to trademarks Controlled by BG or its Affiliates such license shall be limited to the country referred to in Section 4.2.1(c) above and subject to the restrictions referred to in Section 15.3.5 second sub-paragraph) to conduct research and development using Commercially Reasonable Efforts within the Field with respect to such Accepted Target, Project Candidate or Product (but, as to Section 4.2.1(c) above, only in such country) and to sell such Product or any Product resulting from such research and development using Commercially Reasonable Efforts which license shall be royalty bearing on the same terms as Products sold by BG bear royalties hereunder; provided, however, that GPC shall not have the right to terminate this Agreement in its entirety based on any failure to diligently develop Product so long as BG at least diligently pursues a Target according to the Target election procedure or one Project Candidate and/or Product is being pursued diligently by BG in accordance with Section 4.1, and further provided that the rights of GPC described in this Section 4.2.2 shall be in lieu of any right to terminate this Agreement in its entirety in the event of failure by BG to commercialize a Product pursuant to Section 4.2.1(c) in any particular Major Market Country (provided that BG is commercializing a Product in no less than three (3) other Major Market Countries).

4.2.3 Upon the occurrence of an event described in Section 4.2.1(b) above, BG may elect, in lieu of GPC’s exercise of the rights described in Section 4.2.2, to (a) suspend research and development of such Accepted Target, Project Candidate or Product, (b) retain all rights hereunder with respect to such Accepted Target, Project Candidate or Product and (c) pay to GPC an amount equal to One Hundred Thousand Dollars ($100,000) per calendar year with respect to each Accepted Target, Project Candidate or Product, payable quarterly in advance and pro rated for any partial calendar quarters, with the first payment due within ninety (90) days of the occurrence of the event described in Section 4.2.1(b) for the quarter or partial quarter in which such period ends. If at any time BG fails to make a payment within thirty (30) business days of the date that such payment is due in accordance with this Section, GPC shall have the rights described in Section 4.2.2 with respect to such Accepted Target or Product.

ARTICLE 5

FTE and Research Funding

5.1. FTE Rates and Adjustments. The annual FTE rate for FTEs working on the Collaboration shall be based on a rate of Two Hundred Fifty Thousand Dollars ($250,000) per FTE for 2001, with such rate to be increased by three percent (3%) per year for each year after 2001. Beginning on January 1, 2002, the annual FTE rate shall, therefore, be an adjusted rate.

5.2. FTE Support. The number of BG and GPC FTEs devoted by each Party to the transfer of the GPC Platform and the Collaboration shall be as set forth on the Resource Plan as described in Exhibit E attached hereto. Subject to BG’s obligations under the Research Plan, BG’s FTEs not included in the Resource Plan working at the Genomics Center may be

reasonably assigned by the BG management team at the Genomics Center to other research programs to be performed and technologies to be applied by BG which do not relate to the Collaboration or incorporate other technologies of the GPC Platform. In addition, subject to the consent of the Joint Steering Committee, BG FTEs included in the Resource Plan may also be subject to reasonable assignment to other programs being conducted at the Genomics Center, provided that the time schedules and the achievement of the milestones set forth in the Research Plan, to the extent dependent on the efforts of BG FTEs, and the transfer of the GPC Platform are not, in the opinion of the Joint Steering Committee, negatively affected.

5.3. Payment of Research Funding. The funding of GPC FTEs set forth in the Resource Plan shall be paid by BG quarterly in advance during the Establishment Term with the first payment to be paid within thirty (30) days after the Effective Date.

ARTICLE 6

Payments

6.1. Payments to GPC.

6.1.1 Reimbursement Fee. As partial reimbursement for GPC’s efforts and expenditures in developing the GPC Platform, BG shall pay GPC a reimbursement fee (the “Reimbursement Fee”) of Ten Million Dollars ($10,000,000) payable thirty (30) days after the Effective Date.

6.1.2 Annual License Fee. In consideration of BG’s continued access to the Collaboration Technology, the GPC Platform and the GPC Platform Improvements, BG shall pay to GPC a total annual license fee (the “Annual License Fee”) of Four Million Dollars ($4,000,000) per year for each of the five Contract Years. The Annual License Fee shall be payable annually in advance, with the first payment of $4,000,000 due thirty days (30) after the Effective Date.

6.1.3 Annual Sublicense Fee. In consideration of BG’s continued access to the Third Party Technology and Third Party Technology Improvements, BG shall pay to GPC an annual sublicense fee (the “Annual Sublicense Fee”) of (i) *** per year for each of the five Contract Years for the sublicense rights under the agreement specified in Exhibit I No.1, (ii) *** per year for each of the five Contract Years for the sublicense rights under the agreement specified in Exhibit I No.2, and (iii) *** per year for each of the five Contract Years for the sublicense rights under the agreement specified in Exhibit I No.3. The Annual Sublicense Fee shall be payable annually in advance, with the first payment of *** due thirty days (30) after the Effective Date.

6.1.4 Annual Technology Transfer Fee. In consideration of the transfer to BG of the GPC Platform and the GPC Platform Improvements, BG shall pay to GPC a total annual technology transfer fee (the “Annual Technology Transfer Fee”) of Two Million Four Hundred Thousand Dollars ($2,400,000) per Research Year for the first five Contract Years, payable pro rata based on the total number of Annual Implementation Milestones for such year within thirty (30) days of achievement of each of the individual Annual Implementation Milestones as set

***	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

forth in Exhibit F attached hereto, as determined by the Joint Steering Committee. Payments for milestones not achieved in a particular year shall be paid in a succeeding year if the milestone is achieved in such succeeding year.

6.1.5 Research Milestones. BG shall make the following research-based milestone payments to GPC upon the achievement of each of the applicable milestones with respect to Targets and Products (the “Research Milestones”):

(a) upon the completion of the library construction in the *** Research Program, *** for each library with a maximum funding of two (2) libraries; upon the completion of the library construction in the *** Research Program, *** for each library with a maximum funding of two (2) libraries;

(b) upon the completion of a library screening in the *** Research Program for a target, *** for each completed library screen with a maximum funding of two (2) library screens; upon the completion of a library screening in the *** Research Program, *** for each completed library screen with a maximum funding of two (2) library screens;

(d) upon the designation by BG of an Accepted Target pursuant to Section 2.9.6, *** for each Accepted Target; and

(e) upon the selection by BG of a Project Candidate, *** for each Project Candidate. Notwithstanding the foregoing, in a case where a Project Candidate directed against an Accepted or Viable Target fails in research and clinical development, and BG moves another Project Candidate against the same Viable Target into research and clinical development (a “Substituted Project Candidate”) as a backup to the failed Project Candidate, then the Research Milestone previously paid in connection with the failed Project Candidate shall not be due on the Substituted Project Candidate.

6.1.6 All payments to be made to GPC by BG pursuant to Section 6.1.5 shall be made within thirty (30) days of receipt of the corresponding invoice by GPC following the achievement of each applicable Research Milestone. The Party initiating any event triggering a Research Milestone payment hereunder shall promptly report the achievement of such milestone to the other Party.

6.1.7 Clinical Milestones. In consideration of the grant of license rights to BG hereunder, BG shall make the payments set forth below for each Product per Accepted or Viable Target to achieve the corresponding clinical milestone event with respect to Products as set forth below. BG shall promptly notify GPC of the occurrence of any milestone event. Notwithstanding the foregoing, in a case where a Product directed against an Accepted or Viable Target fails in clinical development, and BG moves another Product against the same Accepted or Viable Target into clinical development (a “Substituted Product”) as a backup to the failed

***	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Product, then clinical milestone payments previously paid in connection with the failed Product shall not be due on a subsequent Product. Fifty percent (50%) of payments made pursuant to this Section with respect to each subsequent Product directed against the same Accepted or Viable Target after the first such Product (and where such subsequent Product is not a Substituted Product) shall be credited against payments due to GPC pursuant to Section 6.2.


Milestone Event	Payment
[(i) Filing of IND with the FDA (if not rejected)	*	**

(ii) Initiation of Phase II or Phase I/II Clinical Trial	*	**

(iii) Initiation of Phase III Clinical Trial	*	**

(iv) Filing of an NDA with the FDA	*	**

(v) Filing of MAA with the EMEA	*	**

(vi) Filing of drug approval application with MHW	*	**

(vii) Regulatory Approval of Product in U.S.	*	**

(viii) Regulatory Approval of Product in Europe	*	**

(ix) Regulatory Approval of Product in Japan	*	**

For the avoidance of doubt, with respect to the clinical milestones set forth in (ii) and (iii) above, in the event a clinical trial is initiated which is a combination of Phase I Clinical Trial and Phase II Clinical Trial or a Phase II Clinical Trial and a Phase III Clinical Trial, then BG shall pay both applicable milestone payments to GPC. All payments to be made to GPC by BG pursuant to this Section 6.1.7 shall be made within thirty (30) days of receipt of the corresponding invoice by GPC following the achievement of each applicable milestone.

6.1.8 Limitations on Milestone Payments. Notwithstanding anything contained herein, no Research Milestones or Clinical Milestones shall be payable with respect to BG R&D Compounds or BG Validated Targets.

***	Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

6.2. Royalties.

6.2.1 Products. In further consideration of the licenses granted herein, BG shall pay to GPC the following royalties on worldwide cumulative annual Net Sales of Products in any calendar year:


	Royalty Rate
Net Sales	Products Marketed for *******	Products Marketed for Indications ***
Less than or equal to $100 million	***	***
Greater than $100 million but less than or equal to $250 million	***	***
Greater than $250 million but less than or equal to $500 million	***	***
Greater than $500 million but less than or equal to $1,000 million	***	***
Greater than $1,000 million	***	***

Royalties with respect to each Product shall be paid to GPC on a country-by-country basis for the longer of (a) 10 years from First Commercial Sale of such Product in such country; (b) until there no longer exists a Valid Claim covering the therapeutic agent or active ingredient within such Product (without regard to other Valid Claims covering other aspects of such Product, including, for example, claims covering the formulation, application or synthesis of such Product); or (c) until there no longer exists a Valid Claim of Licensed Patents whose use resulted in the Product. Payments shall be made concurrently with delivery of the quarterly payment report pursuant to Section 7.4. Royalties shall be paid at the applicable marginal rate set forth above with respect to Net Sales in a particular year. Therefore, for example, if cumulative annual Net Sales of a Product marketed for *** were ***, BG would pay to GPC royalties at the rate of ***% of Net Sales up to $100 million ***% of Net Sales above $100 million up to $250 million ***, and ***% of Net Sales above $250 million up to $400 million *** for total royalties due in that year of ***.

6.2.2 Reductions to Royalties. The royalties set forth in Section 6.2.1 shall be reduced as follows:

(i) If BG is required to pay royalties to Third Parties for rights under patents necessary to develop, make or sell Products, it may deduct an amount equal to up to *** of such royalties from the royalties due to GPC under Section 6.2.

(ii) In the event that there exists Significant Generic Competition (as defined below) in a country, the royalty rate that would otherwise be applicable to sales in such country shall be reduced by ***. “Significant Generic Competition” shall occur in a country where (i) there is no Valid Claim covering a Product in such country, (ii) another entity is selling the same product as the Product for the same indication in such country, and (iii) sales by BG of the Product in such country have been negatively impacted in such

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country by more than *** over a one (1) year period by the entry of the generic competitor selling the same Product.

(iii) Notwithstanding the foregoing, in no event shall the applicable royalty in any country be reduced below the greater of (i) *** of the royalty otherwise applicable or (ii) *** of Net Sales. Notwithstanding the foregoing, the minimum royalty rate for Combination Products marketed shall be ***.

ARTICLE 7

General Payment Provisions and Royalty Reports

7.1. Currency. All monies due to GPC hereunder are payable in United States dollars. When Products are sold for monies other than United States dollars, the earned royalties will first be determined in the foreign currency of the country in which such Products were sold and then converted into equivalent United States funds. The exchange rate will be the average rate between the buying and selling rate as quoted in the Wall Street Journal on the last business day of the reporting period.

7.2. Foreign Legal Restrictions on Payment. If at any time legal restrictions prevent the prompt remittance of part or all payments by BG with respect to any country where a Product is sold, unless prohibited from lawfully doing so, BG shall pay GPC directly from another source of funds for the amount impounded. BG will then pay all future royalties due to the other from another source of funds so long as the legal restrictions of this section still apply.

7.3. First Commercial Sale. BG also agrees to report to GPC in its immediately subsequent progress and royalty report the date of First Commercial Sale of a Product in each country.

7.4. Quarterly Payment Reports. After the First Commercial Sale of a Product anywhere in the world, BG shall make quarterly payment reports to GPC on or before the first day of March, June, September and December of each year for the preceding calendar quarter. Each report shall cover the most recently completed calendar quarter and shall show (a) the gross sales and Net Sales of Products sold during the most recently completed calendar quarter; (b) the number of each type of Products sold; (c) the royalties, in U.S. dollars, payable with respect to the sales; (d) the method used to calculate the payments owed to GPC; and (e) the exchange rates used. If no sales of Products are made during any reporting period, a statement to this effect is required.

7.5. Interest on Late Payments. BG will be in default with respect to payment, without receipt of a reminder from GPC, for all payments not paid timely. In case of default with respect to payment, any amount not paid timely shall bear interest from its due date through the date of effective receipt of payment at the rate of 4% over the prime rate published in the eastern edition of The Wall Street Journal on the date such payment was due or a comparable newspaper if The Wall Street Journal shall cease publishing the prime rate.

7.6. Taxes. All prices under this Agreement (royalties and other prices) are net prices. Any payment under this Agreement shall be made plus value added tax, if value added tax is levied under applicable law. Fees of any nature levied or incurred on account of any payments

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from BG to GPC accruing under this Agreement, by national, state or local governments, will be assumed and paid by BG.

ARTICLE 8

Books and Records

8.1. Accounting and Internal Controls. GPC and BG shall maintain accounts in accordance with good business practices and, specifically, shall (a) maintain full and accurate books, records and accounts which shall, in reasonable detail, accurately and fairly reflect all transactions related to this Agreement as far as reasonably necessary in order to determine the respective other Party’s claims thereunder (the “Transactions”); such books and records shall include a reasonable supporting documentation which may be necessary in particular for purposes of evidencing the Net Sales with respect to Products for which a royalty is due; and (b) devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that (i) Transactions are executed in accordance with general or specific authorisations, and (ii) Transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and as otherwise required to comply with all tax statutes, and to maintain accountability for assets.

8.2. Records and Audits. Each Party’s books of account and reasonable supporting documentation shall be kept at each Party’s principal place of business and shall be open at all reasonable times, for a minimum of five (5) years following the end of the calendar year to which they pertain (and access shall not be denied thereafter if reasonably available), to the inspection, to the extent reasonably required for verifying a Party’s claims against the other Party hereunder, by an independent certified public accountant or auditor retained by the auditing Party and acceptabl