EXELIXIS INC
COLLABORATION AGREEMENT WITH DOW AGROSCIENCES LLC
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<TYPE>EX-10.21
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<FILENAME>0002.htm
<DESCRIPTION>COLLABORATION AGREEMENT WITH DOW AGROSCIENCES LLC
<TEXT>

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<TITLE>Collaboration Agreement with Dow AgroSciences LLC </TITLE>
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<B><FONT SIZE=2><P>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.</P>
<P ALIGN="RIGHT">Exhibit 10.21</P>
</FONT><P ALIGN="CENTER">EXELIXIS INC. - DOW AGROSCIENCES LLC</P>
<P ALIGN="CENTER">AGREEMENT</P>
</B><P ALIGN="JUSTIFY">This Agreement, effective upon the date of the last
signature hereto (hereafter "<B>Effective Date</B>"), is between <B>Exelixis,
Inc.</B> (hereafter "<B>EXEL</B>"), which has an office located at 170 Harbor
Way, P.O. Box 511, South San Francisco, CA 94083-0511, and <B>Dow AgroSciences
llc </B>(hereafter "DAS"), which has an office located at 9330 Zionsville Road,
Indianapolis, IN 46268.</P>
<B><P ALIGN="JUSTIFY">Whereas</B>, EXEL has expertise in the field of functional
genomics and model genetic systems;</P>
<B><P ALIGN="JUSTIFY">Whereas</B>, DAS has expertise in the field of fungicides
and herbicides and will provide EXEL with DAS Historical Compounds (hereinafter
defined); </P>
<B><P ALIGN="JUSTIFY">Whereas</B>, EXEL and DAS desire to use their respective
expertise together in a Research Project (hereafter "RP") to identify genes
encoding Cognate Target (as hereafter defined) sites or High Quality Molecular
Target Sites (as hereafter defined), and then develop Research Milestones (as
hereafter defined) based on these Cognate Target sites or High Quality Molecular
Target Sites, and then use these Research Milestones to identify fungicides and
herbicides that interact with these Cognate Target sites and High Quality
Molecular Target Sites; and</P>
<B><P ALIGN="JUSTIFY">Whereas</B>, DAS will provide EXEL access to DAS
Historical Compounds for screening for biological activity related to human
therapeutic, diagnostic or vaccine products;</P>
<B><P ALIGN="JUSTIFY">Now Therefore</B>, EXEL and DAS (hereafter "<B>Party</B>"
if singular or "<B>Parties</B>" if plural) agree as follows:</P>
<OL TYPE="I">

<B><FONT COLOR="#0000ff"><P ALIGN="CENTER"><LI><BR>
<BR>
DEFINITIONS</LI></P>
<OL>

</B><P ALIGN="JUSTIFY"><LI>"<B>Active Ingredient</B>"</FONT> (hereafter "AI" if
singular and "AIs" if plural) shall mean a compound that can be used as a
fungicide or herbicide.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"Adjustment Factor"</B></FONT>
or "AF" shall mean <B>[</B> * <B>]</B> in a Combination Product (as hereafter
defined).</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"Affiliate"</B></FONT> shall
mean an enterprise or entity, directly or indirectly, owned or controlled by a
Party, under common ownership or control with a Party, or which, directly or
indirectly, owns or controls a Party. Ownership means at least a fifty (50)
percent ownership interest, and control means the right to exercise management
control. For purposes of this Section 1.3, the word "control" (including the
correlative meanings "controlled by" or "under the common control with") shall
mean the actual power, either directly or indirectly, through one or more
intermediaries, to direct or cause the direction of the management and policies
of such enterprise or entity, whether by the ownership of at least fifty (50)
percent of the voting stock of such enterprise or entity, or by contract or
otherwise.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"Approved FH"</B></FONT> shall
mean a Fungicide/Herbicide (as hereafter defined) that DAS has received approval
to sell in a Major Country (as hereafter defined) from the appropriate
government authority in that Major Country.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"Candidate Target"</B></FONT>
shall mean a <B>[</B> * <B>]</B> that confers resistance or hypersensitivity to
a compound when its activity in the organism has been altered (i.e. suppressed
or overexpressed).</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"Cognate Target"</B></FONT>
shall mean a <B>[</B> * <B>]</B> such as, for example, <B>[</B> * <B>]</B> which
has been demonstrated by <B>[</B> * <B>]</B> that are agreed upon by the Joint
Management Team (as hereafter defined), to encode a molecular target site of a
fungicide or herbicide provided by DAS to EXEL during the course of the
collaboration under this Agreement.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"Cognate Target
Assay"</B></FONT> shall mean an assay, or an expression system, developed
utilizing a Cognate Target that (i) <B>[</B> * <B>]</B> in the course of the
collaboration under this Agreement, (ii) <B>[</B> * <B>]</B>, and (iii) <B>[</B>
* <B>]</LI></P>
<FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"Combination Product"</B></FONT>
shall mean a product that contains <B>[</B> * <B>]</B> AIs, where at least one
of such AIs is a Fungicide/Herbicide.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"DAS's Field"</B></FONT> shall
mean fungicides and herbicides useful for the agricultural industry including,
but not limited to, <B>[</B> * <B>]</B>, and shall include activities within
this field related to these fungicides and herbicides, such as, for example,
making, using, selling, and importing these fungicides and herbicides.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"DAS Historical
Compound"</B></FONT> (hereafter "DAS HC" if singular and "DAS HCs" if plural)
shall mean <B>[</B> * <B>]</B> (which includes <B>[</B> * <B>]</B>) or <B>[</B>
* <B>]</B> collection.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"Development"</B></FONT> shall
mean the <B>[</B> * <B>]</B> stage of commercialization and is initiated at the
successful completion and preliminary analysis of the <B>[</B> * <B>]</B> and
the commitment <B>[</B> * <B>]</B>.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"EXEL's Field"</B></FONT> shall
mean <B>[</B> * <B>]</B> generated under the Research Project including, but not
limited to, <B>[ * ]</B> subject to Section 13.2.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"EXEL's Human Use
Field"</B></FONT> shall mean <B>[</B> * <B>]</B> and shall include <B>[ *
]</LI></P>
<FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"Fungicide/Herbicide"</B></FONT>
(hereafter "FH" if singular and "FHs" if plural) shall mean a fungicide or
herbicide identified using a Research Milestone.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"High Quality Molecular Target
Site"</B> </FONT>or "HQMT Site" shall mean a molecular target site
that:</LI></P><OL>
<OL TYPE="a">
<OL TYPE="i">
<OL>

<OL TYPE="a">

<P ALIGN="JUSTIFY"><LI>is at least as sensitive as molecular target sites
recognized as being industry state of the art;</LI></P>
<P ALIGN="JUSTIFY"><LI>is present in <B>[</B> * <B>]</B> that cause damage in
major crop markets; </LI></P>
<P ALIGN="JUSTIFY"><LI>is present <B>[</B> * <B>]</B> that cause damage in major
crop markets;</LI></P>
<P ALIGN="JUSTIFY"><LI>is not present in <B>[</B> * <B>]</B> or is sufficiently
<B>[</B> * <B>]</B> as to represent an opportunity to achieve commercial levels
of selectivity; and</LI></P>
<P ALIGN="JUSTIFY"><LI>has an <B>[</B> * <B>]</B> that causes damage in a major
crop market that is functionally equivalent.</LI></P></OL>
</OL>
</OL>
</OL>
</OL>

<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"Independent
Research"</B></FONT> shall mean <B>[</B> * <B>]</B> either independently or
pursuant to an agreement with a third party, and specifically includes <B>[</B>
* <B>]</LI></P>
<FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"Major Country"</B></FONT> shall
mean <B>[</B> * <B>]</LI></P>
<FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"Net Sales"</B></FONT> shall mean
the total amount received by DAS, its Affiliates, and its licensees, during a
calendar year (January 1-December 31), from sales of Stand-Alone Product (as
hereafter defined) to independent, unrelated third parties, in bona fide arms-
length transactions, less the following standard deductions actually paid or
allowed, and not subject to refund:</LI></P><OL>
<OL TYPE="a">
<OL TYPE="i">
<OL>
<OL TYPE="a">

<OL TYPE="i">

<P ALIGN="JUSTIFY"><LI>sales tax, excise tax, value added tax, and other taxes
and duties imposed on the sale, use, or distribution of Stand-Alone
Product;</LI></P>
<P ALIGN="JUSTIFY"><LI>normal and customary cash, trade, and quantity
discounts;</LI></P>
<P ALIGN="JUSTIFY"><LI>amounts paid or credited by reason of rejection or return
of goods, defects, rebates, or bona fide retroactive price reductions;
and</LI></P>
<P ALIGN="JUSTIFY"><LI>expenses for freight, insurance and the like paid in
connection with the distribution or sale of Stand-Alone Product.</LI></P>
<P ALIGN="JUSTIFY"><LI>If non-cash consideration, with a cash value greater than
<B>[</B> * <B>]</B> U.S. Dollars <B>[ * ]</B> as reasonably estimated by DAS, is
received in a bona fide arms-length transaction for commercial value, for any
Stand-Alone Product or Combination Product sold or otherwise transferred to an
independent third party not an Affiliate of the seller or transferor, the fair
market value of such non-cash consideration on the date of the transfer, shall
be included in the calculation of Net Sales, <B>[</B> * <B>]</B> or the Adjusted
Net Sales <B>[</B> * <B>]</LI></P></OL>
</OL>
</OL>
</OL>
</OL>

</B><P ALIGN="JUSTIFY">When calculating the Net Sales, the amount of such sales
in foreign currencies shall be converted into U.S. Dollars at the average rate
of exchange at the time for the applicable calendar year in accordance with
DAS's then current standard practices.</P>
<B><P ALIGN="JUSTIFY"><LI VALUE=1>"Adjusted Net Sales"</B> shall mean the total
amount obtained by adjusting the amount received by DAS, its Affiliates, and its
licensees, during a calendar year (January 1-December 31), from sales of
Combination Product to independent, unrelated third parties, in bona fide arms-
length transactions, less the following standard deductions:</LI></P><OL TYPE="a">

<OL TYPE="i">
<OL>
<OL TYPE="a">

<OL TYPE="i">

<P ALIGN="JUSTIFY"><LI>sales tax, excise tax, value added tax, and other taxes
and duties imposed on the sale, use, or distribution of Combination
Product;</LI></P>
<P ALIGN="JUSTIFY"><LI>normal and customary cash, trade, and quantity discounts
actually allowed;</LI></P>
<P ALIGN="JUSTIFY"><LI>amounts paid or credited by reason of rejection or return
of goods, defects, rebates, or bona fide retroactive price reductions;
and</LI></P>
<P ALIGN="JUSTIFY"><LI>expenses for freight, insurance and the like paid in
connection with the distribution or sale of Combination Product;</LI></P></OL>
</OL>
</OL>
</OL>
</OL>

<P ALIGN="JUSTIFY">where such adjusting is determined in accordance with
Exhibits A1, A2, A3, and A4.</P>
<B><P ALIGN="JUSTIFY"><LI>"Country Adjusted Net Sales"</B> or "CANS" shall mean
that portion of Adjusted Net Sales that took place in a certain
country.</LI></P>
<B><P ALIGN="JUSTIFY"><LI>"Country Net Sales"</B> or "CNS" shall mean that
portion of Net Sales that took place in a certain country.</LI></P>
<B><P ALIGN="JUSTIFY"><LI>"Country Total Net Sales"</B> or "CTNS" shall mean
that portion of Total Net Sales (as hereafter defined) that took place in a
certain country, which is equal to the CNS of Stand-Alone Products (if any)
containing a certain Fungicide/Herbicide plus the sum of CANS of those
Combination Products (if any) containing the same Fungicide/Herbicide in the
country in question.</LI></P>
<B><P ALIGN="JUSTIFY"><LI>"Total Net Sales"</B> or "TNS" shall mean the Net
Sales of Stand-Alone Products (if any) containing a certain FH plus the sum of
Adjusted Net Sales of Combination Products (if any) containing the same
FH.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"Patent"</B></FONT> shall mean a
document, representing an intellectual property right, made by a government or
sovereign of a country that can be used to exclude others from practicing the
invention claimed in the document.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"Predevelopment"</B></FONT>
shall mean the <B>[</B> * <B>]</B> stage of commercialization of a Product (as
hereafter defined) and is characterized by initiation of <B>[</B> *
<B>]</B>.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"Product"</B></FONT> shall mean
a Stand-Alone Product or Combination Product or both.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"Related Compound"</B></FONT>
shall mean a Homolog, Isomer, Analog, or First Order Derivative of a DAS
HC.</LI></P>
<OL>

<B><P ALIGN="JUSTIFY"><LI>"Analog"</B> shall mean <B>[</B> * <B>]</B> thereof by
an analogous element.</LI></P>
<B><P ALIGN="JUSTIFY"><LI>"First Order Derivative"</B> shall mean <B>[</B> *
<B>]</B>.</LI></P>
<B><P ALIGN="JUSTIFY"><LI>"Homolog"</B> shall mean <B>[</B> * <B>]</B> that does
not affect the essential relationship of the functional groups in the DAS
HC.</LI></P>
<B><P ALIGN="JUSTIFY"><LI>"Isomer"</B> shall mean <B>[</B> *
<B>]</B>.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"Research Milestone"</B></FONT>
shall mean: </LI></P><OL>
<OL TYPE="a">
<OL TYPE="i">
<OL>
<OL TYPE="a">

<OL TYPE="i">

<P ALIGN="JUSTIFY"><LI>a Cognate Target Assay; or </LI></P>
<P ALIGN="JUSTIFY"><LI>a biochemical activity assay, or expression system, for a
HQMT Site <B>[</B> * <B>]</B>;</LI></P></OL>
</OL>
</OL>
</OL>
</OL>
</OL>

<P ALIGN="JUSTIFY">which is accepted by the Joint Management Team.</P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>"Stand-Alone Product"</B></FONT>
shall mean a product that contains one FH and no other AI.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="CENTER"><LI><BR>
<BR>
"OBJECTIVES OF THE RP"</LI></P>
<OL>

</B></FONT><P ALIGN="JUSTIFY"><LI>It is an objective of this RP for DAS to
supply EXEL with a steady state of up to <B>[ * ]</B> compounds, where such
compounds have fungicidal or herbicidal activity or both (hereafter "DAS
Supplied Compounds"). DAS will provide EXEL any necessary information regarding
the compounds relating to safe handling procedures.</LI></P>
<P ALIGN="JUSTIFY"><LI>It is an objective of this RP for EXEL to apply its
expertise in functional genomics and model genetic systems to <B>[</B> *
<B>]</B>. EXEL and DAS shall <B>[</B> * <B>]</B> the DAS Supplied Compounds
using <B>[</B> * <B>]</B> and using <B>[</B> * <B>]</B>. EXEL shall evaluate the
<B>[</B> * <B>]</B> compounds in <B>[</B> * <B>]</B> Candidate Target sites
(hereafter "CT Site") and <B>[</B> * <B>]</B>; and <B>[</B> * <B>]</B> the
herbicidal or fungicidal molecular target site of the DAS Supplied Compound as a
Cognate Target. EXEL and DAS shall <B>[</B> * <B>]</B> according to the criteria
as set forth in Section 1.15. Attached Exhibit B outlines the scope of the
workplan defined under this Agreement.</LI></P>
<P ALIGN="JUSTIFY"><LI>It is an objective of this RP for DAS to identify FHs by
using its expertise in conjunction with a Research Milestone.</LI></P>
<P ALIGN="JUSTIFY"><LI>Both parties agree that the RP shall be a <B>[ * ]</B>
program, many aspects of which are <B>[</B> * <B>]</B> in nature. Therefore,
decisions about how to proceed within the workplan in Exhibit B are dependent
upon and shall be adjusted <B>[</B> * <B>]</B>.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="CENTER"><LI><BR>
<BR>
"RP MANAGEMENT"</LI></P>
<OL>

</B></FONT><P ALIGN="JUSTIFY"><LI>The management of the RP shall be the
responsibility of two committees: the Joint Management Team (hereafter "JMT");
and the Joint Research Team (hereafter "JRT").</LI></P>
<P ALIGN="JUSTIFY"><LI>The JMT shall be composed of up to three (3), with a
minimum of two (2), members from each Party. Each Party shall have one (1) vote.
The JMT shall meet at least two (2) times a year. The JMT shall consist of
senior members from each Party authorized to make decisions with respect to
matters including, but not limited to, setting research goals, allocating staff
to specific programs, determining program expansions, determining and granting
milestones, resolving disputes, and making strategic decisions. The JMT shall
also have responsibility for establishing and monitoring the intellectual
property strategy and portfolio developed by the collaboration. Dispute
resolution shall be determined pursuant to Section 19.1.</LI></P>
<P ALIGN="JUSTIFY"><LI>The JRT shall be composed of up to three (3) members,
with a minimum of two, (2) scientists from each Party who are responsible in
their respective organizations for day to day management of the RP. Each Party
shall have one (1) vote. The JRT shall meet at least quarterly to review the
results and help direct the RP. Dispute resolution shall be determined pursuant
to Section 19.1.</LI></P>
<P ALIGN="JUSTIFY"><LI>The JRT shall report to the JMT and at least one (1)
member from each Party shall be a member of both the JMT and the JRT.</LI></P>
<P ALIGN="JUSTIFY"><LI>The members of the JMT and members of the JRT shall
communicate with each other as often as necessary. Communications may be by
telephone or televideo conferences or both, monthly, or on some occasions more
often than monthly. Each Party shall be responsible for its own expenses in
conducting its activities under this Agreement.</LI></P>
<P ALIGN="JUSTIFY"><LI>Minutes shall be prepared for all meetings of the JMT and
JRT. The Parties shall approve JMT and JRT minutes. Minutes of these meetings
shall be reviewed, revised, if necessary, and approved by both Parties within
ten (10) business days of receipt of the first draft.</LI></P>
<P ALIGN="JUSTIFY"><LI>An Intellectual Property Committee (hereafter "IPC")
shall be formed with representation from each Party. The IPC shall make reports
to the JMT. Responsibilities of the IPC will include, but not be limited to,
review of materials for publication that arise during or from the RP. The IPC
shall review requests and make recommendations to the JMT as to whether any
information may be published. The recommendation shall be consistent with the
protection of the intellectual property generated under this Agreement. The IPC
shall have at least one representative familiar with intellectual property in
the area of the RP, preferably at least one (1) patent attorney, from each
Party.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="CENTER"><LI><BR>
<BR>
"RP RESOURCES"</LI></P>
<OL>

</B></FONT><P ALIGN="JUSTIFY"><LI>EXEL shall provide a core group of <B>[ *
]</B> Full-Time Equivalent (hereafter "FTE") scientists to work directly on the
RP. DAS shall provide funding for this core group at the rate of <B>[</B> *
<B>]</B> U.S. Dollars <B>[</B> * <B>]</B> per FTE for the <B>[</B> * <B>]</B>
year, <B>[</B> * <B>]</B> U.S. Dollars <B>[ * <FONT SIZE=4>]</B></FONT> per FTE
for the <B>[</B> * <B>]</B> year, and <B>[</B> * <B>]</B> U.S. Dollars <B>[ *
]</B> per FTE for the <B>[</B> * <B>]</B> year. EXEL shall ensure that this core
group shall be supported by staff with expertise in required areas. DAS shall
make each year's FTE funding payments in four (4) quarterly installments.
However, a first quarterly payment of <B>[</B> * <B>]</B> U.S. Dollars <B>[ *
]</B> shall be made within <B>[ * ]</B> days of the Effective Date; this payment
shall be a credit against the FTE's expended during the first quarter of this
Agreement and any overpayment by DAS shall be a credit for the second quarter
payment. EXEL shall inform DAS of any such overpayment with the second quarter
invoice; the remaining quarterly payments will be due within <B>[ * ]</B> days
of receiving an invoice from EXEL reasonably detailing the number of FTEs used
in that quarter. DAS shall provide funding for a minimum of <B>[ * ]</B> months.
Thereafter, DAS shall provide EXEL <B>[ * ]</B> months' notice should DAS decide
that this Agreement should be terminated based on a lack of advancement of the
RP as set forth in the workplan in Exhibit B. Other than for reasons of lack of
advancement of the RP or unremedied material breach, DAS shall have no right to
terminate this Agreement prior to the end of the three (3) year term.</LI></P>
<P ALIGN="JUSTIFY"><LI>Upon written notice to EXEL, DAS shall have the right to
increase total FTEs from <B>[ * ]</B> to <B>[ * ]</B> in the <B>[</B> * <B>]</B>
years, subject to DAS determining that there are additional goals DAS wishes to
accomplish during those years that could not be accomplished with <B>[ * ]</B>
FTEs. This increase would be at <B>[</B> * <B>]</B> following the JRT and JMT
review of the <B>[</B> * <B>]</B> year's accomplishments. However, <B>[</B> *
<B>]</B>, the minimum <B>[ * ]</B> FTE commitment shall remain in effect until
such time that this Agreement terminates or expires.</LI></P>
<P ALIGN="JUSTIFY"><LI>Nothing in this Agreement shall require DAS to provide
funding for support of the RP in excess of the guaranteed funding that is set
forth in this Article IV, unless DAS agrees to do so in a separate written
document.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="CENTER"><LI><BR>
<BR>
"RESEARCH MILESTONES"</LI></P>
<OL>

</B></FONT><P ALIGN="JUSTIFY"><LI>EXEL shall deliver Research Milestones. The
JMT in collaboration with the JRT will be responsible for defining a research
plan using available biological and molecular data to assess the quality of a
molecular target site relative to the definition in Section 1.15. EXEL and DAS
will jointly have the responsibility to answer questions pertaining to quality
in advancing Cognate Targets to HQMT site as outlined in Exhibit B. The
specifications for each Research Milestone will be set by the JMT.</LI></P>
<P ALIGN="JUSTIFY"><LI>DAS shall use Research Milestones to identify fungicides
and herbicides that interact with the Cognate Target Site or High Quality
Molecular Target Site.</LI></P>
<P ALIGN="JUSTIFY"><LI>Within <B>[ * ]</B> year of EXEL delivering a Research
Milestone, DAS shall inform EXEL whether it desires to pursue further research
utilizing this Research Milestone in DAS's Field. During this <B>[ * <FONT SIZE=4>]
</B></FONT> year period, EXEL shall not grant any third party any rights
to the Cognate Target or HQMT Site associated with that Research Milestone,
without first allowing DAS an opportunity to obtain exclusive rights in DAS's
Field under the terms and conditions in this Agreement.</LI></P>
<OL>

<P ALIGN="JUSTIFY"><LI>If DAS does not desire to pursue further work with this
Research Milestone on an exclusive basis, the Cognate Target or HQMT Site
associated with this Research Milestone shall be deemed a Non-Exclusive Target
Site (hereafter "NET"). If DAS desires to pursue further work with this Research
Milestone on an exclusive basis, the Cognate Target or HQMT Site associated with
this Research Milestone shall be deemed a Limited-Exclusive Target Site
(hereafter "LET").</LI></P>
<P ALIGN="JUSTIFY"><LI>If DAS, after further work on a LET, decides that it does
not desire to perform any additional work on such LET on such exclusive basis,
such LET shall be reclassified as a NET.</LI></P></OL>

<P ALIGN="JUSTIFY"><LI>DAS shall have a period of <B>[ * ]</B> years from the
date in which DAS determines that the Cognate Target or HQMT Site associated
with a Research Milestone is a LET where EXEL shall not perform, <B>[ * ]</B>
any work <B>[</B> * <B>]</B> for such Cognate Target or HQMT Site, for any third
party. However, EXEL <B>[ * ]</B> to a third party provided such <B>[</B> *
<B>]</B> arose from Independent Research performed on behalf of such third party
by EXEL.</LI></P>
<P ALIGN="JUSTIFY"><LI>DAS shall pay EXEL <B>[</B> * <B>]</B> U.S. Dollars <B>[
* ]</B> within <B>[ * ]</B> days of a Research Milestone being deemed a LET,
which shall be the sole consideration for the <B>[</B> * <B>]</B> period of
limited exclusivity for each LET. DAS shall provide EXEL with written annual
updates concerning its diligence with each LET.</LI></P>
<P ALIGN="JUSTIFY"><LI>DAS shall have the right to have a maximum of <B>[ *
]</B> LETs during the first <B>[</B> * <B>]</B> of this Agreement. DAS can have
these LETs running concurrently. If a Research Milestone is deemed a LET more
than <B>[ * ]</B> year after the Effective Date but less than <B>[</B> *
<B>]</B> after the Effective Date, the <B>[ * ]</B> period of limited
exclusivity shall run past the end of the first <B>[ * ]</B> years of this
Agreement without further compensation to EXEL besides the payment in Section
5.5. After the first <B>[ * ]</B> years of this Agreement the number of LETs and
the amount of the payment for the <B>[ * ] </B>period of limited exclusivity for
each of these LETs, shall have to be negotiated.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="CENTER"><LI><BR>
<BR>
"MILESTONE PAYMENTS"</LI></P>
<OL>

</B></FONT><P ALIGN="JUSTIFY"><LI>DAS shall pay <B>[</B> * <B>]</B> U.S. Dollars
<B>[ * ]</B> to EXEL within <B>[ * ]</B> days of delivery of each Research
Milestone. Only one (1) Research Milestone payment is due for any one molecular
target site.</LI></P>
<P ALIGN="JUSTIFY"><LI>DAS shall pay to EXEL the following amounts for
achievement of milestones:</LI></P>
<OL>

<P ALIGN="JUSTIFY"><LI>For each FH, which was identified using a Research
Milestone, and which DAS decides to enter into Predevelopment, DAS shall pay
EXEL <B>[</B> * <B>]</B> U.S. Dollars <B>[ * ]</B> within <B>[ * </B><FONT SIZE=4>]
</FONT> days of the decision to enter into Predevelopment, which
decision DAS shall provide by written notice to EXEL;</LI></P>
<P ALIGN="JUSTIFY"><LI>For each FH, which was identified using a Research
Milestone, and which DAS decides to enter into Development, DAS shall pay EXEL
<B>[</B> * <B>]</B> U.S. Dollars <B>[ * ]</B> within <B>[ * ]</B> days of the
decision to enter into Development, which decision DAS shall provide by written
notice to EXEL;</LI></P>
<P ALIGN="JUSTIFY"><LI>For each FH, which was identified using a Research
Milestone, and which becomes an Approved FH, DAS shall pay EXEL <B>[</B> *
<B>]</B> U.S. Dollars <B>[ * ]</B> within <B>[ * ]</B> days of the first Major
Country approval which DAS shall confirm by written notice to
EXEL.</LI></P></OL>

<P ALIGN="JUSTIFY"><LI>DAS shall provide EXEL with a progress report, on a
<B>[</B> * <B>]</B> basis, outlining the status of each Research Milestone or
each FH, which was identified using a Research Milestone, including anticipation
of entering Predevelopment, Development, and/or Approved FH.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="CENTER"><LI><BR>
<BR>
"ROYALTY PAYMENTS"</LI></P>
<OL>

</B></FONT><P ALIGN="JUSTIFY"><LI>For each FH, DAS shall pay EXEL a royalty
based on TNS as follows: </LI></P>
<OL>

<P ALIGN="JUSTIFY"><LI>in a country where the composition of a certain FH or the
use of the FH as a fungicide or herbicide is protected by a Patent derived from
work conducted on the RP, and the TNS for such FH is greater than <B>[</B> *
<B>]</B> U.S. Dollars <B>[ * ]</B> but less than, or equal to, <B>[</B> *
<B>]</B> U.S. Dollars <B>[ * ]</B> per calendar year, the royalty for such FH,
sold in that country, shall be <B>[ * ]</B> percent of CTNS for such country;
</LI></P>
<P ALIGN="JUSTIFY"><LI>in a country where the composition of a certain FH or the
use of the FH as a fungicide or herbicide is protected by a Patent derived from
work conducted on the RP, and the TNS for such FH is greater than <B>[</B> *
<B>]</B> U.S. Dollars <B>[ * ]</B> but less than, or equal to, <B>[</B> *
<B>]</B> U.S. Dollars <B>[ * ]</B> per calendar year, the royalty for such FH,
sold in that country, shall be <B>[ * ]</B> percent of CTNS for such
country;</LI></P>
<P ALIGN="JUSTIFY"><LI>in a country where the composition of a certain FH or the
use of the FH as a fungicide or herbicide is protected by a Patent derived from
work conducted on the RP, and the TNS for such FH is greater than <B>[</B> *
<B>]</B> U.S. Dollars <B>[ * ]</B> per calendar year, the royalty for such FH,
sold in that country, shall be <B>[ * ]</B> percent of CTNS for such
country;</LI></P>
<P ALIGN="JUSTIFY"><LI>in a country where the composition of a certain FH or the
use of the FH as a fungicide or herbicide is not protected by a Patent, and the
TNS for such FH is greater than <B>[</B> * <B>]</B> U.S. Dollars <B>[ * ]</B>
but less than, or equal to, <B>[</B> * <B>]</B> U.S. Dollars <B>[ * ]</B> per
calendar year, the royalty for such FH, sold in that country, shall be <B>[ *
]</B> percent of CTNS for such country; </LI></P>
<P ALIGN="JUSTIFY"><LI>in a country where the composition of a certain FH or the
use of the FH as a fungicide or herbicide is not protected by a Patent, and the
TNS for such FH is greater than <B>[</B> * <B>]</B> U.S. Dollars <B>[ * ]</B>
but less than, or equal to, <B>[</B> * <B>]</B> U.S. Dollars <B>[ * ]</B> per
calendar year, the royalty for such FH, sold in that country, shall be <B>[ *
]</B> percent of CTNS for such country;</LI></P>
<P ALIGN="JUSTIFY"><LI>in a country where the composition of a certain FH or the
use of the FH as a fungicide or herbicide is not protected by a Patent, and the
TNS for such FH is greater than <B>[</B> * <B>]</B> U.S. Dollars <B>[ * ]</B>
per calendar year, the royalty for such FH, sold in that country shall be <B>[ *
]</B> percent of CTNS for such country.</LI></P>
<P ALIGN="JUSTIFY"><LI>DAS shall pay the royalty set forth in Sections 7.1.1-
7.1.6 for a period of <B>[ * ]</B> years from the date DAS receives an Approved
FH, or for the life of any Patents that cover the <B>[</B> * <B>]</B>, whichever
is longer. After all Patents that cover the <B>[</B> * <B>]</B> become
unenforceable in a country, for any reason, any additional royalty due (because
the time period that DAS paid a royalty under Sections 7.1.1-7.1.3 in that
country was less than <B>[</B> * <B>]</B> years), in that country, shall be
calculated in accordance with Sections 7.1.4-7.1.6 (and this royalty shall be
paid until the time period that DAS paid a royalty under Section 7.1.1-7.1.6
equals <B>[ * ]</B> years.</LI></P></OL>

<P ALIGN="JUSTIFY"><LI>If one (1), or more, third parties contribute to DAS's
identification of a FH prior to Predevelopment, the royalties due under Section
7.1 shall be divided equally among EXEL and such third parties. In any case,
only a maximum of <B>[ * ]</B> additional third parties shall share in such
royalties. In the event DAS decides to enter into an additional third party
business relationship under which such third party would collaborate with DAS in
the areas of combinatorial chemistry or structure-based design, then <B>[</B> *
<B>]</B>.</LI></P>
<P ALIGN="JUSTIFY"><LI>Prior to the identification of a Cognate Target Assay or
HQMT Site, DAS may attempt to use <B>[</B> * <B>]</B> provided by EXEL to
discover fungicides and herbicides. If DAS uses <B>[</B> * <B>]</B>, any
patentable fungicides or herbicides identified by DAS shall be considered to be
FHs for purposes of section 6.2 milestone payments and shall be considered to be
FHs for royalty payments under 7.1, however, all such royalty payments will be
reduced <B>[ * ]</B> percent. <B>[</B> * <B>]</B>, all such royalty payments,
thereafter, shall be at <B>[ * ]</B> percent, as provided for in Section 7.1 and
in addition EXEL shall be paid the milestone payment in accordance with Section
6.1 for such Research Milestone.</LI></P>
<P ALIGN="JUSTIFY"><LI>DAS shall pay only one (1) royalty for each FH sold and
that royalty is calculated using Section 7.1, and such royalty is then subject
to modification in accordance with Section 7.2 or 7.3 if required.</LI></P>
<P ALIGN="JUSTIFY"><LI>All royalties due under this Article 7 shall be paid
<B>[</B> * <B>]</B>, on a country-by-country basis, within <B>[ * ]</B> days of
the end of the relevant <B>[</B> * <B>]</B>.</LI></P>
<P ALIGN="JUSTIFY"><LI>Each royalty payment shall be accompanied by a statement
stating the number, description, and CTNS in each country of each Product sold
during the relevant <B>[</B> * <B>]</B>.</LI></P>
<P ALIGN="JUSTIFY"><LI>All payments due under this Agreement to EXEL shall be
made by bank wire transfer in immediately available funds to an account
designated by EXEL. All payments hereunder shall be made in U.S.
Dollars.</LI></P>
<P ALIGN="JUSTIFY"><LI>EXEL shall pay any and all taxes levied on account of all
payments it receives under this Agreement. If laws or regulations require that
taxes be withheld, DAS will (i) deduct those taxes from the remittable payment,
(ii) pay the taxes to the proper taxing authority, and (iii) send evidence of
the obligation together with proof of tax payment to EXEL within <B>[ * ]</B>
days following that tax payment.</LI></P>
<P ALIGN="JUSTIFY"><LI>DAS shall keep complete, true and accurate books of
account and records for the purpose of determining the payments to be made under
this Agreement. Such books and records shall be kept for at least three (3)
years following the end of the calendar year to which they pertain. Such records
will be open for inspection during such three year period by independent
accountants, jointly agreed to by DAS and EXEL, solely for the purpose of
verifying payment statements hereunder. Such inspections shall be made no more
than once each calendar year, at reasonable times and on reasonable notice.
Inspections conducted under this Section 7.9 shall be at the expense of EXEL,
unless a variation or error producing the greater of (i) an increase exceeding
five (5) percent of the royalty amount or (ii) <B>[</B> * <B>]</B> U.S. Dollars
<B>[ * ]</B>, stated for the period covered by the inspection, is established in
the course of such inspection, whereupon all costs relating to the inspection
for such period and any unpaid amounts (plus interest) that are discovered will
be paid promptly by DAS. &#9;&#9;</LI></P>
<P ALIGN="JUSTIFY"><LI>If a FH is sold in a country where there is no Patent
that protects the composition of the FH, or there is no Patent that protects the
use of the FH as a fungicide or herbicide, and if subsequent to these sales of
such FH a Patent issues that does protect the composition of the FH, or a Patent
issues that does protect the use of the FH as a fungicide or herbicide, then DAS
shall recalculate the royalties paid to EXEL on such sales before such Patent
issued and shall pay EXEL for such sales as if the Patent issued before such
sales, taking into account any payments already made to EXEL for such
sales.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="CENTER"><LI><BR>
<BR>
"DISCLOSED INFORMATION"</LI></P>
<OL>

</B></FONT><P ALIGN="JUSTIFY"><LI>All materials and information, not generated
under this Agreement, that is or has been disclosed by one Party (the
"Disclosing Party") (hereafter "Disclosed Information") shall be treated by the
other Party (the "Receiving Party") as confidential. The Receiving Party shall
hold in confidence and not publish, disclose, or allow any third party access
to, nor use for any purpose other than that authorized herein, any Disclosed
Information without the Disclosing Party's prior written consent. This
obligation of confidentiality shall remain in effect throughout the term of this
Agreement and for five (5) years from the date of termination or expiration of
this Agreement or the termination or expiration of any extension hereof.
However, this obligation shall not apply to:</LI></P>
<OL>

<P ALIGN="JUSTIFY"><LI>Disclosed Information that the Receiving Party can show
was in its possession prior to disclosure hereunder and which was not received
from Disclosing Party under obligation of secrecy;</LI></P>
<P ALIGN="JUSTIFY"><LI>Disclosed Information that the Receiving Party can show
was available to the public, provided it is available to the public through no
fault of the Receiving Party;</LI></P>
<P ALIGN="JUSTIFY"><LI>Disclosed Information that the Receiving Party can show
was received from a third party unrelated to the Disclosing Party which had a
right to disclose same; and</LI></P>
<P ALIGN="JUSTIFY"><LI>Disclosed Information that is required to be disclosed by
operation of law, governmental regulation, or court order, provided the
Receiving Party gives the Disclosing Party notice of such disclosure prior to
making such disclosure, and Receiving Party uses all reasonable efforts to
secure confidential protection for such Disclosed Information.</LI></P></OL>

<P ALIGN="JUSTIFY"><LI>Upon termination of this Agreement, or otherwise upon
request from the Disclosing Party, the Receiving Party shall promptly return to
the Disclosing Party all Disclosed Information and additionally shall
permanently delete all electronically, or otherwise stored, Disclosed
Information from all of the Receiving Party's systems containing same, except
one hard copy may be maintained by the Receiving Party in order to determine its
responsibilities under this Agreement.</LI></P>
<P ALIGN="JUSTIFY"><LI>Either Party may make known the existence of this
Agreement, however, neither Party shall disclose any details of this Agreement
or the RP, subject to Section 10.1.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="CENTER"><LI><BR>
<BR>
"CONFIDENTIALITY"</LI></P>
<OL>

</B></FONT><P ALIGN="JUSTIFY"><LI>All information generated by either Party
pursuant to this Agreement shall be "Confidential Information" (hereafter
"Generated Information"). A Party receiving Generated Information of the other
Party will (i) maintain in confidence such Generated Information to the same
extent such Party maintains its own proprietary information, (ii) not disclose
such Generated Information in DAS's Field to any third party without prior
written consent of the other Party, and (iii) not use such Generated Information
for any purpose except those permitted by this Agreement. This obligation of
confidentiality shall remain in effect for five (5) years from the date of
termination or expiration of this Agreement or the termination or expiration of
any extension hereof. This Section does not apply to the submission or
prosecution of patent applications. However, this obligation shall not apply
to:</LI></P>
<OL>

<P ALIGN="JUSTIFY"><LI>Generated Information that a Party can show was in its
possession prior to generation hereunder and which was not received from a third
party under obligation of secrecy;</LI></P>
<P ALIGN="JUSTIFY"><LI>Generated Information that a Party can show was available
to the public, provided it is available to the public through no fault of such
Party;</LI></P>
<P ALIGN="JUSTIFY"><LI>Generated Information that a Party can show was received
from a third party unrelated to that Party which had a right to disclose same;
and</LI></P>
<P ALIGN="JUSTIFY"><LI>Generated Information that is required to be disclosed by
operation of law, governmental regulation, or court order, provided the
disclosing Party gives the other Party notice of such disclosure prior to making
such disclosure, and the disclosing Party uses all reasonable efforts to secure
confidential protection for such Generated Information.</LI></P>
<P ALIGN="JUSTIFY"><LI>Generated Information in DAS's Field that is generated as
a result of the work performed by EXEL under the RP shall be co-owned by DAS and
EXEL.</LI></P></OL>
</OL>

<B><FONT COLOR="#0000ff"><P ALIGN="CENTER"><LI><BR>
<BR>
"PUBLICITY"</LI></P>
<OL>

</B></FONT><P ALIGN="JUSTIFY"><LI>The Parties agree that the public announcement
of the execution of this Agreement shall be substantially in the form of the
press release attached as Exhibit C. Any other publication, news release or
other public announcement relating to this Agreement or to the performance
hereunder, shall first be reviewed and approved by both Parties; provided,
however, that any disclosure which is required by law as advised by the
disclosing Party's counsel may be made by making prompt notice of such legally
required disclosure and to the extent practicable shall provide the other Party
an opportunity to comment on the proposed disclosure.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="CENTER"><LI><BR>
<BR>
"PUBLICATIONS"</LI></P>
<OL>

</B></FONT><P ALIGN="JUSTIFY"><LI>Neither Party shall publish or present the
results of studies carried out under this Agreement without the opportunity for
prior review and approval by the other Party, such approval not to be
unreasonably withheld. Subject to Section 10.1, each Party agrees to provide the
other Party the opportunity to review any proposed abstracts, manuscripts or
presentations (including verbal presentations) which relate to any Cognate
Target or HQMT Site at least thirty (30) days prior to its intended submission
for publication and agrees, upon request, not to submit any such abstract or
manuscript for publication until the other Party is given a reasonable period to
secure patent protection for any material in such publication which such Party
believes to be patentable. Any disputes between the Parties regarding delaying a
publication or presentation to permit filing of a patent application shall be
referred to the JMT. This section does not apply to the submission or
prosecution of patent applications.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="CENTER"><LI><BR>
<BR>
"INTELLECTUAL PROPERTY"</LI></P>
<OL>

</B></FONT><P ALIGN="JUSTIFY"><LI>Each Party shall own the entire right, title
and interest in and to any and all of its Pre-Existing Technologies (which shall
mean any technologies existing before the Effective Date) or Sole Inventions,
and Patents covering such Pre-Existing Technologies or Sole Inventions. Each
Party shall retain control over and bear all expenses associated with the
filing, prosecution and maintenance of all Patents claiming Pre-existing
Technologies or Sole Inventions.</LI></P>
<P ALIGN="JUSTIFY"><LI>The JRT shall prepare a written report in conjunction
with the IPC within <B>[ * ]</B> days of the end of each quarter describing any
Sole Inventions, Joint Inventions, and Generated Information arising during the
prior quarter. Such reports shall be submitted to the JMT not less than once
every six (6) months. The IPC, in consultation with the JMT, shall decide
whether to file a patent application for a Joint Invention.</LI></P>
<P ALIGN="JUSTIFY"><LI>Under the direction of the JMT, the IPC shall supervise
and direct the filing, prosecution and maintenance of all patent applications
and Patents covering Joint Inventions. DAS shall bear the expenses associated
with the filing, prosecution (including any interferences, reissue proceedings
and reexaminations) and maintenance of all patent applications and Patents on
Joint Inventions relating to DAS's Field. <B>[</B> * <B>]</B> shall bear the
expenses associated with the filing, prosecution (including any interferences,
reissue proceedings and reexaminations) and maintenance of all patent
applications and Patents on Joint Inventions relating to EXEL's Field and EXEL's
Human Use Field. A Party electing not to pay any such costs and expenses with
respect to a patent application or Patent covering a Joint Invention must
provide the other Party with not less than <B>[ * ]</B> months notification
before any relevant deadline. If the other Party assumes the expenses associated
with the patent application or Patent, such Party will thereby become the sole
owner of the Joint Invention and the patent application or Patents claiming such
Joint Invention and any license rights regarding such intellectual property
shall be terminated.</LI></P>
<P ALIGN="JUSTIFY"><LI>Each Party shall have the sole right, but not the
obligation, to institute, prosecute or control any action or proceeding with
respect to infringement by a third party of one or more Patents covering the
Party's Pre-Existing Technologies or Sole Inventions.</LI></P>
<P ALIGN="JUSTIFY"><LI>Either Party not wishing to file a patent application
arising from the RP, when the other Party wishes to file an application, shall
cooperate with the Party that wishes to file an application by providing the
necessary information for the application and executing necessary documents for
the application to the extent that it pertains to the filing Party's Field or
Fields.</LI></P>
<P ALIGN="JUSTIFY"><LI>Subject to rights of exclusivity provided for under
Sections 5.3 and 5.4, EXEL shall have the exclusive right to use Generated
Information outside DAS's Field.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="CENTER"><LI><BR>
<BR>
"LICENSES"</LI></P>
<OL>

</B></FONT><P ALIGN="JUSTIFY"><LI>Subject to the terms and conditions of this
Agreement, EXEL hereby grants, and agrees to grant, a non-exclusive, worldwide,
royalty-bearing (as determined in accordance with Article 7) license under any
intellectual property rights relating to DAS's Field that EXEL now owns , or
hereafter acquires, for DAS, its Affiliates and licensees, to use any of the
Generated Information in DAS's Field and to make, use, import or sell any FH.
DAS covenants that it will not use a CT Site or Cognate Target or HQMT Site for
performing independent research in the field of <B>[ * ]</B>. In any event, DAS
acknowledges and agrees that EXEL has the right to a CT Site or Cognate Target
or HQMT Site for use in EXEL's Field.</LI></P>
<P ALIGN="JUSTIFY"><LI>During the term of the RP, EXEL grants to DAS a right to
negotiate a <B>[</B> * <B>]</B> license to <B>[</B> * <B>]</B> during the course
of the collaboration under the RP, under terms and conditions to be negotiated.
In the event EXEL wants to grant an <B>[</B> * <B>]</B> license to <B>[</B> *
<B>]</B> during the course of the collaboration under the RP, EXEL shall notify
DAS in writing of its intent to grant an <B>[</B> * <B>]</B> license and shall
provide DAS with all relevant information concerning such <B>[</B> * <B>]</B>
and DAS shall have <B>[ * ]</B> days to notify EXEL of its interest in pursuing
a business relationship concerning this <B>[</B> * <B>]</B> and an additional
<B>[ * ]</B> days after DAS gives notice to EXEL for DAS and EXEL to come to an
agreement concerning further development of such <B>[</B> * <B>]</B> by
DAS.</LI></P>
<P ALIGN="JUSTIFY"><LI>DAS hereby grants, and agrees to grant, EXEL a fully
paid-up, nonexclusive license, under any intellectual property rights now owned,
or acquired during the term of this Agreement, for EXEL to conduct its research
obligations under this Agreement in a manner consistent with Article
14.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="CENTER"><LI><BR>
<BR>
"DAS's HISTORICAL COMPOUNDS"</LI></P>
<OL>

                                                                                   </B></FONT><P ALIGN="JUSTIFY"><LI>DAS shall provide EXEL with information
regarding DAS HCs, on reasonable conditions specified by DAS. DAS shall allow
EXEL to use the DAS HCs to screen for <B>[</B> * <B>]</B>. EXEL shall have the
right to receive up to <B>[</B> * <B>]</B> U.S. Dollars in value (the cumulative
value as calculated as follows) of DAS HCs. The cost of compounds from DAS's
Historical Compound collection that are not from third parties shall be <B><FONT SIZE=3>
[ * </FONT>]</B> per mg. The cost of compounds from DAS's combinatorial
chemistry compound collection shall be <B>[ * ]</B> per mg. The cost of
compounds from DAS's Historical Compound collection that are from third parties
shall be <B>[ * ]</B> per mg. Each compound sent to EXEL shall have <B>[ * ]</B>
added to the cost to cover handling. DAS will supply EXEL with between <B>[ *
]</B> mg of each compound requested. However, in any case, EXEL shall have
access to up to <B>[ * ]</B> compounds during the first <B>[ * ]</B> years of
this Agreement; and access to more than <B>[ * ]</B> compounds shall have to be
negotiated. Subject to their availability, EXEL shall have the right to purchase
additional quantities of selected compounds, in the range of <B>[ * ]</B> mg, at
the <B>[</B> * <B>]</B> price per mg and cost of handling, for confirmatory
tests and secondary biological and biological assays. DAS will make reasonable
efforts to supply EXEL with chemical information (e.g., original source of the
compound, method of synthesis, physical properties, etc.) for DAS HCs that may
be required for EXEL to follow-up on biological activity discovered in EXEL
assays.</LI></P>
<P ALIGN="JUSTIFY"><LI>If EXEL desires to commercialize <B>[ * ]</B> such
commercialization shall be subject to an agreement for world-wide rights between
EXEL and DAS which will be negotiated in good faith.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="CENTER"><LI><BR>
<BR>
"TERM"</LI></P>
<OL>

</B></FONT><P ALIGN="JUSTIFY"><LI>Unless this Agreement is terminated earlier in
accordance with the provisions of this Agreement, the RP and the Parties'
collaboration under this Agreement shall be for a minimum term of three (3)
years and DAS shall have an option to renew <B>[</B> * <B>]</B> thereafter. If
DAS elects to exercise its option to renew, DAS shall provide EXEL with written
notice of its election at least <B>[ * ]</B> days prior to the expiration of the
initial three (3) year term, or extended <B>[ * ]</B> year term.</LI></P>
<P ALIGN="JUSTIFY"><LI>The rights and obligations set forth in this Agreement in
Articles 5, 6, 7, 8, 9, 10, 11, 12 and 13 shall survive expiration or
termination of this Agreement.</LI></P>
<P ALIGN="JUSTIFY"><LI>Any amendment to this Agreement shall be in writing and
signed by the Parties.</LI></P>
<P ALIGN="JUSTIFY"><LI>Should EXEL fail to meet the material objectives of this
RP, and <B>[</B> * <B>]</B>, then DAS upon reasonable written notice of such
intention to EXEL, shall have the right to terminate this Agreement upon <B>[ *
]</B> business days prior written notice; subject to the condition set forth in
Section 4.1 that DAS shall provide funding for at least <B>[ * ]</B> months
after the Effective Date and shall thereafter provide <B>[ * ]</B> months notice
if DAS wants to terminate this Agreement.</LI></P>
<P ALIGN="JUSTIFY"><LI>Should DAS fail to meet its payment obligations under
this Agreement, and if reasonable efforts by the Parties under Section 19.1 fail
to resolve the issues in regards to such payments, then EXEL upon reasonable
written notice of such intention to DAS, shall have the right to terminate this
Agreement upon ten (10) business days prior written notice. </LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="CENTER"><LI><BR>
<BR>
"SEVERABILITY, INTEGRATION, AND ALTERATION"</LI></P>
<OL>

</B></FONT><P ALIGN="JUSTIFY"><LI>In the event any provision of this Agreement
should be held invalid, the Parties agree to use reasonable efforts to achieve a
mutually acceptable provision which is in accordance with the commercial spirit
and intent of this Agreement, so that same becomes valid and the remaining part
of this Agreement shall not be materially affected thereby.</LI></P>
<P ALIGN="JUSTIFY"><LI>This Agreement constitutes the entire agreement between
the Parties on the subject matter hereof, and all prior negotiations,
agreements, understandings, and the (i) Letter of Intent entered into March 13,
2000 and (ii) Mutual Non-Disclosure Agreement entered into on August 20, 1998,
and Amendments thereto entered into on July 7, 1999, and December 10, 1999, are
expressly superseded and terminated hereby.</LI></P>
<P ALIGN="JUSTIFY"><LI>Neither Party may assign or transfer this Agreement or
any rights or obligations herein without the prior written consent of the other,
except that a Party may make an assignment of this Agreement without the other
Party's consent, to an Affiliate or to a successor to all or substantially all
of the agriculture business of such Party, whether in a merger, sale of stock,
sale of assets or other similar transaction, provided that any such permitted
successor or assignee of rights and/or obligations herein shall first, either by
operation of law or in writing to the other Party, expressly assume performance
of such rights and/or obligations. Any permitted assignment shall be binding on
the successors of the assigning Party. Any assignment or attempted assignment by
either Party in violation of the terms of this Section 16.3 shall be null and
void and of no legal effect.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="CENTER"><LI><BR>
<BR>
"NOTICES"</LI></P>
<OL>

</B></FONT><P ALIGN="JUSTIFY"><LI>Any notices required or permitted hereunder
shall be given to the appropriate Party at the address specified below or at
such other address as the Party shall specify in writing. Such notice shall be
deemed given upon personal delivery to the appropriate address or sent by
certified or registered mail, three (3) days after the date of
mailing.</LI></P></OL>

<P ALIGN="JUSTIFY">For EXEL&#9;Senior Vice President, Business
Development&#9;</P>
<P ALIGN="JUSTIFY">Exelixis, Inc.</P>
<P ALIGN="JUSTIFY">170 Harbor Way</P>
<P ALIGN="JUSTIFY">P.O.<B> </B>Box 511</P>
<P ALIGN="JUSTIFY">South San Francisco, CA 94083-0511</P>
<P ALIGN="JUSTIFY">With a copy to:&#9;Vice President, Legal Affairs</P>
<P ALIGN="JUSTIFY">Exelixis, Inc.</P>
<P ALIGN="JUSTIFY">170 Harbor Way</P>
<P ALIGN="JUSTIFY">P.O. Box 511</P>
<P ALIGN="JUSTIFY">South San Francisco, CA 94083-0511</P>
<P ALIGN="JUSTIFY">For DAS:&#9;Vice President, Research and Development</P>
<P ALIGN="JUSTIFY">Dow AgroSciences LLC</P>
<P ALIGN="JUSTIFY">9330 Zionsville Road</P>
<P ALIGN="JUSTIFY">Indianapolis, IN 46268</P>
<P ALIGN="JUSTIFY">With a copy to:&#9;General Patent Counsel</P>
<P ALIGN="JUSTIFY">Dow AgroSciences LLC</P>
<P ALIGN="JUSTIFY">9330 Zionsville Road</P>
<P ALIGN="JUSTIFY">Indianapolis, IN 46268</P>
<P ALIGN="JUSTIFY">For invoices please send to:&#9;Dow AgroSciences LLC</P>
<P ALIGN="JUSTIFY">9330 Zionsville Road</P>
<P ALIGN="JUSTIFY">Indianapolis, IN 46268</P>
<P ALIGN="JUSTIFY">ATTN Accounts Payable</P>
<B><FONT COLOR="#0000ff"><P ALIGN="CENTER"><LI><BR>
<BR>
"GOVERNING LAW"</LI></P>
<OL>

</B></FONT><P ALIGN="JUSTIFY"><LI>Resolution of all disputes arising out of or
related to this Agreement or the performance, enforcement, breach or termination
of this Agreement and any remedies relating thereto, shall be governed by and
construed under the substantive laws of the State of Delaware, as applied to
agreements executed and performed entirely in the State of Delaware by residents
of the State of Delaware, without regard to conflicts of law
rules.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="CENTER"><LI><BR>
<BR>
"DISPUTE RESOLUTION"</LI></P>
<OL>

</B></FONT><P ALIGN="JUSTIFY"><LI>In the event of any controversy or claim
arising out of, relating to or in connection with any provision of this
Agreement, the Parties shall try to settle their differences amicably between
themselves first by referring the disputed matter to the respective heads of
research of each Party, and if not resolved by the research heads, by referring
the disputed matter to the respective Chief Executive Officers of each Party.
Either Party may initiate such informal dispute resolution by sending written
notice of the dispute to the other Party, and within twenty (20) days after such
notice, such representatives of the Parties shall meet for attempted resolution
by good faith negotiations. If such personnel are unable to resolve such dispute
within thirty (30) days of their first meeting of such negotiations, either
Party may seek to have such dispute resolved in any United States federal court
of competent jurisdiction and appropriate venue. The Parties hereby consent to
jurisdiction in the United States federal courts. If, notwithstanding such
consent, United States federal courts would not have proper jurisdiction over a
dispute, then such dispute may be submitted to a state court in the United
States with proper jurisdiction and venue. The Parties agree that, except as
provided in Section 12, any dispute under this Agreement shall be submitted
exclusively to a state or federal court in the United States.</LI></P></OL>
</OL>

<P ALIGN="JUSTIFY">The Parties hereby execute this Agreement by their respective
duly authorized representatives as of the date shown below.</P>
<B><P ALIGN="JUSTIFY">Exelixis Inc.&#9;&#9;Dow AgroSciences LLC</P>
</B><P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">By: <U>/s/ Lloyd Kunimoto&#9;</U>&#9;By:  <U>/s/ Charles
Fischer&#9;</P>
</U><P ALIGN="JUSTIFY">Title: <U>Sr. Vice President, Business
Development</U>&#9;Title:  <U>President / CEO Dow Agro&#9;</P>
</U><P ALIGN="JUSTIFY">Date:<FONT FACE="Arial"> </FONT><U>July 11,
2000&#9;</U>&#9;Date:  <U>July 10, 2000&#9;</P>
</U><B><P ALIGN="CENTER">EXHIBIT A1</P>
</B><P ALIGN="JUSTIFY">Exhibit A1 - To determine the Adjusted Net Sales for a
Combination Product when the Combination Product contains a FH and another AI
where the FH is sold as a Stand-Alone Product and the other AI is sold as a
stand-alone product, the formula for calculating Adjusted Net Sales is as
follows:</P>
<B><P ALIGN="JUSTIFY">[ * ]</P>
</B><P ALIGN="JUSTIFY">For example,</P>

<UL>

<UL>
<P ALIGN="JUSTIFY"><LI>FH sold as a Stand-Alone Product at a use rate of X for
$15.</LI></P>
<P ALIGN="JUSTIFY"><LI>The other AI is sold as a stand alone product at use rate
Y for $10.</LI></P>
<P ALIGN="JUSTIFY"><LI>FH (at use rate X) and the other AI (at use rate Y) are
sold in a Combination Product for $30.</LI></P>
<B><P ALIGN="JUSTIFY"><LI>[</B> * <B>]</LI></P></UL>
</UL>

<P ALIGN="CENTER">EXHIBIT A2</P>
</B><P ALIGN="JUSTIFY">Exhibit A2 - To determine the Adjusted Net Sales of a
Combination Product when the Combination Product contains a FH and another AI
where the FH is not sold as a Stand-Alone Product, but the other AI is sold as a
stand alone product at the same use rate as in the Combination Product, the
formula for calculating Adjusted Net Sales is as follows:</P>
<B><P ALIGN="JUSTIFY">[</B> * <B>]</P>
</B><P ALIGN="JUSTIFY">For example,</P>

<UL>

<UL>
<P ALIGN="JUSTIFY"><LI>FH sold as a Combination Product with another AI at use
rate X.</LI></P>
<P ALIGN="JUSTIFY"><LI>The other AI at use rate X as a stand alone product sells
for $5 in same market as the Combination Product.</LI></P>
<P ALIGN="JUSTIFY"><LI>Combination Product sells for $15.</LI></P>
<B><P ALIGN="JUSTIFY"><LI>[</B> * <B>]</LI></P></UL>
</UL>

</B><P ALIGN="JUSTIFY"></P>
<B><P ALIGN="CENTER">EXHIBIT A3</P>
</B><P ALIGN="JUSTIFY">Exhibit A3 - To determine the Adjusted Net Sales for a
Combination Product when the Combination Product contains a FH and another AI
where the FH is not sold as a Stand-Alone Product, but the other AI is sold as a
stand alone product at twice the use rate as in the Combination Product, the
formula for calculating Adjusted Net Sales is as follows:</P>
<B><P ALIGN="JUSTIFY">[</B> * <B>]</B> </P>
<P ALIGN="JUSTIFY">For example,</P>

<UL>

<UL>
<P ALIGN="JUSTIFY"><LI>FH sold as a Combination Product with another AI at use
rate X.</LI></P>
<P ALIGN="JUSTIFY"><LI>The other AI at use rate <B>[</B> * <B>]</B> as a stand
alone product sells for $10 in same market as the Combination Product.</LI></P>
<P ALIGN="JUSTIFY"><LI>Combination Product sells for $15.</LI></P>
<B><P ALIGN="JUSTIFY"><LI>[</B> * <B>]</LI></P></UL>
</UL>

</B><P ALIGN="JUSTIFY"></P>
<B><P ALIGN="CENTER">EXHIBIT A4</P>
</B><P ALIGN="JUSTIFY">Exhibit A4 - To determine the Adjusted Net Sales for a
Combination Product when the Combination Product contains a FH and another AI
and the FH is not sold as a Stand-Alone Product nor is the other AI sold as a
stand alone product, the formula for calculating Adjusted Net Sales is as
follows: </P>
<B><P ALIGN="JUSTIFY">[</B> * <B>]</P>
</B><P ALIGN="JUSTIFY">For example,</P>

<UL>

<UL>
<P ALIGN="JUSTIFY"><LI>FH sold in combination with another AI for $15</LI></P>
<B><P ALIGN="JUSTIFY"><LI>[</B> * <B>]</LI></P></UL>
</UL>

</B><P ALIGN="JUSTIFY"></P>
<B><P ALIGN="CENTER">EXHIBIT C</P>
</B><P ALIGN="JUSTIFY">Contact: &#9;</P>
<P ALIGN="JUSTIFY">Angela Bitting</P>
<P ALIGN="JUSTIFY">Exelixis, Inc.</P>
<P ALIGN="JUSTIFY">(650)<B> </B>837-7579</P>
<P ALIGN="JUSTIFY">abitting@exelixis.com</P>
<P ALIGN="JUSTIFY">Garry Hamlin</P>
<P ALIGN="JUSTIFY">Dow AgroSciences</P>
<P ALIGN="JUSTIFY">(317)<B> </B>337-4799</P>
<P ALIGN="JUSTIFY">glhamlin@dowagro.com</P>
<P ALIGN="CENTER">DOW AGROSCIENCES AND EXELIXIS ANNOUNCE</P>
<P ALIGN="CENTER">CROP PROTECTION COLLABORATION</P>
<P ALIGN="JUSTIFY">SOUTH SAN FRANCISCO, Calif. and INDIANAPOLIS, Indiana -
<B>July XX, 2000</B> -- Exelixis and Dow AgroSciences today announced they have
entered into a three-year collaboration to develop novel fungicides and
herbicides for crop protection.  As a result, Dow AgroSciences should be able to
more rapidly develop certain new classes of fungicides and herbicides.</P>
<P ALIGN="JUSTIFY">Under the terms of the agreement, Exelixis will identify and
validate targets and format screening assays that will be used by Dow
AgroSciences to develop new classes of fungicides and herbicides.  Dow
AgroSciences will receive a non-exclusive license with respect to these targets.
Dow AgroSciences will provide research funding, in addition to milestone
payments and royalties on the sales of products resulting from the
collaboration. In addition, Exelixis will utilize a collection of proprietary
compounds from Dow AgroSciences that may be useful in Exelixis' internal drug
discovery programs. Financial terms were not disclosed.</P>
<P ALIGN="JUSTIFY">"Farmers spend billions of dollars each year to minimize crop
yield losses due to weeds and fungal diseases.  Dow AgroSciences is committed to
developing the safest and most effective products to control such pests.  Our
collaboration with Exelixis will enable us to efficiently identify high quality
targets which will enable us to speed the discovery and development of new
fungicides and herbicides of value to agriculture," said Len Smith, Vice
President of Ag Chem and Urban Pest R&amp;D for Dow AgroSciences.</P>
<P ALIGN="JUSTIFY">"Our agreement with Dow AgroSciences leverages our technology
platform in an area where we have significant expertise," said George A.
Scangos, Ph.D., president and chief executive officer of Exelixis.  "As a life
sciences company, we are focused on the improvement of human health through
better pharmaceuticals and better agriculture."&#9;</P>
<P ALIGN="JUSTIFY">Dow AgroSciences LLC, based in Indianapolis, Ind., USA, is a
global leader in providing pest management and biotechnology products that
improve the quality and quantity of the earth's food supply and contribute to
the safety, health and quality of live of the world's growing population. Dow
AgroSciences has approximately 6000 people in over 50 countries dedicated to its
business, and has worldwide sales of more than US $2 billion. Dow AgroSciences
is a wholly-owned subsidiary of The Dow Chemical Company.  </P>
<P ALIGN="JUSTIFY">Exelixis, Inc. is a leading biotechnology company focused on
the life sciences industries through its expertise in comparative genomics and
model system genetics. These technologies provide a rapid, efficient and cost-
effective way to move from DNA sequence data to knowledge about the function of
genes and the proteins that they encode.  The company's technology is broadly
applicable to all life science industries including pharmaceutical, diagnostic,
agricultural biotechnology and animal health.  Exelixis has partnerships with
Bayer, Pharmacia Corporation and Bristol-Myers Squibb and is leveraging these
relationships to fund its internal development program in the area of oncology.
For more information, please visit the company's web site at
www.exelixis.com.</P>
<P ALIGN="JUSTIFY">The forward looking statements contained in this press
release involve risks and uncertainties that may affect the respective company's
operations, markets, products, services, prices and other factors as more fully
discussed elsewhere and in each of their filings with the U.S. Securities and
Exchange Commission.   These risks and uncertainties include, but are not
limited to the ability of the parties to identify novel targets and develop
novel herbicides or fungicides in a rapid manner, if at all.   For Exelixis, in
particular, there can be no assurance that the collaboration will result in any
milestone or royalty payments.  For Dow AgroSciences, there is no assurance that
the company's expectations will be realized.</P>
<P ALIGN="CENTER"># # #</P>
<B><FONT FACE="Tahoma"><P ALIGN="CENTER">Exhibit B</P>
<P ALIGN="CENTER">[ * ]</P>
</B></FONT>























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