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EXHIBIT 10.19
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
FOR THE PORTIONS MARKED [***]
AGREEMENT BY AND BETWEEN
ARENA PHARMACEUTICALS, INC.
AND
TAIGEN BIOTECHNOLOGY CO., LTD.
TABLE OF CONTENTS
Page
----
<Table>
<Caption>
Article I. Definitions 1
Article II. GPCR Selection By TaiGen 6
Article III. Arena Activities 10
Article IV. TaiGen Activities 11
Article V. License Grant 13
Article VI. Warranties 15
Article VII. Diligence Is Of The Essence 16
Article VIII. TaiGen Royalty Payments 17
Article IX. Arena Royalty Payments 18
Article X. Payment Arrangement 19
Article XI. Confidentiality 19
Article XII. Patent Infringement And Enforcement 20
Article XIII. Representations 21
Article XIV. Indemnity 22
Article XV. Termination and Duration 22
Article XVI. Relationship of the Parties 23
Article XVII. Miscellaneous Provisions 23
Signature Blocks 27
Appendix A TaiGen Selected GPCRs
Appendix B Arena Patent Rights
</Table>
--PLEASE NOTE--
Provisions Within This Agreement Are Deemed "CONFIDENTIAL"
in Accordance With The Terms of Article XI.
Reviewers are advised to confirm with their attorney as to any
obligations and/or requirements regarding review of this Agreement.
COVER PAGE
<Page>
AGREEMENT
This Agreement ("Agreement") is effective as defined below by and between
ARENA PHARMACEUTICALS, INC., a Delaware corporation having a place of business
at 6166 Nancy Ridge Drive, San Diego, California, 92121 USA ("Arena"), and
TAIGEN BIOTECHNOLOGY CO., LTD., a corporation incorporated as a company limited
by shares in accordance with the Company law of the Republic of China
("TaiGen").
WHEREAS, TaiGen is a start-up biopharmaceutical organization focused on the
discovery and development of innovative therapeutics;
WHEREAS, Arena is a publicly traded biopharmaceutical organization (Nasdaq:
ARNA) focused on the discovery and development of innovative therapeutics;
WHEREAS, Arena and TaiGen each desires to enter into this Agreement on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, Arena and TaiGen hereby agree as follows:
ARTICLE I
DEFINITIONS
Unless otherwise specifically provided herein, the following terms shall
have the following meanings:
"ACTIVE CAPITAL" means Active Capital Limited, a Cayman Islands company, or its
successor.
"AFFILIATE" when used with reference to a specified person or entity, means any
person or entity directly or indirectly controlling, controlled by or under
common control with the specified person or entity, while "control" in this
context means the direct or indirect ownership of at least 50% of the
outstanding voting securities of a person or entity. For purposes of this
Agreement, the definition of "TaiGen Affiliate" shall include Active Capital.
For purposes of this Agreement, the definition of "Arena Affiliate" shall
specifically exclude: (1) ChemNavigator.com, Inc.; (2) Aressa Pharmaceuticals,
Inc.; and (3) BRL Screening, Inc.
"ANNUAL" means the period between January 1 and December 31, inclusive.
"ARENA ACTIVATION TECHNOLOGY" means an Arena proprietary approach, referred to
by Arena as "CART Technology", to identifying, selecting and altering a
region(s) of a G Protein Coupled Receptor that, when altered, leads to or
enhances ligand-independent constitutive activation of the altered receptor.
"ARENA EXCLUDED GPCR" means any GPCR that (1)[*****************************
**********************************************];
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(2) [**************************************************************]; or (3)
[*********************************************************************
*************].
"ARENA GPCR" means any GPCR in the possession of Arena during the Term of this
Agreement, BUT NOT INCLUDING any Arena Excluded GPCR.
"ARENA GPCR INFORMATION" means, when and if available, human tissue and cell
line gene expression data and protein sequence Phylogenetic Information for
Arena GPCRs.
"ARENA LICENSING REVENUE" means all financial consideration received by Arena
from a Third Party for the licensing by Arena to such Third Party of a CART
Identified Compound,[********************************************************
********************************************************************].
"ARENA PATENT RIGHTS" means all present and/or future patents (including
inventor's certificates) and all present and/or future applications (including
provisional applications) therefore throughout the world as the case may be, and
substitutions, extensions, reissues, renewals, divisions, continuations, or
continuation-in-part thereof or therefore, owned or controlled (either fully or
partially) by Arena, or under which Arena may grant licenses or sublicenses, to
the extent they are directed to (1) Arena Activation Technology applied to
TaiGen Selected GPCR(s) and/or (2) TaiGen Activated Receptor(s) and/or (3)
Screening Assay(s).
"BEST REASONABLE COMMERCIAL EFFORTS" means efforts to achieve a designated
objective, which efforts are based upon reasonably prudent business factors and
considerations.
"CART IDENTIFIED COMPOUND(S)" means a compound, and/or a Derivative of a CART
Identified Compound, that has been identified as a modulator of a TaiGen
Activated Receptor by TaiGen during the term of this Agreement or by Arena
Screening.
"DERIVATIVE" of a first compound means a compound having the same core structure
as the first compound that has been synthesized or conceived, and then
subsequently reduced to practice by TaiGen during the term of this Agreement.
"DRUG PRODUCT" means a therapeutic product comprising a CART Identified
Compound.
"DRUG PRODUCT REVENUE" means [************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
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******************************************************************************
******************************************************************************
************************************************************].
"EFFECTIVE DATE" shall be the First Closing Date as defined in the Stock
Purchase Agreement.
"ENDOGENOUS" means naturally occurring.
"FDA" means the United States Food and Drug Administration.
"G PROTEIN COUPLED RECEPTOR" and "GPCR" means an Endogenous cell-surface
receptor defined by having three (3) intracellular loops, three (3)
extracellular loops, an amino terminus and a carboxy terminus.
"IND" has the same meaning as set forth in 21 C.F.R. Section 312.20,
including any and all amendments, modifications or changes as may be made
thereto in the future, or the equivalent thereof in any applicable country
within the Territory.
"INFORMATION" has the same meaning as set forth in Section 11.1 of this
Agreement.
"INVESTORS' RIGHTS AGREEMENT" means the Investors' Rights Agreement entered into
as of the date of the Stock Purchase Agreement among TaiGen, Arena and certain
other parties.
"LIBRARY COMPOUNDS" means chemical compounds.
"MEASURED RESPONSE" when used in reference to the phrase "TaiGen Activated
Receptor" means a signal measured based upon an assay end-point used to assess
the signal.
"MIGRATE" as used in the definition of "Active Capital" has the same meaning as
set forth in Section 6 of the Investors Rights Agreement.
"NOTICE" has the same meaning as set forth in Section 17.11 of this Agreement.
"PARTY" means either Arena or TaiGen, as the case may be; "Parties" means both
Arena and TaiGen.
"PHASE 1 CLINICAL STUDY" has the same meaning as set forth in 21 C.F.R.
Section 312.21(a), including any and all amendments, modifications or changes
thereto as may be made thereto in the future, or the equivalent thereof, in
any applicable country within the Territory.
"PHASE 2 CLINICAL STUDY" has the same meaning as set forth in 21 C.F.R.
Section 312.21(b), including any and all amendments, modifications or changes
thereto as may be made thereto in the future, or the equivalent thereof, in
any applicable country within the Territory.
"PHASE 3 CLINICAL STUDY" has the same meaning as set forth in 21 C.F.R.
Section 312.21(c), including any and all amendments, modifications or changes
thereto as may be made thereto in the future, or the equivalent thereof, in
any applicable country within the Territory.
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"PHYLOGENETIC INFORMATION" means analysis of GPCRs for determination of GPCR
subfamilies based upon protein sequence information.
"REGULATORY AGENCY" includes, but is not be limited to, FDA, or similar
regulatory bodies in the Territory.
"SERIES A FINANCING ROUND" means the sale and/or distribution by TaiGen of
[***********************] of TaiGen's Series A preferred stock.
"SERIES B FINANCING ROUND" means the sale and/or distribution by TaiGen of at
least [**********************] of TaiGen's preferred stock after and independent
from the closing of the Series A Financing Round, and where the per share price
of each share of such preferred stock sold in the Series B Financing Round is
greater than the per share price of each share of Series A preferred stock sold
in the Series A Financing Round.
"SCREENING" means the process of contacting a chemical compound with a TaiGen
Activated Receptor.
"SCREENING ACTIVITIES" means the process of contacting a chemical compound with
a GPCR.
"SCREENING ASSAY" means an Arena assay approach for Screening that has been
validated based upon Successful Screening of a TaiGen Activated Receptor.
"SCREENING ASSAY NOTICE" has the same meaning as set forth in Section 3.2 of
this Agreement.
"STOCK PURCHASE AGREEMENT" means the Series A Convertible Preferred Stock
Purchase Agreement entered into as of _____ ___, 2001 among TaiGen, Arena and
certain other parties.
"SUCCESSFUL SCREENING" when used in conjunction with the phrase "TaiGen
Activated Receptor" means that the results of the Screening has been positive
whereby at least one molecule that has been contacted with the TaiGen Activated
Receptor reduces the Measured Response of the TaiGen Activated Receptor by at
least [*********** **********] from the mean response of a screening plate that
includes that compound.
"TAIGEN ACTIVATED RECEPTOR" means a TaiGen Selected GPCR to which the Arena
Activation Technology has been applied.
"TAIGEN ACTIVATED RECEPTOR NOTICE" has the same meaning as set forth in Section
3.1 of this Agreement.
"TAIGEN LICENSING REVENUE" means all financial consideration received by TaiGen
from a Third Party for the licensing by TaiGen to such Third Party of a CART
Identified Compound,[**********************************************************
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******************************************************************************].
"TAIGEN SELECTED GPCR" has the same meaning as set forth in Section 2.1 of this
Agreement.
"TAIGEN SELECTION REQUEST" means a Notice request by TaiGen for selection of an
Arena GPCR.
"TECHNICAL INFORMATION" means all information, trade secrets, know-how, methods
of manufacture, processes, documents and materials related to TaiGen Activated
Receptor(s) and/or Screening Assay(s), and other proprietary information,
whether patentable or unpatentable, related to TaiGen Activated Receptor(s)
and/or Screening Assay(s), including but not limited to, improvements, that are
owned, possessed by, or licensed to Arena, whether now existing or hereafter
developed or acquired during the term of this Agreement.
"TECHNOLOGY" means Arena Patent Rights and Technical Information.
"TERM" has the same meaning as set forth in Section 15.2 of this Agreement.
"TERRITORY" means the world.
"THIRD PARTY" means any person or entity other than TaiGen and Arena.
[THE REST OF THIS PAGE IS INTENTIONALLY BLANK]
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ARTICLE II
GPCR SELECTION BY TAIGEN
2.1 Subject to the terms and conditions of this Agreement, within five (5)
business days after the Effective Date, Arena shall provide TaiGen with Arena
GPCR Information available at Arena as of the Effective Date and thereafter when
available, every three (3) months after the Effective Date until the third
anniversary of the Effective Date whereby TaiGen shall be entitled to select and
obtain from Arena up to a maximum of [***] ([**]) Arena GPCRs for inclusion in
this Agreement (each GPCR a "TaiGen Selected GPCR"), with the selection subject
to the following:
(a) FIRST [****] ([**]) ARENA GPCRS.
(i) The selection by TaiGen of up to [***] ([**]) Arena GPCRs may
begin after the Effective Date and must be completed prior to the second
anniversary of the Effective Date.
(ii) Each Arena GPCR selected by TaiGen in accordance with this
Section 2.1(a) must be made by means of a TaiGen Selection Request, with the
date of the TaiGen Selection Request being the date that the TaiGen Selection
Request is received by Arena.
(iii) In the event that TaiGen selects a GPCR that, as of the
date of a TaiGen Selection Request, is determined by Arena to be an Arena
Excluded GPCR, Arena shall provide Notice to TaiGen within five business days
after TaiGen Selection Request is received by Arena that the proposed Arena GPCR
cannot be designated as a TaiGen Selected GPCR; in those circumstances where the
GPCR that is the subject of a TaiGen Selection Request is not an Arena Excluded
GPCR, then Arena shall provide Notice to TaiGen within five business days after
TaiGen Selection Request is received by Arena indicating that such Arena GPCR
may be designated as a TaiGen Selected GPCR and at that time, Arena shall
provide to TaiGen the nucleic acid and protein sequence information for such
TaiGen Selected GPCR.
(b) SECOND [*********] ([**]) ARENA GPCRS.
(i) The selection by TaiGen of up to an additional [*******]
([**]) Arena GPCRs is contingent upon all of the following: (1) completion of
the Series A Financing Round on or before the second anniversary of the
Effective Date; (2) the closing of the Series B Financing Round on or before the
third anniversary of the Effective Date; and (3) securing a per share price for
each share of TaiGen Series B Preferred Stock above the per share price of the
TaiGen Series A Preferred Stock Price:
a) in the event that the Series A Financing Round is not
closed by the second anniversary of the Effective Date, then this entire Section
2.1(b) of the Agreement shall be null and void;
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b) in the event that the Series A Financing Round is closed
by the second anniversary of the Effective Date BUT the Series B Financing Round
is not closed on or before the third anniversary of the Effective Date, then as
the third anniversary of the Effective Date, this Section 2.1(b) of the
Agreement shall be null and void and Arena shall have the unilateral right to
request that TaiGen return any TaiGen Selected GPCR and related Technical
Information secured by TaiGen under the provisions of Section 2.1(b)(i) and
TaiGen warrants and represents that it shall be obligated to comply with such
request within thirty (30) days thereof; in such event, the provisions of: (i)
Section 5.1 of this Agreement shall be null and void with respect to any TaiGen
Selected GPCR(s) selected in accordance with the provisions of Section 2.1(b) of
this Agreement, with all such rights automatically reverting back to Arena, and
(ii) Article IX shall not apply with respect to any TaiGen Selected GPCR(s)
selected in accordance with the provisions of Section 2.1(b) of this Agreement.
c) In the event that the per share price of the TaiGen
Series B Preferred Stock is:
1) [************************************************
******************] then the entire Section 2.1(b) shall be null and
void and Arena shall have the unilateral right to request that TaiGen return any
TaiGen Selected GPCR and related Technical Information secured by TaiGen under
the provisions of Section 2.1(b)(i) and TaiGen warrants and represents that it
shall be obligated to comply with such request within thirty (30) days thereof;
in such event, the provisions of: (i) Section 5.1 of this Agreement shall be
null and void with respect to any TaiGen Selected GPCR(s) selected in accordance
with the provisions of Section 2.1(b) of this Agreement, with all such rights
automatically reverting back to Arena, and (ii) Article IX shall not apply with
respect to any TaiGen Selected GPCR(s) selected in accordance with the
provisions of Section 2.1(b) of this Agreement; OR
2) [*************************************************
******************************] (e.g., if the per share price of the TaiGen
Series A Preferred Stock is [****], the per share price of the TaiGen Series B
Preferred Stock must be at least [****] for the provisions of this Section
2.1(b)(i)(b)(2) to apply), the provisions of Section 2.1(b)(i) shall apply; OR
3) [*************************************************
*********************************************************************], then
the Parties shall meet to determine the number of additional Arena GPCRs that
may be selected by TaiGen under Section 2.1(b) of this Agreement, with the
proviso that such number shall be at least [***] ([**]) but less than [***]
([**]).
(ii) Contingent upon the provisions of Section 2.1(b)(i), the
selection by TaiGen of up to [***********] ([**]) Arena GPCRs may begin after
the consummation of the Migration and must be completed prior at or before the
third anniversary of the Effective Date.
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(iii) Contingent upon the provisions of Section 2.1(b)(i), each
Arena GPCR selected by TaiGen must be made by means of a TaiGen Selection
Request, with the date of the TaiGen Selection Request being the date that the
TaiGen Selection Request is received by Arena.
(iv) In the event that TaiGen selects a GPCR that, as of the date
of a TaiGen Selection Request, is determined by Arena to be an Arena Excluded
GPCR, Arena shall provide Notice to TaiGen within five business days after
TaiGen Selection Request is received by Arena that the proposed Arena GPCR
cannot be designated as a TaiGen Selected GPCR; in those circumstances where the
GPCR that is the subject of a TaiGen Selection Request is not an Arena Excluded
GPCR, then Arena shall provide Notice to TaiGen within five business days after
TaiGen Selection Request is received by Arena, indicating that such Arena GPCR
may be designated as a TaiGen Selected GPCR and at that time, Arena shall
provide to TaiGen the nucleic acid and protein sequence information for such
TaiGen Selected GPCR.
2.2 All TaiGen Selected GPCRs shall be attached hereto as APPENDIX A, which
shall be updated when TaiGen has selected an Arena GPCR that is designated as a
TaiGen Selected GPCR.
2.3 In consideration of the rights granted under Section 2.1(a), TaiGen
shall provide Arena validly issued and recorded Series A Preferred Stock
Certificates in the name of "Arena Pharmaceuticals, Inc." (including any and all
documents related thereto for signature by Arena, including, but not limited to,
the Stock Purchase Agreement and the Investors' Rights Agreement) for
[************] worth of Series A Preferred Stock in accordance with the terms of
the Stock Purchase Agreement.
2.4 The consideration for the rights granted under Section 2.1(b) shall be
based upon either Section 2.4(i) or Section 2.4(ii), but not both:
(i) In consideration of the rights granted under Section 2.1(b),
and in the event that TaiGen has selected [******] ([**]) additional GPCRs that
are designated as TaiGen Selected GPCRs, then at the closing of TaiGen's Series
B Preferred Financing Round, TaiGen shall simultaneously provide Arena a validly
issued and recorded Series B Preferred Stock Certificate in the name of "Arena
Pharmaceuticals, Inc." (including any and all documents related thereto for
signature by Arena, including, but not limited to, a Series B Preferred Stock
purchasing agreement) in an amount sufficient to ensure that at the closing of
TaiGen's Series B Financing Round, and on a fully diluted basis, the Series B
Preferred Stock to be issued to Arena shall be equivalent to [********] percent
([**]%) of the Series B Financing Round.
(ii) In consideration of the rights granted under Section 2.1(b),
and in the event that TaiGen has selected less than [******] ([**]) additional
GPCRs that are designated as TaiGen Selected GPCRs, then at the closing of
TaiGen's Series B Preferred Financing Round, TaiGen shall simultaneously provide
Arena a validly issued and recorded Series B Preferred Stock Certificate in the
name of "Arena Pharmaceuticals, Inc." (including any and all documents related
thereto for signature by Arena, including,
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but not limited to, a Series B Preferred Stock purchasing agreement) in an
amount sufficient to ensure that at the closing of TaiGen's Series B Financing
Round, and on a fully diluted basis, the Series B Preferred Stock to be issued
to Arena shall be equivalent to:
[{each TaiGen Selected GPCR from Section 2.1(b)} X {[****]}]
of the Series B Financing Round, with total percentage being: (a) rounded up to
the next nearest whole number and (b) less than [*******] percent ([**]%).
(iii) In consideration of the rights granted under Section
2.1(b), Arena shall have the right, but not the obligation, to purchase, PARI
PASSU, TaiGen's Series B Preferred Stock in an amount sufficient to ensure that
at the closing of TaiGen's Series B Financing Round, and on a fully diluted
basis, the combination of the Series A Preferred Stock issued to Arena and the
Series B Preferred Stock to be issued to Arena shall be equivalent to [*****]
percent ([**]%) of all securities issued by TaiGen as of the closing of the
Series B Financing Round, to the extent that shares are available after
allocations have been made to the lead investor and to existing shareholders of
the Company based upon their preemptive rights.
2.5 TAIGEN REVIEW
(a) At any time after receipt of Arena GPCR Information by TaiGen,
TaiGen scientists shall have the right to discuss the Arena GPCR Information
with Arena scientist(s) as designated by Arena.
(b) At any time after receipt of nucleic acid and protein sequence
information regarding a TaiGen Selected GPCR by TaiGen, TaiGen scientists shall
have the right to discuss the nucleic acid and protein sequence information with
Arena scientist(s) as designated by Arena.
(c) Upon written request by TaiGen, Arena shall provide TaiGen with
the cDNA of a TaiGen Selected Receptor in a suitable expression vector for the
sole and exclusive use by TaiGen to verify Arena GPCR Information. All
information generated by TaiGen regarding such materials shall be provided to
Arena by TaiGen. Subject to the provisions of Section 2.5(d), in the event that
TaiGen is unable to substantially replicate Arena GPCR Information regarding
TaiGen Selected GPCR within [***********] of receipt of the materials from
Arena, then TaiGen may provide Notice to Arena requesting substitution of TaiGen
Selected GPCR with an Arena GPCR.
(d) In the event that Arena has developed a TaiGen Activated Receptor
and the corresponding Screening Assay using a TaiGen Selected GPCR in accordance
with the provisions of Section 3.1 prior to TaiGen providing Notice to Arena in
accordance with Section 2.5(c), then irrespective of the inability of TaiGen to
replicate Arena GPCR Information regarding such TaiGen Selected GPCR, TaiGen
shall be prohibited from requesting substitution of such TaiGen Selected GPCR
with an Arena GPCR. The maximum number of substitutions that TaiGen may receive
under Section 2.5(c) shall be limited as follows: (1) for the [*********] GPCRs
that may be selected in
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accordance with the provisions of Section 2.1(a), the maximum number of
substations shall be [****] ([**]); and (2) for the [*****] GPCRs that may be
selected in accordance with the provisions of Section 2.1(b), the maximum number
of substations shall be [***] ([**]).
ARTICLE III
ARENA ACTIVITIES
3.1 DEVELOPMENT OF TAIGEN ACTIVATED RECEPTOR. Subject to the terms and
conditions of this Agreement, Arena agrees to use Best Reasonable Commercial
Efforts to apply Arena Activation Technology to EACH TaiGen Selected GPCR to
establish a TaiGen Activated Receptor within [********] after Arena's Notice to
TaiGen that the Arena GPCR shall be designated as a TaiGen Selected GPCR. Upon
creation of EACH TaiGen Activated Receptor, Arena shall provide Notice to TaiGen
("TaiGen Activated Receptor Notice"), and such TaiGen Activated Receptor Notice
shall include a report comprising all data developed by Arena evidencing that
the TaiGen Activated Receptor is constitutively active.
3.2 DEVELOPMENT OF SCREENING ASSAY. Subject to the terms and conditions of
this Agreement, Arena agrees to use Best Reasonable Commercial Efforts to
develop a Screening Assay incorporating EACH TaiGen Activated Receptor within
[***********] after TaiGen Activated Receptor Notice is sent by Arena to TaiGen.
Upon development of each Screening Assay, Arena shall provide Notice to TaiGen
("Screening Assay Notice"), and such Screening Assay Notice shall include a
report comprising of data developed by Arena evidencing the Screening Assay.
3.3 TRANSFER OF TAIGEN ACTIVATED RECEPTOR AND TECHNICAL INFORMATION.
(a) Subject to the terms and conditions of this Agreement, within
[*******] of each Screening Assay Notice, Arena shall transfer to TaiGen the
applicable TaiGen Activated Receptor and a copy of all additional Technical
Information owned or possessed by Arena then applicable to such TaiGen Activated
Receptor and Screening Assay incorporating such TaiGen Activated Receptor.
(b) In the event that TaiGen is unable to substantially replicate the
results of the Screening incorporating such TaiGen Selected Receptor in
accordance with the procedures and protocols used by Arena and provided to
TaiGen as part of the applicable Technical Information, Arena shall cooperate
with TaiGen in studying the cause of such issues, and if any defect in the
TaiGen Activated Receptor or the Screening Assay transferred by Arena to TaiGen
is detected and determined to have been caused by or effected by the activities
of Arena, Arena shall, at its costs and expenses, use Best Reasonable Commercial
Efforts to either repair the defect or transfer a substitute TaiGen Activated
Receptor and Screening Assay incorporating such substituted TaiGen Activated
Receptor to TaiGen.
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3.4 ADDITIONAL SUPPLY. When requested by TaiGen in writing, Arena shall use
its Best Reasonable Commercial Efforts to supply additional quantity of the
TaiGen Activated Receptor within the time period requested by TaiGen free of
charge.
3.5 TECHNICAL ASSISTANCE. At any time during the term of this Agreement,
Arena shall use Best Reasonable Commercial Efforts to provide and make available
the following to TaiGen:
(a) Arena shall make available during its business hours at least one
(1) scientist designated by Arena for consultation with and for responses to any
inquiries of TaiGen relating to TaiGen Selected GPCR, the Technical Information,
Arena GPCR Information, the nucleic acid and amino acid sequences of a TaiGen
Selected GPCR, TaiGen Activated Receptor, Screening Assay, or any other report
and data provided by Arena to TaiGen; such scientist shall be available by means
of telephones, e-mails, written correspondences and any other appropriate means
of communication, PROVIDED HOWEVER, that such scientist shall not be required to
provide more than [***] ([**]) hours' worth of consultation per any twenty (24)
four hour period, and not more than a total of [***] ([**]) hours' worth of
consultation per any five (5) business days. In the event that TaiGen requires
additional consultation time from any Arena scientist, the Parties agree to meet
in good faith to discuss the terms and conditions for a fee-for-service
consulting agreement.
(b) Upon reasonable advanced notice to Arena, TaiGen shall have the
right to dispatch its personnel to visit the laboratories of Arena during
Arena's normal business hours. Arena shall arrange for a scientist designated by
Arena to accompany TaiGen personnel in their tour of the laboratory and to
answer any questions any such personnel may have over the course of the visit,
PROVIDED HOWEVER, that such scientist shall not be required to provide more than
[**] ([*]) hours' worth of consultation per any twenty (24) four hour period,
and not more than a total of [****] ([**]) hours' worth of consultation per any
five (5) business days. In the event that TaiGen requires additional
consultation time from any Arena scientist, the Parties agree to meet in good
faith to discuss the terms and conditions for a fee-for-service consulting
agreement.
3.6 PATENT INFORMATION. A list of Arena Patent Rights, and the jurisdiction
of such Arena Patent Rights, relating to any TaiGen Selected GPCR shall be
attached hereto as APPENDIX B, which shall be updated from time to time upon any
new issuance or filings relating thereto.
ARTICLE IV
TAIGEN ACTIVITIES
4.1 TAIGEN SCREENING.
(a) Upon receipt of EACH TaiGen Activated Receptor, its corresponding
Screening Assay, and related Technical Information from Arena, TaiGen shall use
Best Reasonable Commercial Efforts to promptly validate the Screening Assay
incorporating such TaiGen Activated Receptor and thereafter initiate Screening.
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(b) When requested by TaiGen in writing, Arena shall use its Best
Reasonable Commercial Efforts to assist TaiGen in setting-up a Screening
Assay(s) at TaiGen's facility within the time period(s) requested by TaiGen.
TaiGen agrees to reimburse Arena for the reasonable out-of-pocket costs
associated with the assistance of TaiGen with its Screening.
4.2 CART IDENTIFIED COMPOUNDS. For each TaiGen Activated Receptor, TaiGen
shall use Best Reasonable Commercial Efforts to develop at least one (1) CART
Identified Compound. In the event that TaiGen determines to develop a CART
Identified Compound into a Drug Product, Arena acknowledges and agrees that
TaiGen has sole and exclusive right to unilaterally determine which CART
Identified Compound is to be developed as Drug Product and whether or not to
continue development of any CART Identified Compound or Drug Product. Except as
otherwise provided for in this Agreement, CART Identified Compounds, Derivatives
or Drug Products developed by TaiGen from any TaiGen Activated Receptor
hereunder shall be the exclusive property of TaiGen and TaiGen shall have sole
ownership and title to such CART Identified Compounds, Derivatives or Drug
Products.
4.3 PROGRESS REPORTS.
(a) Beginning from the Effective Date, and throughout the Term of this
Agreement, TaiGen shall provide Arena with written progress reports regarding
the scientific and business-related activities associated with each TaiGen
Selected GPCR. The first report shall be provided by TaiGen to Arena on the
[*********] anniversary of the Effective Date, and each subsequent report shall
be provided by TaiGen to Arena [********] after the previous report was provided
by TaiGen to Arena. Except as otherwise provided for in this Agreement, Arena,
without TaiGen's written consent, shall not utilize any information contained in
such written progress reports.
(b) For each TaiGen Activated Receptor, such report shall include,
where applicable, information directed to: (1) [******************************];
(2) [***********************************]; (3) [*******************************
************************]; (4)[******************************************
************************************************************************
*********************************************];(5)[***************************
*********************************]; (6)[**************************************
*********************]; and (7)[**********************************************
**********************].
(c) With respect to EACH TaiGen Activated Receptor, in the event that
[***] ([*]) consecutive progress reports for such TaiGen Activated Receptor
indicate that no significant activity has been taken by TaiGen with respect to
such TaiGen Activated Receptor, then Arena shall provide Notice to TaiGen
regarding such non-progress and TaiGen shall have until the next progress report
to establish that significant activity has been taken by TaiGen with respect to
such TaiGen Activated Receptor. In the event that such activity has not been
established in the next consecutive progress report, then Arena shall have the
unilateral right to request that TaiGen return such TaiGen Selected GPCR
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and related Technical Information and TaiGen warrants and represents that it
shall be obligated to comply with such request within thirty (30) days thereof;
in such event, the provisions of: (i) Section 5.1 of this Agreement shall be
null and void with respect to such TaiGen Selected GPCR, with all such rights
automatically reverting back to Arena, and (ii) Article IX shall not apply with
respect to such TaiGen Selected GPCR.
ARTICLE V
LICENSE GRANT
5.1 ARENA LICENSE. Subject to the terms and conditions of this Agreement,
Arena hereby grants to TaiGen and its Affiliate Active Capital, effective as of
the Effective Date and continuing for a period of ending upon the expiration of
twenty (20) years from the Effective Date or the date of expiration of the last
to expire patent with claims covering the CART Identified Product(s) and/or Drug
Product(s) derived from such TaiGen Selected Receptor, whichever is longer, the
following with respect ONLY to the TaiGen Activated Receptor that is the subject
of the Screening Assay Notice:
(a) an exclusive right and license under the Technology, exclusive
even as to Arena, but subject to the provisions of Section 5.3 and, when
applicable, Section 2.1(b) of this Agreement, to use, have used, sell, have
sold, import, have imported, further develop, improve and otherwise exploit in
any manner the TaiGen Activated Receptor, for the purpose of identification of
CART Identified Compound(s) in the Territory, and
(b) an exclusive right and license under the Technology, exclusive
even as to Arena, to develop, manufacture, have manufactured, promote, market,
sell, distribute and, subject to the provisions of Section 5.3, Section 5.4 and,
when applicable, Section 2.1(b) of this Agreement, license CART Identified
Compound(s) and/or Drug Product(s) in the Territory.
TaiGen acknowledges and agrees that the license granted to it by Arena hereunder
is limited in scope and does not include a license, express or implied, outside
the scope set forth herein, including, but not limited to, use of the Arena
Activation Technology by TaiGen or use of any technology owned or assigned to:
ChemNavigator.com, Inc.; Aressa Pharmaceuticals, Inc.; and/or BRL Screening,
Inc.
5.2 LIMITED SUBLICENSE RIGHTS. No right is granted by Arena, express or
implied, to TaiGen to sublicense any of the rights granted to TaiGen under
Section 5.1(a) of this Agreement to a Third Party, PROVIDED HOWEVER that if a
Third Party is a licensee of a CART Identified Compound derived by TaiGen from a
TaiGen Selected GPCR, TaiGen shall have the right to sublicense the Screening
Assay related to such CART Identified Compound to such Third Party for the
exclusive and sole use of such Screening Assay for the Third party sublicesee's
own internal research. In all such circumstances, TaiGen shall provide Notice to
Arena after it has sublicensed such Screening Assay to a Third Party and warrant
that the agreement between TaiGen and such Third Party explicitly provides that
(a) the sublicensed rights granted by TaiGen to such Third Party regarding
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such Screening Assay are limited to internal research use only, and (b) that
such Third party is expressly prohibited from further sublicensing such
Screening Assay to any other Third Party.
5.3 RIGHT OF FIRST NEGOTIATION. During the Term of this Agreement, and in
the event that TaiGen determines to license any CART Identified Compound, and/or
Derivative, and/or Drug Product to a Third Party, prior to initiating any
discussions related thereto with any Third Party, TaiGen shall first provide
Notice to Arena informing Arena that the subject CART Identified Compound and/or
Drug Product is available for licensing; such Notice shall include a
sufficiently detailed summary of the Technical Information developed by or on
behalf of TaiGen related to such CART Identified Compound and/or Drug Product.
Within [******] ([**]) days of receipt of such Notice, Arena shall provide
Notice to TaiGen informing TaiGen as to whether or not Arena is interested in
entering into negotiations for a license in and to such CART Identified Compound
and/or Drug Product:
(a) In the event that Arena provides Notice to TaiGen indicating that
Arena will not enter into negotiations for a license in and to such CART
Identified Compound and/or Drug Product, following receipt of such Notice from
Arena, TaiGen may then contact any Third Party regarding the licensing of such
CART Identified Compound and/or Drug Product.
(b) In the event that Arena provides Notice to TaiGen indicating that
Arena will enter into negotiations for a license in and to such CART Identified
Compound and/or Drug Product, Arena and TaiGen shall each use Best Reasonable
Commercial Efforts to immediately meet and initiate negotiations for a license
regarding such CART Identified Compound and/or Drug Product; each Party agrees
to use Best Reasonable Commercial Efforts to conclude such negotiations within
[***] ([**]) months of the date of the Notice provided by Arena to TaiGen under
this Section 5.3(b). In the event that the Parties are unable to reach mutually
acceptable terms and conditions regarding such a license within such [***]
([**]) month period, TaiGen may then contact any Third Party regarding the
licensing of such CART Identified Compound and/or Drug Product.
5.4 IMPROVEMENTS.
(a) TaiGen shall notify Arena, in writing, of any improvement
discovered or developed by TaiGen related to the Technology.
(b) Arena shall notify TaiGen, in writing, of any improvement
discovered or developed by Arena related to the Technology within one (1) month
of the discovery or development of such improvement.
(c) The obligations of Sections 5.4(a) and (b) of this Agreement shall
be continuing throughout the Term of this Agreement. During the Term of this
Agreement, TaiGen shall have a royalty-free, exclusive right and license to use
any
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improvement of Arena referred to in Section 5.4(b) in accordance with the
provisions of Sections 5.1 and 5.2 of this Agreement.
(d) Subject to Section 5.1 and except as specifically provided for in
Section 5.3(e) hereof, Arena shall have a royalty-free, non-exclusive right and
license to use all improvements of TaiGen and/or TaiGen's Licensee(s) referred
to in Section 5.4(a) hereof and to disclose and sublicense the same to its
licensees, if any.
(e) Both Parties acknowledge and agree that Arena has exclusive
ownership of the Technology existing as of the Effective Date and any
improvement thereof hereafter discovered or developed by Arena and that TaiGen
has exclusive ownership of or control over any improvement of the Technology
hereafter discovered or developed by TaiGen and/or TaiGen's Licensee(s).
ARTICLE VI
WARRANTIES
6.1 ARENA REPRESENTS AND WARRANTS THAT ARENA HAS VALID TITLE AND OWNERSHIP
OF THE ARENA ACTIVATION TECHNOLOGY, AND THAT AS OF THE EFFECIVE DATE AND TO THE
BEST OF ITS KNOWLEDGE, THE ARENA ACTIVATION TECHNOLOGY WILL NOT VIOLATE THE
PATENT, COPYRIGHT, TRADEMARK OR OTHER PROPRIETARY RIGHTS OF ANY OTHER PERSON.
ARENA FURTHER WARRANTS THAT ARENA HAS FILED FOR PATENT REGISTRATION, OR USING
BEST REASONABLE COMMERCIAL EFFORTS WILL FILE FOR SUCH REGISTRATION, AS SOON AS
POSSIBLE AFTER SELECTION BY TAIGEN, FOR EACH TAIGEN SELECTED GPCR, TAIGEN
ACTIVATED RECEPTOR, SCREENING ASSAY AND ARENA ACTIVATION TECHNOLOGY WITHIN THE
TERRITORY.
6.2 NEITHER PARTY MAKES ANY REPRESENTATION THAT ANY ARENA GPCR, TAIGEN
SELECTED GPCR, TAIGEN ACTIVATED RECEPTOR OR SCREENING ASSAY TRANSFERRED BY ARENA
TO TAIGEN, WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK OR OTHER
PROPRIETARY RIGHT OF ANY OTHER PERSON. NEITHER PARTY MAKES ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY,
EXPRESS OR IMPLIED, WITH RESPECT TO ANY TAIGEN SELECTED GPCR OR TAIGEN ACTIVATED
RECEPTOR OR SCREENING ASSAY, AS THE CASE MAY BE.
6.3 NEITHER PARTY MAKES ANY REPRESENTATION TO THE OTHER THAT ANY CART
IDENTIFIED COMPOUND OR ANY DRUG PRODUCT WILL NOT INFRINGE ANY PATENT, COPYRIGHT,
TRADEMARK OR OTHER PROPRIETARY RIGHT OF ANY OTHER PERSON. NEITHER PARTY MAKES
ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER
WARRANTY, EXPRESS OR IMPLIED, TO THE
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OTHER WITH RESPECT TO ANY CART IDENTIFIED COMPOUND OR ANY DRUG PRODUCT.
ARTICLE VII
DILIGENCE IS OF THE ESSENCE
7.1 TaiGen acknowledges and agrees that upon receipt from Arena of each
TaiGen Activated Receptor and related Technical Information, diligence regarding
the development of a CART Identified Compound and/or Drug Product, and/or
licensing of such CART Identified Compound and/or Drug Product, is of the
essence.
7.2 The provisions of this Section 7.2 shall apply to a TaiGen Selected
Receptor and corresponding CART Identified Compound and/or Drug Product only if
all three of the premises which give rise to Arena's unilateral right to request
return as set forth in Section 7.2(a), (b) or (c) occur with respect to such
TaiGen Selected Receptor and corresponding CART Identified Compound and/or Drug
Product:
(a) In the event that TaiGen has not licensed the CART Identified
Compound to a Third Party and/or to Arena prior to the expiration of six (6)
years from the receipt of the corresponding TaiGen Selected Receptor from Arena,
Arena shall have the unilateral right to request that TaiGen return any TaiGen
Selected GPCR, CART Identified Compound(s), Drug Product(s), if any, and related
Technical Information, and TaiGen warrants and represents that it shall be
obligated to comply with such request within thirty (30) days thereof; in such
event, the provisions of: (i) Section 5.1 of this Agreement shall be null and
void with respect to any TaiGen Selected GPCR(s), with all such rights
automatically reverting back to Arena, and (ii) Article IX shall apply with
respect to any such CART Identified Compound(s) and Drug Product(s), if any; OR
(b) In the event that TaiGen has not filed an IND with a Regulatory
Agency for a Drug Product prior to the expiration of six (6) years from the
receipt of the corresponding TaiGen Selected Receptor from Arena, Arena shall
have the unilateral right to request that TaiGen return any TaiGen Selected
GPCR, CART Identified Compound(s), Drug Product(s), if any, and related
Technical Information, and TaiGen warrants and represents that it shall be
obligated to comply with such request within thirty (30) days thereof; in such
event, the provisions of: (i) Section 5.1 of this Agreement shall be null and
void with respect to any TaiGen Selected GPCR(s), with all such rights
automatically reverting back to Arena, and (ii) Article IX shall apply with
respect to any such CART Identified Compound(s) and Drug Product(s), if any; OR
(c) In the event that TaiGen has not filed an IND with a Regulatory
Agency for a Drug Product AND the Drug Product has not been introduced into at
least one(1) human volunteer prior to the expiration of six (6) years from the
receipt of the corresponding TaiGen Selected Receptor from Arena, Arena shall
have the unilateral right to request that TaiGen return any TaiGen Selected
GPCR, CART Identified Compound(s), Drug Product(s), if any, and related
Technical Information, and TaiGen warrants and represents that it shall be
obligated to comply with such request within thirty (30) days
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thereof; in such event, the provisions of: (i) Section 5.1 of this Agreement
shall be null and void with respect to any TaiGen Selected GPCR(s), with all
such rights automatically reverting back to Arena, and (ii) Article IX shall
apply with respect to any such Drug Product.
ARTICLE VIII
TAIGEN ROYALTY PAYMENTS
8.1 ROYALTY PAYMENT. In consideration of the right and license granted to
TaiGen hereunder with respect to each TaiGen Activated Receptor, TaiGen shall
provide Arena with a royalty payment based on Annual TaiGen Licensing Revenue
and/or Drug Product Revenue derived from EACH TaiGen Selected Receptor as set
forth below for a period ending upon the expiration of twenty (20) years from
the Effective Date or the date of expiration of the last to expire patent with
claims covering the CART Identified Product(s) and/or Drug Product(s) derived
from such TaiGen Selected Receptor, whichever is longer; such royalty payment
shall be made within three (3) months of December 31 for the Annual period to
which the Annual TaiGen Licensing Revenue applies:
(a) [**********] ([**]%) of Annual TaiGen Licensing Revenue when the
effective date of a license agreement between TaiGen and a Third Party is prior
to initiation of Phase 1 Clinical Study of a CART Identified Compound.
(b) [**********] ([**]%) of Annual TaiGen Licensing Revenue when the
effective date of a license agreement between TaiGen and a Third Party is after
initiation of Phase 1 Clinical Study and prior to completion of a Phase 2
Clinical Study of a CART Identified Compound.
(c) [**********] ([**]%) of Annual TaiGen Licensing Revenue when the
effective date of a license agreement between TaiGen and a Third Party is after
initiation of Phase 2 Clinical Study and prior to completion of a Phase 3
Clinical Study of a CART Identified Compound.
(d) [**********] ([**]%) of Annual TaiGen Licensing Revenue when the
effective date of a license agreement between TaiGen and a Third Party is after
completion of a Phase 3 Clinical Study of a CART Identified Compound.
(e) [**********] ([**]%) of Annual Drug Product Revenue.
8.2 AUDIT. In order to verify the completeness and correctness of TaiGen
Licensing Revenue and/or Drug Product Revenue, TaiGen shall maintain up to date
books and records and Arena shall have the right to conduct, through independent
certified public accountants, at its own cost and at any reasonable time during
business hours, not more often than once each Annual period for not more than
[**] ([*]) previous years, and upon reasonable prior notice, an audit of the
accounting procedures and records of TaiGen in computing and calculating royalty
payment for Annual TaiGen Licensing Revenue and/or Drug Product Revenue due
hereunder. The auditor shall make available
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to TaiGen and Arena a report enumerating the period covered by the audit of
TaiGen Licensing Revenue and/or Drug Product Revenue computed and calculated by
the auditor. The costs of such audit shall be borne by TaiGen in the event that
a discrepancy of more than [****] per cent ([**]%) is discovered through such
audit.
ARTICLE IX
ARENA ROYALTY PAYMENTS
9.1 ROYALTY PAYMENT. In the event that Arena secures any CART Identified
Compound and/or Drug Product from TaiGen in accordance with the terms and
conditions of Article VII of this Agreement, then for each such CART Identified
Compound and/or Drug Product derived from each TaiGen Selected GPCR, Arena shall
provide TaiGen with a royalty payment based on Annual Arena Licensing Revenue
for a period ending upon the expiration of twenty (20) years from the Effective
Date or the date of expiration of the last to expire patent with claims covering
the CART Identified Product(s) and/or Drug Product(s) derived from such TaiGen
Selected Receptor, whichever is longer; such royalty payment shall be made
within three (3) months of December 31 for the Annual period to which the Annual
Arena Licensing Revenue applies:
(a) [********] ([**]%) of Annual Arena Licensing Revenue when the
effective date of a license agreement between Arena and a Third Party is prior
to initiation of Phase 1 Clinical Study of a CART Identified Compound.
(b) [********] ([**]%) of Annual Arena Licensing Revenue when the
effective date of a license agreement between Arena and a Third Party is after
initiation of Phase 1 Clinical Study and prior to completion of a Phase 2
Clinical Study of a CART Identified Compound.
(c) [********] ([**]%)of Annual Arena Licensing Revenue when the
effective date of a license agreement between Arena and a Third Party is after
initiation of Phase 2 Clinical Study and prior to completion of a Phase 3
Clinical Study of a CART Identified Compound.
(d) [********] ([**]%) of Annual Arena Licensing Revenue when the
effective date of a license agreement between TaiGen and a Third Party is after
completion of a Phase 3 Clinical Study of a CART Identified Compound.
(e) [**********] ([**]%) of Annual Drug Product Revenue.
9.2 AUDIT. In order to verify the completeness and correctness of Arena
Licensing Revenue and/or Drug Product Revenue, Arena shall maintain up to date
books and records and TaiGen shall have the right to conduct, through
independent certified public accountants, at its own cost and at any reasonable
time during business hours, not more often than once each Annual period for not
more than [**] ([*]) previous years, and upon reasonable prior notice, an audit
of the accounting procedures and records of Arena in computing and calculating
royalty payment for Annual Drug Product Revenue due
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hereunder. The auditor shall make available to TaiGen and Arena a report
enumerating the period covered by the audit of Arena Licensing Revenue and/or
Drug Product Revenue computed and calculated by the auditor. The costs of such
audit shall be borne by Arena in the event that a discrepancy of more than [**]
per cent ([**]%) is discovered through such audit.
ARTICLE X
PAYMENT ARRANGEMENT
The Parties acknowledge and agree that any and all payments to be made by
TaiGen or Arena to the other under this Agreement are to be (i) in United States
Dollars and (ii) in full as indicated; any income or other tax which one party
is required to pay or withhold on behalf of the other party with respect to
payments payable to other party hereunder shall not be deducted from the amounts
of such payments.
ARTICLE XI
CONFIDENTIALITY
11.1 Each party shall neither disclose to any Third Party any and all of
the information disclosed by the other Party hereunder ("Information"), nor
permit any such Third Party to have access to such Information, nor use such
Information for any purpose other than for purpose of this Agreement, without
the prior written consent of the other Party.
11.2 The receiving Party's obligations under Section 11.1 hereof shall not
apply, with respect to any of such Information to the extent that the receiving
Party can establish by competent proof that such Information:
(a) is published, known publicly, or is already in the public domain
at the time of receipt of it by the receiving Party;
(b) is published, becomes known publicly or becomes a part of the
public domain by publication or otherwise after the time of receipt of it by the
receiving Party, except by breach of this Agreement by the receiving Party;
(c) is obtained from a Third Party after the receipt of it by the
receiving Party, provided, however, that said Third Party has not obtained it
directly or indirectly from the disclosing Party;
(d) is in the receiving Party's possession on the date of the receipt
of it and was not acquired directly or indirectly from the disclosing Party; or
(e) is subsequently developed by the receiving Party independent of
the information received hereunder, as evidenced by competent written records
established by the receiving Party.
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11.3 Notwithstanding anything to the contrary in this Agreement, the
receiving Party shall be entitled to disclose such Information (i) to the extent
required by applicable law or court order provided that the receiving Party
furnishes the disclosing Party with written notice of such request, in advance
of any such disclosure of the Information; (ii) to a government agency,
regulatory authority, clinical research organization, clinical investigator or
other Third Party to whom disclosure is necessary for development of the CART
Identified Compound in connection with drug development, approval or
registration of the CART Identified Compound and/or Drug Product; or (iii) to
the extent required to comply with the reporting requirements of any
governmental agency, including, but not limited to, the U.S. SEC or NASDAQ Stock
market rules, provided that the receiving Party furnishes the disclosing Party
with Notice of such compliance requirement, in advance of any such disclosure of
the Information.
11.4 All information provided by TaiGen to Arena, including without
limitation, the information provided by TaiGen under Section 4.3, is designated
as "CONFIDENTIAL" by TaiGen; all information provided by Arena to TaiGen under
Sections 2.1, 2.2, 2.5 and Article III is designated as "CONFIDENTIAL" by Arena.
11.5 The foregoing obligations of confidentiality shall survive for five
(5) years after any termination or expiration of this Agreement.
ARTICLE XII
PATENT INFRINGEMENT AND ENFORCEMENT
12.1 NOTIFICATION OF INFRINGEMENT. Each Party shall promptly provide Notice
to the other of any infringement (of which it becomes aware) of the intellectual
property rights including patent rights on any TaiGen Activated Receptor(s)
and/or Screening Assay(s) and/or CART Identified Compound(s) and/or Drug
Product(s) by any Third Party and shall provide the other with any available
evidence of such infringement of which the Party is aware.
12.2 SUIT FOR INFRINGEMENT.
(a) During the Term of this Agreement, Arena shall be responsible for
enforcement of the Arena Patent Rights including, but not limited to, the
bringing of an action for patent infringement, selection of the forum for such
action, and counsel, settlement of any such action, and the costs devoted to
such action. TaiGen agrees to provide reasonable assistance except for financial
assistance to Arena in the enforcement of Arena Patent Rights and TaiGen may
join such action as initiated by Arena with counsel at its own expense and seek
its own damages and other relief. If, within ninety (90) days of TaiGen's giving
notice to Arena of a Third Party infringement in the Territory, Arena fails to
institute the infringement suit that TaiGen reasonably feels is required, TaiGen
may institute such infringement proceedings against said Third Party at its
expense and TaiGen shall have the right to receive all the amounts payable by
said Third Party as a result of such proceedings.
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(b) In the event a claim of patent infringement is made against TaiGen
by a Third Party in the Territory by reasons of TaiGen's commercial activities
hereunder, TaiGen and Arena shall meet to analyze the infringement claim and
avoidance of the same. If it is necessary to obtain an appropriate license from
such a Third Party, the Parties shall, in negotiating such a license, make every
efforts to minimize the amount of license fees and/or royalties payable to such
Third Party and (i) in case that such license is related to Arena Activation
Technology, Arena shall be responsible for such license fees and/or royalties,
(ii) in case that such license is related to TaiGen Selected GPCR and/or TaiGen
Activated Receptor and/or Screening Assay, and/or CART Identified Compound,
and/or Drug Product, TaiGen shall be responsible for such license fees and/or
royalties.
ARTICLE XIII
REPRESENTATIONS
13.1 REPRESENTATIONS AND WARRANTIES OF TAIGEN. TaiGen represents and
warrants to Arena as follows:
(a) The execution and delivery of this Agreement have been duly and
validly authorized, and all necessary action has been taken to make this
Agreement a legal, valid and binding obligation of TaiGen enforceable in
accordance with its terms.
(b) The execution and delivery of this Agreement and the performance
by TaiGen of its obligations hereunder will not contravene or result in the
breach of the Articles of Incorporation of TaiGen or result in any material
breach or violation of or material default under any material agreement,
indenture, license, instrument or understanding or, to the best of its
knowledge, result in breach of any law, rule, regulation, statute, order or
decree, to which TaiGen is a party or of which it or any of its property is
subject.
13.2 REPRESENTATIONS AND WARRANTIES OF ARENA. Arena represents and warrants
to TaiGen as follows:
(a) The execution and delivery of this Agreement have been duly and
validly authorized, and all necessary action has been taken to make this
Agreement a legal, valid and binding obligation of Arena enforceable in
accordance with its terms.
(b) The execution and delivery of this Agreement and the performance
by Arena of its obligations hereunder will not contravene or result in the
breach of the Certificate of Incorporation or Bylaws of Arena or result in any
material breach or violation of or material default under any material
agreement, indenture, license, instrument or understanding or, to the best of
its knowledge, result in breach of any law, rule, regulation, statute, order or
decree, to which Arena is a party or of which it or any of its property is
subject.
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ARTICLE XIV
INDEMNITY
14.1 INDEMNIFICATION BY TAIGEN. TaiGen will indemnify and hold harmless
Arena and its Affiliates, employees, officers, directors, shareholders and
agents (an "Arena Indemnified Party") from and against all liability, loss,
damages, costs and expenses (including reasonable attorneys' fees) which Arena
Indemnified Party may incur, suffer or be required to pay resulting from or
arising in connection with (i) the breach by TaiGen of any agreement, covenant,
representation or warranty of TaiGen obtained in this Agreement, or (ii)
negligence or omission of TaiGen.
14.2 INDEMNIFICATION BY ARENA. Arena will indemnify and hold harmless
TaiGen and its Affiliates, TaiGen's Licensees, employees, officers, directors,
shareholders and agents (an "TaiGen Indemnified Party") from and against all
liability, loss, damages, costs and expenses (including reasonable attorneys'
fees) which TaiGen Indemnified Party may incur, suffer or be required to pay
resulting from or arising in connection with (i) the breach by Arena of any
agreement, covenant, representation or warranty of Arena obtained in this
Agreement, or (ii) negligence or omission of Arena.
14.3 CONDITIONS TO INDEMNIFICATION. The obligations of the indemnifying
Party under Sections 14.1 and 14.2 of this Agreement are conditioned upon the
prompt Notice to the indemnifying Party of any of the aforementioned suits or
claims in writing within fifteen (15) days after receipt of notice by the
indemnified Party of such suit or claim. The indemnifying Party shall have the
right to assume the defense of any such suit or claim unless, in the reasoned
judgment of the indemnified Party, such suit or claim involves an issue or
matter which could have a materially adverse effect on the business, operations
or assets of the indemnified Party, in which event the indemnified Party may
participate in the defense of such suit or claim at its sole cost and expense.
The provision for indemnification shall be void and there shall be no liability
against a indemnified Party as to any suit or claim for which settlement or
compromise or an offer of settlement or compromise is made without the prior
consent of the indemnifying Party.
ARTICLE XV
TERMINATION AND DURATION
15.1 BREACH. Failure by either Party to comply with any of its material
obligations contained in this Agreement shall entitle the other Party to give
Notice to the Party in default specifying the nature of the default and
requiring it to cure such default. If such default is not cured within two (2)
months after receipt of such Notice, the notifying Party shall be entitled,
without prejudice to any of its other rights conferred on it by this Agreement,
to terminate this Agreement and the licenses granted to the breaching Party
hereunder with immediate effect by giving notice to such termination. The right
of either Party to terminate this Agreement as herein provided shall not be
affected in any way by its waiver of, or failure to take action with respect to,
any previous default.
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15.2 DURATION OF THIS AGREEMENT.
(a) This Agreement shall become effective from the Effective Date and
continue to be in effect until expiration of TaiGen's obligation of royalty
payments under Article VIII, or Arena's obligation of royalty payment, if any,
under Article IX, whichever is longer ("Term"). Thereafter, all licenses or
sublicenses granted hereunder shall become fully paid-up irrecoverable license.
(b) Either Party shall be entitled to terminate this Agreement in the
event of
(1) insolvency of the other Party or commencement of bankruptcy
proceedings by such Party; or
(2) dissolution of the other Party by that Party, or liquidation
of such Party by that Party.
(c) The Parties agree that in the event that TaiGen sublicenses any of
the rights granted to it under this Agreement to a Third Party, such sublicense
shall include provisions whereby if such sublicensee(s) becomes insolvent,
commences bankruptcy proceedings, dissolves, and/or liquidates its assets, any
and all rights granted by TaiGen to such sublicensee(s) shall automatically
revert back to TaiGen.
15.3 ACCRUED RIGHTS; SURVIVING OBLIGATIONS. Termination or expiration of
this Agreement for any reason shall be without prejudice to any rights that
shall have accrued to the benefit of either Party prior to such termination or
expiration, nor shall such termination or expiration relieve either Party from
obligations that are expressly indicated to survive termination or expiration of
this Agreement.
ARTICLE XVI
RELATIONSHIP OF THE PARTIES
Nothing in this Agreement is intended or shall be deemed to constitute a
partnership, agency, employer-employee, or joint venture relationship between
the Parties. All activities by each Party hereunder shall be provided as an
independent contractor. No Party shall incur any debts or make any commitments
for the other, except to the extent, if at all, specifically provided herein.
ARTICLE XVII
MISCELLANEOUS PROVISIONS
17.1 LIMITATIONS ON ASSIGNMENT. Neither this Agreement nor any interest
hereunder shall be assignable or transferable by TaiGen without the prior
written consent of Arena, which consent may be unilaterally withheld in the sole
and exclusive discretion of Arena, except that Arena agrees that TaiGen may
assign and transfer this Agreement and any interest hereunder to its Affiliate
Active Capital.
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17.2 FURTHER ACTS AND INSTRUMENTS. Each Party hereto agrees to execute,
acknowledge and deliver such further instruments and to do all such other acts
as may be necessary or appropriate to carry out the purpose and intent of this
Agreement.
17.3 ENTIRE AGREEMENT. This Agreement constitutes and contains the entire
agreement of the Parties and supersedes any and all prior negotiations,
correspondence, understandings, Letters of Intent and agreements between the
Parties respecting the subject matter hereof. This Agreement may be amended or
modified or one or more provisions hereof waived only by a written instrument
signed by the Parties.
17.4 SEVERABILITY. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of this Agreement shall be interpreted as if such
provision were so excluded.
17.5 CAPTIONS. The captions to this Agreement are for convenience only and
are to be of no force or effect in construing and interpreting the provisions of
this Agreement.
17.6 FORCE MAJEURE. Neither Party shall be liable to the other for loss or
damages, or have any right to terminate this Agreement for any default or delay,
attributable to any act of God, flood, fire, explosion, breakdown or plant
strike, lockout, labor dispute, casualty, accident, war, revolution, civil
commotion, act of a public enemy, blockage, embargo, injunction, law, order,
proclamation, regulation, ordinance, demand or requirement of any government or
subdivision, authority or representative of any government, or any other cause
beyond the reasonable control of such Party.
17.7 NO TRADE NAME OR TRADEMARK LICENSE.
(a) No right, express or implied, is granted by this Agreement to
TaiGen, TaiGen collaborators or TaiGen's Licensees to use in any manner the name
"Arena," "Arena Pharmaceuticals," "CART" or any trade name or trademark of Arena
in any business dealing which is not directly connected with the performance of
this Agreement; provided, however, that TaiGen shall have the right to use or
disclose the name Arena only to the extent and the manner as may be required by
law.
(b) No right, express or implied, is granted by this Agreement to
Arena, Arena collaborators or Arena licensees to use in any manner the name
"TaiGen" or any trade name or trademark of TaiGen in any business dealing which
is not directly connected with the performance of this Agreement; provided,
however, that Arena shall have the right to use or disclose the name TaiGen only
to the extent and the manner as may be required by law.
(c) During the term of this Agreement, the Parties may issue a press
release regarding the acceptance of this Agreement by the Parties with prior
written consent of the other Party on the contents of such release, which
consent shall not be unreasonably withheld (it is not necessary to obtain the
consent of the other Party for
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disclosing the information regarding this Agreement which a Party is required by
law to disclose).
17.8 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement shall be
governed by and construed under applicable federal law of the United States of
America and the laws of the State of California, excluding any conflict of law
provisions. Each Party hereto hereby voluntarily and irrevocably waives trial by
jury in any action or proceeding brought in connection with this Agreement, any
of the other transaction documents or any of the transactions contemplated
hereby or thereby. Each Party hereby expressly waives any and all rights to
bring any suit, action or other proceeding in or before any court or tribunal
other than arbitration court following the rules of arbitration of the
International Chamber of Commerce and covenants that it shall not seek in any
manner to resolve any dispute other than as set forth in this Section 17.8 or to
challenge or set aside any decision, award or judgment obtained in accordance
with the provisions hereof. Each Party hereby expressly waives any and all
objections it may have to venue, including, without limitation, the
inconvenience of such forum, in any of such courts. In addition, the service of
process regarding the arbitration shall be subject to the rules of arbitration
of the International Chamber of Commerce or applicable laws. The Parties further
agree that any dispute resolution initiated by TaiGen under this Section 17.8
shall take place in San Diego, California (U.S.A.) and any dispute resolution
initiated by Arena under this Section 17.8 shall take place in Taiwan, and in
both situations, the proceedings shall be conducted in the English language.
17.9 EXPENSES. Except as otherwise provided herein, each Party hereto shall
bear its legal and other expenses incurred in connection with the negotiation,
execution, delivery and performance of this Agreement.
17.10 COUNTERPARTS. This Agreement shall be executed in two counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
17.11 NOTICE. Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in writing and shall be deemed effectively
given upon personal delivery to the Party to be notified or upon deposit with
the registered or certified mail in the country of residence of the Party giving
the notice, postage prepaid, or upon deposit with an internationally recognized
express courier with proof of delivery, postage prepaid and addressed to the
Party to be notified at the address or addresses indicated below, or upon the
date of fax transmission of such notice (with proof of such fax transmission
established by the sender's fax receipt) using the fax numbers listed below, or
at such other address or fax number as such Party may designate by ten (10)
days' advance written notice to the other Party with copies to be provided as
follows:
[THE REST OF THIS PAGE IS INTENTIONALLY BLANK]
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IF TO ARENA, ADDRESSED TO:
Arena Pharmaceuticals, Inc.
6166 Nancy Ridge Drive
San Diego, CA 92121 USA
Attention: Jack Lief
President & CEO
Fax: (858) 677-0065
With a copy to: General Counsel (at the same address)
IF TO TAIGEN, ADDRESSED TO:
TaiGen Biotechnology Co., Ltd.
9F, 25 Tung-Hwa South Road, Section 1
Taipei, Taiwan, 105
R.O.C.
Attention: Dr. Ming-Chu Hsu
Fax: 886-2-2570-3107
With a copy to: Jacqueline Fu, Counsel to TaiGen
International Trade Building
Suite 2009, 20th F
333 Keelung Road, Section 1
Taipei, Taiwan 110
R.O.C.
17.12 SURVIVING RIGHTS AND OBLIGATIONS. The following Articles and Sections
shall survive any termination or expiration of this Agreement: Article I
(Definitions); Article VI (No Warranties); Article X (Payment Arrangement);
Article XI (Confidentiality); Article XII (Patent Infringement and Enforcement);
Article XIII (Representations); Article XIV (Indemnity); Sections 5.3, 5.4(d),
17.8 and 17.11; and any payment otherwise subsequently or otherwise due under
Articles VIII and/or IX. Upon expiration of TaiGen royalty obligation under this
Agreement, all licenses and rights granted to TaiGen hereunder shall become
fully paid-up irrecoverable license.
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WHEREUPON, the Parties have caused this Agreement to be executed by their
duly authorized agents, as of the dates listed below.
ARENA PHARMACEUTICALS, INC. TAIGEN BIOTECHNOLOGY CO., LTD.
By: /s/ Jack Lief By: /s/ Ming-Chu Hsu
---------------------------- ----------------------
Name: Jack Lief Name: Ming-Chu Hsu
Title: President & CEO Title: Chairman
Date: June 28, 2001 Date: June 29, 2001
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APPENDIX A
TAIGEN SELECTED GPCRS
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APPENDIX B
ARENA PATENT RIGHTS
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