EXHIBIT 10.49

 

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REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

Confidential EXECUTION VERSION

License and Collaboration Agreement

by and between

Five Prime Therapeutics, Inc.

and

Bristol-Myers Squibb Company

 

 

 

 

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Confidential EXECUTION VERSION

Article 1

DEFINITIONS1

 

 

1.170

Other Defined Terms23

 

 

1.171

Interpretation23

 

Article 2

GOVERNANCE24

 

 

2.1

Alliance Managers24

 

 

2.2

Joint Development Committee24

 

 

2.3

Joint Commercialization Committee25

 

 

2.4

Joint Steering Committee25

 

 

2.5

Limitation of Committee Authority25

 

 

2.6

Formation of Working Groups26

 

 

2.7

Committee Membership and Meetings27

 

 

2.8

Committee Decision-Making28

 

 

2.9

Discontinuation of Participation on a Committee29

 

Article 3

LICENSES; EXCLUSIVITY29

 

 

3.1

Licenses to BMS29

 

 

3.2

BMS Sublicense Rights31

 

 

3.3

Licenses to Five Prime31

 

 

3.4

No Implied Licenses; Negative Covenant32

 

 

3.5

Five Prime’s Exclusivity Obligations32

 

 

3.6

BMS’s Exclusivity Obligations33

 

 

3.7

Subcontractors35

 

 

3.8

Technology Transfer36

 

 

3.9

Third Party Licenses36

 

Article 4

DEVELOPMENT AND REGULATORY MATTERS38

 

 

4.1

General; Diligence38

 

 

4.2

Development Plan; Amendments to Development Plan38

 

 

4.3

Five Prime Development Activities39

 

 

4.4

Inclusion of a Five Prime Independent Development Path in the Development Plan49

 

 

4.5

Development Records51

 

 

4.6

Development and Regulatory Reports51

 

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AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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4.7

Regulatory Matters for Licensed Product; Data51

 

 

4.8

Notice of Regulatory Action54

 

 

4.9

Amendment of Pharmacovigilance Agreement54

 

Article 5

MANUFACTURING54

 

 

5.1

Overview55

 

 

5.2

Transfer of Manufacturing Know-How; Existing Inventory of Licensed Antibodies
and Licensed Products55

 

 

5.3

Provision of Licensed Product for Five Prime Development Activities56

 

 

5.4

Subcutaneous Formulation59

 

Article 6

COMMERCIALIZATION59

 

 

6.1

General59

 

 

6.2

Diligence59

 

 

6.3

Commercialization Report60

 

 

6.4

Decision-Making Authority60

 

 

6.5

Five Prime’s Co-Promotion Option60

 

Article 7

FINANCIAL PROVISIONS63

 

 

7.1

Upfront Payment63

 

 

7.2

Milestone Payments63

 

 

7.3

Royalty Payments68

 

 

7.4

Currency; Exchange Rate; Invoices71

 

 

7.5

Late Payments72

 

 

7.6

Taxes72

 

 

7.7

Records and Audit Rights73

 

Article 8

INTELLECTUAL PROPERTY RIGHTS74

 

 

8.1

Ownership of Collaboration Intellectual Property74

 

 

8.2

Unilateral Intellectual Property75

 

 

8.3

Patent Prosecution75

 

 

8.4

Patent Enforcement78

 

 

8.5

Defense Against Claims of Infringement of Third Party Patents81

 

 

8.6

Trademarks81

 

 

8.7

Patent Term Extension82

 

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AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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8.8

Joint Research Agreement82

 

Article 9

CONFIDENTIALITY; PUBLICATION82

 

 

9.1

Duty of Confidence82

 

 

9.2

Exceptions83

 

 

9.3

Authorized Disclosures84

 

 

9.4

Publications85

 

 

9.5

Publication and Listing of Clinical Trials and Compliance with other Policies,
Orders and Agreements86

 

 

9.6

Publicity; Use of Names86

 

 

9.7

Disclosure to Ono88

 

 

9.8

Attorney-Client Privilege88

 

Article 10

TERM AND TERMINATION88

 

 

10.1

Term88

 

 

10.2

Termination88

 

 

10.3

Effect of Termination by BMS under Section 10.2(a) or by Five Prime under
Section 10.2(b) or 10.2(c)91

 

 

10.4

Effects of Termination by BMS under Section 10.2(a)(ii)94

 

 

10.5

Termination Press Releases95

 

 

10.6

Survival95

 

 

10.7

Termination Not Sole Remedy95

 

Article 11

REPRESENTATIONS AND WARRANTIES95

 

 

11.1

Representations and Warranties of Each Party95

 

 

11.2

Representations and Warranties by Five Prime96

 

 

11.3

Representations and Warranties by BMS98

 

 

11.4

Mutual Covenants99

 

 

11.5

Compliance with Ono Agreements99

 

 

11.6

No Other Warranties99

 

Article 12

INDEMNIFICATION; LIABILITY; INSURANCE99

 

 

12.1

Indemnification by Five Prime for Third Party Claims99

 

 

12.2

Indemnification by BMS for Third Party Claims100

 

 

12.3

Indemnification Procedure101

 

 

12.4

Mitigation of Loss102

 

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AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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12.5

Limitation of Liability102

 

 

12.6

Insurance102

 

Article 13

GENERAL PROVISIONS102

 

 

13.1

Force Majeure102

 

 

13.2

Assignment103

 

 

13.3

Severability103

 

 

13.4

Notices103

 

 

13.5

Governing Law104

 

 

13.6

Dispute Resolution104

 

 

13.7

Termination of Existing Clinical Agreement; Entire Agreement; Amendments106

 

 

13.8

Headings106

 

 

13.9

Independent Contractors106

 

 

13.10

Waiver107

 

 

13.11

Cumulative Remedies107

 

 

13.12

Waiver of Rule of Construction107

 

 

13.13

Business Day Requirements107

 

 

13.14

Further Actions107

 

 

13.15

Counterparts107

 

 

13.16

Compliance with Sunshine Laws107

 

 

13.17

Rights in Bankruptcy108

 

 

13.18

Antitrust Filings109

 

 

13.19

Non-Solicitation of Employees109

 

 

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REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Confidential EXECUTION VERSION

 

LICENSE AND COLLABORATION AGREEMENT

This License And Collaboration Agreement (this “Agreement”) is made as of
October 14, 2015 (the “Execution Date”), by and between Five Prime Therapeutics,
Inc., a Delaware corporation, headquartered at 2 Corporate Drive, South San
Francisco, California 94080 (“Five Prime”), and Bristol-Myers Squibb Company, a
Delaware corporation, headquartered at 345 Park Avenue, New York, New York,
10154, USA (“BMS”).  Five Prime and BMS are referred to in this Agreement
individually as a “Party” and collectively as the “Parties.”  

Recitals

Whereas, Five Prime controls certain patents and know-how relating to its
proprietary program regarding CSF1R Antibodies (as defined below), including
patents and know-how covering the antibody known as FPA008;

Whereas, BMS is a biopharmaceutical company engaged in the research,
development, manufacture and commercialization of human therapeutic products;
and

Whereas, BMS wishes to obtain from Five Prime the exclusive global rights to
develop and commercialize such CSF1R Antibodies, and Five Prime wishes to grant
such rights to BMS, all under the terms and conditions set forth herein.  

Now, Therefore, in consideration of the foregoing premises and the covenants
contained herein, the receipt and sufficiency of which are hereby acknowledged,
BMS and Five Prime hereby agree as follows:

Article 1

DEFINITIONS

The terms in this Agreement with initial letters capitalized shall have the
meanings set forth below, or the meanings designated in the indicated places
throughout this Agreement.

1.1“Active Ingredient” means the clinically active material(s) that provide
pharmacological activity in a pharmaceutical product (excluding formulation
components such as coatings, stabilizers, excipients or solvents, adjuvants or
controlled release technologies, except in the case where such formulation
component is recognized by the FDA as an active ingredient in accordance with
21 CFR 210.3(b)(7)).

1.2“Affiliate” means, with respect to an Entity, another Entity that controls,
is controlled by, or is under common control with that Entity.  For the purpose
of this definition only, “control” (including, with correlative meaning, the
terms “controlled by” and “under the common control”) means the actual power,
either directly or indirectly through one or more

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REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Confidential EXECUTION VERSION

intermediaries, to direct or cause the direction of the management and policies
of an Entity, whether by the ownership of more than fifty percent (50%) of the
voting stocking of such Entity, by contract or otherwise.

1.3“Alliance Manager” is defined in Section 2.1.

1.4“Alternate Development Path” is defined in Section 4.3(g).

1.5“Antibody” means any antibody or antigen binding fragment thereof (including
any bispecific or multispecific antibody, single chain antibody or domain
antibody) and/or similar antigen binding protein, whether polyclonal,
monoclonal, human, humanized, chimeric, murine, synthetic or from any other
source.

1.6“Applicable Laws” means collectively all laws, regulations, ordinances,
decrees, judicial and administrative orders (and any license, franchise, permit
or similar right granted under any of the foregoing) and any policies and other
requirements, of any applicable Governmental Authority that cover or apply to a
Party’s activities in connection with this Agreement.

1.7“Arbitration Notice” is defined in Section 13.6(b)(i).

1.8“Arbitrators” is defined in Section 13.6(b)(ii).

1.9“Biosimilar Product” means in a particular country with respect to a Licensed
Product that contains a Licensed Antibody, any pharmaceutical product that: (a)
has received all necessary approvals by the applicable Regulatory Authorities in
such country to market and sell such product as a pharmaceutical product; (b) is
marketed or sold by a Third Party that has not obtained the rights to market or
sell such product as a licensee, sublicensee or distributor of BMS or any of its
Affiliates, licensees or sublicensees with respect to such product; and (c) is
approved as (i) a “biosimilar” (in the United States) of such Licensed Product,
(ii) a “similar biological medicinal product” (in the EU) with respect to which
such Licensed Product is the “reference medicinal product” or (iii) if not in
the US or EU, the foreign equivalent of a “biosimilar” or “similar biological
medicinal product” of such Licensed Product; in each case for use in such
country pursuant to an expedited regulatory approval process governing approval
of generic biologics based on the then-current standards for regulatory approval
in such country (e.g., the Biologics Price Competition and Innovation Act of
2009 or an equivalent under foreign law) and where such regulatory approval was
based in significant part upon clinical data generated by BMS (or its Affiliate
or sublicensee) with respect to such Licensed Product.

1.10“BLA” means a Biological License Application or New Drug Application (as
defined by the FDA) or its foreign equivalent (or any successor application
having substantially the same function).

 

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REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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1.11“BLA Approval” means the approval of a BLA by the FDA for the applicable
Licensed Product (whether alone for as part of a Combination Product or
combination therapy).

1.12“BMS Claims” is defined in Section 12.1

1.13“BMS Combined Product” means any Proprietary BMS product (other than a
Licensed Product) that has received Marketing Approval for use in combination
with a Licensed Product and is sold in final finished form by BMS or its
Affiliate.  

1.14“BMS Competing Program” is defined in Section 3.6(b).

1.15“BMS Damages” is defined in Section 12.1.

1.16“BMS Indemnitees” is defined in Section 12.1.

1.17“BMS Know-How” means all Know-How that is (a) Controlled by BMS or its
Affiliates as of the Effective Date or that comes into the Control of BMS or its
Affiliates after the Effective Date and during the Term, and (b) reasonably
necessary or useful for the Development or Commercialization of any Licensed
Product or the conduct of the Five Prime Development Activities.  For clarity,
BMS Know-How shall include BMS’s interest in any Collaboration Know-How.  

1.18“BMS Patents” means any Patent that is (a) Controlled by BMS or its
Affiliates as of the Effective Date or that comes into the Control of BMS or its
Affiliates after the Effective Date and during the Term, and (b) reasonably
necessary or useful for the Development or Commercialization of any Licensed
Product or the conduct of the Five Prime Development Activities.  For clarity,
BMS Patents shall include BMS’s interest in any Collaboration Patents.  

1.19“BMS Pipeline Asset” means Nivolumab or any other Antibody, peptide or
chemical compound (other than any Licensed Antibody, Licensed Product or
Marketed BMS Molecule) Controlled by BMS that is used by Five Prime in the
conduct of a Five Prime Independent Development Path or the Development Plan as
contemplated by this Agreement.

1.20“BMS Replacement Combination” is defined in Section 4.3(f).

1.21“BMS Reserved Pipeline Target” means (i) the Targets listed on Exhibit A
hereto and (ii), in addition to those Targets covered under (i), any other
Target (other than a Five Prime Reserved Target) with respect to which (a) BMS
has filed an IND with respect to an agent that modulates such Target, (b) BMS is
using commercially reasonable efforts to develop such agent, (c) the development
of such agent in combination with a Licensed Antibody or Licensed Product is
included in the Development Plan and (d) BMS has a bona fide intent to initiate
a *** Clinical Trial of such agent in combination with a Licensed Antibody or
Licensed Product within *** with respect to such agent (such agent, a “Reserved
Target Therapeutic”), provided, however, any Target identified in (ii) would
remain a BMS Reserved Pipeline Target only if BMS initiates

 

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REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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a Clinical Trial of a Reserved Target Therapeutic that modulates such Target in
combination with a Licensed Antibody or Licensed Product within *** for such
Reserved Target Therapeutic and for so long as BMS is conducting Clinical
Development of a Reserved Target Therapeutic that modulates such Target in
combination with a Licensed Antibody or Licensed Product.  For clarity, a Target
will not be a BMS Reserved Pipeline Target under clause (ii) above if (x) such
Target modulates the same Target as a Five Prime Asset used in a Five Prime
Pipeline Combination where Five Prime notified BMS of the first Clinical Trial
for such Five Prime Pipeline Combination with such Five Prime Asset and BMS did
not exercise its right to include such Clinical Trial under the Development Plan
in accordance with Section 4.3(f); and (y) Five Prime initiates a Clinical Trial
for such Five Prime Pipeline Combination within *** of such notice and for so
long as Five Prime continues development of such Five Prime Pipeline
Combination.

1.22“BMS Technology” means BMS Know-How and BMS Patents.

1.23“Business Day” means a day other than a Saturday, Sunday or a day on which
banking institutions in New York, New York are required by Applicable Laws to
remain closed.  

1.24“Calendar Quarter” means the respective periods of three consecutive
calendar months ending on March 31, June 30, September 30 and December 31.

1.25“Calendar Year” means each one (1) year period beginning on January 1 and
ending on December 31.

1.26“Change of Control” means, with respect to a Party:

(a)the acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended)
who or which constitute(s) a Third Party (a “Specified Person”) of beneficial
ownership (within the meaning of Rule 13d‑3 promulgated under the Securities
Exchange Act of 1934, as amended) of fifty percent (50%) or more of the combined
voting power of the then outstanding voting securities of such Party entitled to
vote generally in the election of directors of such Party (the “Outstanding
Voting Securities”); provided, however, that for the purposes of this
sub-section (a), the following acquisitions of securities of such Party shall
not constitute a Change of Control of such Party, notwithstanding that any such
acquisition would constitute a Change of Control of such Party in the absence of
this proviso:  (x) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by such Party or any Affiliate of such Party or
(y) any acquisition by a Specified Person pursuant to a transaction which
complies with subsection (b) of this definition;

(b)the consummation of any acquisition, merger or consolidation of such Party by
any Third Party (a “Business Combination Transaction”), unless immediately
following such Business Combination Transaction, the Persons who were the
beneficial owners of the Outstanding Voting Securities immediately prior to such
Business Combination

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Transaction beneficially own, directly or indirectly, fifty percent (50%) or
more of the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors of the corporation or
other Entity resulting from such Business Combination Transaction (including a
corporation or other Entity which as a result of such transaction owns the
then-outstanding securities of such Party or all or substantially all of such
Party’s assets either directly or through one or more subsidiaries); or

(c)such Party or any of its Affiliates sells or transfers to any Specified
Person(s) in one or more related transactions properties or assets representing
all or substantially all of such Party’s business or assets to which the subject
matter of this Agreement relates at the time of such sale or transfer.

1.27“Clinical Development” means, with respect to a Licensed Antibody or
Licensed Product, (i) the conduct of a Clinical Trial with respect to such
Licensed Antibody or Licensed Product in any disease, Indication and/or
combination and (ii) regulatory activities directed at utilizing the results of
such Clinical Trial to obtain or maintain Marketing Approval for the Licensed
Antibody or Licensed Product in such disease, Indication and/or combination;
provided, however, that Clinical Development shall not refer to
Commercialization or manufacturing activities (including manufacturing
activities related to Development).

1.28“Clinical Trial” means any human clinical trial of a Licensed Product.

1.29“Collaboration Intellectual Property” means any information, discoveries,
improvements, modifications, processes, methods, designs, protocols, formulas,
data, inventions, algorithms, forecasts, profiles, strategies, plans, results,
know-how and trade secrets, patentable or otherwise, that is discovered,
generated, conceived and/or reduced to practice by or on behalf either Party
(including its Affiliates, employees, agents and contractors), whether solely or
jointly, in the course of the performance of the Development Plan or the Current
Combination Trial (whether before or after the Effective Date), including all
rights, title and interest in and to the intellectual property rights therein
and thereto.

1.30“Collaboration Know-How” means Know-How that is within the Collaboration
Intellectual Property.

1.31“Collaboration Patents” means Patents that claim any Collaboration
Intellectual Property.  

1.32“Commercialize” or “Commercialization” means all activities directed to
commercial manufacturing, marketing, promoting, advertising, exhibiting,
distributing, detailing, selling (and offering for sale or contracting to sell)
or otherwise commercially exploiting (including pricing and reimbursement
activities) a Licensed Product in the Field in the Territory (including
importing and exporting activities in connection therewith).

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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1.33“Commercially Reasonable Efforts” means (i) with respect to Five Prime’s
obligations with respect to performance of the Current Combination Trial, the
carrying out of such obligations or tasks (including the activities set forth on
Schedule 4.3(k)) with a level of effort and resources consistent with the
commercially reasonable practices normally devoted by a similarly situated
biotechnology company, subject to and in accordance with the terms and
conditions of this Agreement; and (ii) where applied to all other obligations or
activities of a Party hereunder, the carrying out of such obligations or
activities with a level of effort and resources consistent with the commercially
reasonable practices normally devoted by a similarly situated pharmaceutical
company (where BMS is the Party) or a similarly situated biotechnology company
(where Five Prime is the Party), as part of an active and continuing program of
development or commercialization of a pharmaceutical product of similar market
potential, at a similar stage of its product life, taking into account the
competitiveness of the marketplace, the proprietary position of the product, the
regulatory status, the pricing and launching strategy and the relative safety
and efficacy.  “Commercially Reasonable Efforts” of a Party shall require that
such Party (on its own or acting through any of its Affiliates, sublicensees or
subcontractors), at a minimum: (a) promptly assign responsibility for such
obligations to qualified employees, set annual goals and objectives for carrying
out such obligations, and monitor and hold employees accountable for progress
with respect to such goals and objectives; (b) set and seek to achieve specific
and meaningful objectives for carrying out such obligations; and (c) make and
implement decisions and allocate resources designed to diligently advance
progress with respect to such objectives.

1.34“Committee” means the JDC, the JCC, or the JSC, as applicable.

1.35“Confidential Information” of a Party means, subject to Section 9.2, all
Know-How, unpublished patent applications and other non-public information and
data of a financial, commercial, business, operational or technical nature of
such Party that is disclosed by or on behalf of such Party or any of its
Affiliates or otherwise made available to the other Party or any of its
Affiliates, in each case in connection with this Agreement, the Existing
Clinical Agreement or the Confidentiality Agreement, whether made available
orally, visually, in writing or in electronic form.  Collaboration Intellectual
Property shall be deemed Confidential Information of both Parties.  

1.36“Confidentiality Agreement” is defined in Section 13.7(b).

1.37“Control” or “Controlled” means the possession by a Party (whether by
ownership, license or otherwise) of, (a) with respect to any tangible Know-How,
the legal authority or right to physical possession of such tangible Know-How,
with the right to provide them to the other Party on the terms and conditions
set forth herein, or (b) with respect to Patents, intangible Know-How or other
intellectual property rights, the legal authority or right to grant a license,
sublicense, access or right to use (as applicable) under such Patents,
intangible Know-How or other intellectual property rights to the other Party on
the terms and conditions set forth herein, in each case of (a) and (b) without
breaching the terms of any agreement with a

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Third Party in existence as of the time such Party or its Affiliates would first
be required hereunder to grant the other Party such access, right to use or
(sub)license.

1.38“Co-Promote Opt-in Deadline” is defined in Section 6.5(c).

1.39“Co-Promote Option” is defined in Section 6.5(a).

1.40“Co-Promote” or “Co-Promotion” means, with respect to any Co-Promotion
Product, the joint Detailing of such Co-Promotion Product to the Co-Promotion
Target Audience in the Co-Promotion Territory using a coordinated sales force
consisting of sales representatives of both Parties.

1.41“Co-Promotion Agreement” is defined in Section 6.5(d).

1.42“Co-Promotion Product” is defined in Section 6.5(a).

1.43“Co-Promotion Target Audience” means, with respect to each Co-Promotion
Product, and on an Indication-by-Indication basis, any or all of those classes
of physicians that customarily prescribe, or that would reasonably be expected
to prescribe or administer products to treat or prevent any Indication for which
the Co-Promotion Product receives Regulatory Approval in the Co-Promotion
Territory as well as patients indicated for treatment with the Co-Promotion
Product based upon the Co-Promotion Product labeling.

1.44“Co-Promotion Territory” means the fifty (50) states of the United States
and the District of Columbia.

1.45“Covered by” or “Cover” or the like, means, with respect to a given molecule
(including an Antibody, peptide or chemical compound) or product, that the
composition of matter, manufacture or use of such molecule or product (including
any molecule contained therein) is claimed by a Valid Claim.

1.46“CSF1R” means colony stimulating factor 1 receptor.

1.47“CSF1R Antagonist” means any molecule (including Antibodies, peptides and
chemical compounds) that (a) has been raised, engineered or otherwise optimized
to bind specifically and directly to CSF1R and (b) (i) competes for binding to
CSF1R with colony stimulating factor 1 and/or interleukin-34, or (ii) once bound
to CSF1R, (A) exhibits antagonistic activity against CSF1R with, in the case of
a chemical compound, a half maximal inhibitory concentration (IC50) of *** or
less in a kinase activity assay for CSF1R activity or (B) depletes cells
expressing CSF1R, including by blocking dimerization of CSF1R or through
Antibody-dependent cell-mediated cytotoxicity, Antibody-mediated
cytotoxic-induced apoptosis, redirected T cells or immune effector cells to
which such Antibody is grafted.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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1.48“CSF1R Antibodies” means any Antibodies that (a) have been raised,
engineered or otherwise optimized to bind specifically and directly to CSF1R,
and (b) (i) compete for binding to CSF1R with colony stimulating factor 1 and/or
interleukin-34, or (ii) once bound to CSF1R, (A) exhibit antagonistic activity
against CSF1R or (B) deplete cells expressing CSF1R, including by blocking
dimerization of CSF1R or through Antibody-dependent cell-mediated cytotoxicity,
Antibody-mediated cytotoxic-induced apoptosis, redirected T cells or immune
effector cells to which such Antibody is grafted.

1.49“Current Combination Trial” means the Phase 1 Clinical Trial of FPA008 in
combination with Nivolumab ongoing as of the Execution Date pursuant to the
Existing Clinical Agreement.

1.50“Current Five Prime Non-I-O Studies” means (a) the Phase 1 Clinical Trial of
FPA008 in rheumatoid arthritis (or “RA”) that is ongoing as of the Execution
Date and (b) the Phase 1/2 Clinical Trial in pigmented villonodular synovitis
(or “PVNS”) that is ongoing as of the Execution Date.

1.51“Detail” means that part of an in-person, face-to-face sales call during
which a sales representative, who is trained with respect to a Co-Promotion
Product, including its labeling and any promotional materials, makes a
presentation of the Co-Promotion Product to the Co-Promotion Target Audience
such that the relevant characteristics of the Co-Promotion Product are described
by the sales representative in a fair and balanced manner consistent with the
requirements of the Co-Promotion Agreement and all Applicable Laws in a manner
that is customary in the industry for the purpose of promoting a prescription
pharmaceutical product.

1.52“Develop” or “Development” means all development activities for any Licensed
Product that are directed to obtaining Marketing Approval(s) of such Licensed
Product and to support appropriate usage for such Licensed Product in the Field,
including: all research, non-clinical, preclinical and clinical activities,
testing and studies of such Licensed Product; toxicology, pharmacokinetic,
pharmacodynamic, drug-drug interaction, safety, tolerability and pharmacological
studies; distribution of such Licensed Product for use in Clinical Trials
(including placebos and comparators); statistical analyses; and the preparation,
filing and prosecution of any IND or BLA for such Licensed Product; development
activities directed to label expansion (including prescribing information)
and/or obtaining Marketing Approval for one or more additional Indications
following initial Marketing Approval; development activities conducted after
receipt of Marketing Approval that are required or requested in writing by a
Regulatory Authority as a condition of, or in connection with, obtaining or
maintaining a Marketing Approval; and pharmacoeconomic studies relating to the
Indication for which the applicable Licensed Product is being developed; in each
case above, including investigator- and/or institution-sponsored studies for
which a Party is providing material or assistance or otherwise has written
obligations to such investigator and/or institution; and all regulatory
activities related to any of the foregoing; provided, however, that Development
shall exclude

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Commercialization and manufacturing activities (including manufacturing
activities related to Development).  

1.53“Development Expenses” means, with respect to any Five Prime Independent
Development Path, (A) internal FTE costs of Five Prime or any of its Affiliates
charged on an FTE basis and at the FTE Rate after the Effective Date that are
directly attributable or reasonably allocable to Preclinical Development,
manufacturing or Development of the Licensed Antibody or Licensed Product and
all other Active Ingredients being tested with respect to such Five Prime
Independent Development Path, including all Five Prime Unilateral Studies with
respect thereto but excluding the Current Combination Trial, and (B) direct
out-of-pocket costs that are incurred after the Effective Date by Five Prime or
any of its Affiliates that are directly attributable or reasonably allocable to
the Preclinical Development, manufacturing or Development activities described
in (A).

Development Expenses shall include:

(a)internal FTE costs and direct out-of-pocket costs incurred in connection with
the planning and conduct of any Preclinical Development or Clinical Trials;

(b)nonclinical costs incurred in connection with activities such as process
development, analytical testing/method transfer, stability testing, statistical
analysis, and QC release testing and QA/QC method development costs for the
applicable Licensed Antibody, Licensed Product or other Active Ingredients,
including raw materials and intermediates therefor;

(c)costs incurred to develop and test any biomarker or diagnostic test for use
with the applicable Licensed Antibody, Licensed Product or other Active
Ingredients;

(d)manufacturing costs (including amounts paid to BMS as Service Fees or other
payments pursuant to Section 5.3(d) or 5.3(e)) for (1) Licensed Product and
other Active Ingredients for use in Preclinical Development or Clinical Trials,
(2) samples of Licensed Product or other Active Ingredients to be provided to
Regulatory Authorities, (3) purchase of Marketed BMS Molecules on the open
market, and (4) the manufacture, purchase or packaging of comparators or placebo
or other Third Party molecules for use in Clinical Trials, as well as the direct
costs and expenses of disposal of drugs and other supplies used in such Clinical
Trials; and

(e)regulatory expenses allocable to such Five Prime Independent Development
Plan.

1.54“Development Plan” is defined in Section 4.2(a).

1.55“Disclosing Party” is defined in Section 9.1(a).

1.56“Dollars” means the U.S. dollar, and “$” shall be interpreted accordingly.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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1.57“Effective Date” means the date this Agreement becomes effective, as
determined in accordance with Section 13.18(b).

1.58“EMA” means the European Medicines Agency or any successor entity thereto.

1.59“Entity” means a partnership, limited partnership, limited liability
partnership, corporation, limited liability company, business trust, joint stock
company, trust, incorporated association, joint venture or similar entity or
organization.

1.60“EU” means the then-current list of member states in the European Union.

1.61“Excluded Third Party Licenses” means the ICOS Agreement and the Lonza
Agreement, except as set forth in Section 3.9(a).

1.62“Executive Officer” means, in the case of BMS, its *** (or, by designation
of the ***, the *** or ***) and in the case of Five Prime, the *** of Five Prime
(or, by designation of the ***, the *** or the ***).

1.63“Exempted Indication” means, with respect to a Licensed Antibody or Licensed
Product (or combination therapy relating thereto), any therapeutic field for
which BMS determined in good faith that there was a Safety Reason and terminated
the Licensed Antibody or Licensed Product (or combination therapy relating
thereto) under Section 10.2(a)(ii) for such Safety Reason.

1.64“Existing Clinical Agreement” means that certain Clinical Trial
Collaboration Agreement, effective November 21, 2014, between Five Prime and
BMS.

1.65“Existing Third Party Licenses” means any agreements entered into by Five
Prime with a Third Party prior to the Effective Date, including any amendments
thereto as of the Effective Date, pursuant to which Five Prime Controls any
Know-How or Patents that are necessary or reasonably useful for the research,
development, manufacture, distribution, use, importation, exportation or sale of
a Licensed Antibody or a Licensed Product, but excluding all Excluded Third
Party Licenses, except as set forth in Section 3.9(a).

1.66“FDA” means the United States Food and Drug Administration or any successor
entity thereto.

1.67“Field” means the diagnosis, prevention, treatment or control of any
disease, disorder or condition in humans or animals.  

1.68“First Commercial Sale” means with respect to any Licensed Product (or any
Biosimilar Product) in any country or jurisdiction, the first sale of such
Licensed Product (or Biosimilar Product) to a Third Party for distribution, use
or consumption in such country or

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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jurisdiction after Marketing Approvals have been obtained for such Licensed
Product (or Biosimilar Product) in such country or jurisdiction.

1.69“Five Prime Claims” is defined in Section 12.2.

1.70“Five Prime Co-Promote Support” is defined in Section 6.5(d)(ii).

1.71“Five Prime Competing Program” is defined in Section 3.5(b).

1.72“Five Prime Damages” is defined in Section 12.2.

1.73“Five Prime Development Activities” means the conduct by Five Prime of the
Current Combination Trial, the Current Five Prime Non-I-O Studies, any Five
Prime Independent Development Paths, and any Preclinical Studies.

1.74“Five Prime Indemnitees” is defined in Section 12.2.

1.75“Five Prime Independent Development Path” is defined in Section 4.3(c)(vi).

1.76“Five Prime Library” means Five Prime’s proprietary protein library
(including any modifications or improvements thereto), comprising (a) cDNAs
encoding putative secreted proteins and the extracellular domains of
transmembrane proteins; and (b) synthetically generated polypeptides
corresponding to proteins or functional fragments thereof.

1.77“Five Prime Licensed Know-How” means all scientific and technical
information, data, and Know-How known to and Controlled by Five Prime as of the
Effective Date or during the Term (including Five Prime’s interest in
Collaboration Know-How jointly owned with BMS) that is necessary or reasonably
useful for the testing, development, manufacture, distribution, use,
importation, exportation or sale of a Licensed Antibody or a Licensed Product
(other than any Active Ingredients that are not Licensed Antibodies), including
all biological, chemical, pharmacological, toxicological, clinical, assay and
other methods of screening, related structure activity relationship Know-How,
and trade secrets, but excluding (a) all information, data or Know-How within
the Five Prime Platform Technology, (b) all Know-How licensed to Five Prime by a
Third Party pursuant to a license agreement that is not a Third Party License,
(c) all Know-How that is Unilateral Intellectual Property, except to the extent
that BMS has reimbursed Five Prime for the Development Expenses for such Five
Prime Unilateral Studies pursuant to Section 4.4 and (d) all Know-How that comes
into Five Prime’s Control as a result of a Change of Control of Five Prime.

1.78“Five Prime Licensed Patents” means any Patent that (a) is Controlled by
Five Prime as of the Effective Date or during the Term (including Five Prime’s
interest in any Collaboration Patent jointly owned with BMS) and (b) is
necessary or reasonably useful for the testing, development, manufacture,
distribution, use, importation, exportation or sale of a Licensed Antibody or a
Licensed Product (other than any Active Ingredients that are not

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Licensed Antibodies), but excluding (i) all Patents within the Five Prime
Platform Technology, (ii) all Patents licensed to Five Prime by a Third Party
pursuant to a license agreement that is not a Third Party License, (iii) all
Unilateral Patents, except to the extent that BMS has reimbursed Five Prime for
the Development Expenses for such Five Prime Unilateral Studies pursuant to
Section 4.4, and (iv) all Patents that come into Five Prime’s Control as a
result of a Change of Control of Five Prime.  As of the Execution Date, the Five
Prime Licensed Patents are listed in Exhibit C.

1.79“Five Prime Licensed Technology” means Five Prime Licensed Patents and Five
Prime Licensed Know-How.

1.80“Five Prime Pipeline Asset” means a Proprietary internal, in-licensed or
acquired Antibody, peptide or chemical compound of Five Prime (other than a
Licensed Antibody or Licensed Product) that Five Prime has exclusive (or
co-exclusive) rights to develop and commercialize in one or more Major Markets,
other than (A) an anti-PD-1 antagonist molecule (including Antibodies, peptides
and chemical compounds) or (B) an anti-PD-L1 antagonist molecule (including
Antibodies, peptides and chemical compounds).

1.81“Five Prime Pipeline Know-How” means all scientific and technical
information, data, and Know-How known to and Controlled by Five Prime as of the
Effective Date or during the Term (including Five Prime’s interest in any
Collaboration Know-How jointly owned with BMS) that is necessary or reasonably
useful for the development of a Five Prime Pipeline Asset in combination with a
Licensed Antibody or a Licensed Product (other than any Active Ingredients that
are not Licensed Antibodies) pursuant to the Development Plan, but excluding (a)
all Five Prime Licensed Know-How, (b) all information, data or Know-How within
the Five Prime Platform Technology, (c) all Know-How that is Unilateral
Intellectual Property, except to the extent that BMS has reimbursed Five Prime
for the Development Expenses for such Five Prime Unilateral Studies pursuant to
Section 4.4 and (d) all Know-How that comes into Five Prime’s Control as a
result of a Change of Control of Five Prime.

1.82“Five Prime Pipeline Patents” means any Patent that (a) is Controlled by
Five Prime as of the Effective Date or during the Term (including Five Prime’s
interest in any Collaboration Patent jointly owned with BMS) and (b) is
necessary or reasonably useful for the development of a Five Prime Pipeline
Asset in combination with a Licensed Antibody or a Licensed Product (other than
any Active Ingredients that are not Licensed Antibodies) pursuant to the
Development Plan, but excluding (i) all Five Prime Licensed Patents, (ii) all
Patents within the Five Prime Platform Technology, (iii) all Unilateral Patents,
except to the extent that BMS has reimbursed Five Prime for the Development
Expenses for such Five Prime Unilateral Studies pursuant to Section 4.4, and
(iv) all Patents that come into Five Prime’s Control as a result of a Change of
Control of Five Prime.  

1.83“Five Prime Pipeline Technology” means Five Prime Pipeline Patents and Five
Prime Pipeline Know-How.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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1.84“Five Prime Platform Technology” means any and all Patents, information,
data and Know-How Controlled by Five Prime as of the Effective Date or during
the Term pertaining to: (i) the Five Prime Library; (ii) the design,
composition, and methods of generating or screening the Five Prime Library;
(iii) Five Prime’s protein expression technology; (iv) Five Prime’s in vivo or
in vitro screening technology, including the Rapid In Vivo Protein Production
System (RIPPS) technology; or (v) any bioinformatics software applications used
in connection with the foregoing, but excluding in each case any Patents,
Materials and Know-How specifically and directly related to a specific protein
or its biological activity, function or utility.

1.85“Five Prime Reserved Target” means (a) *** and (b) ***.

1.86“Five Prime Unilateral Studies” means the Current Five Prime Non-I-O
Studies, the Preclinical Studies and the studies in any Five Prime Independent
Development Paths.

1.87“FPA008” means the Proprietary Five Prime CSF1R Antibody known as FPA008.

1.88“FTE” means the equivalent of a full-time individual’s work for a *** period
(consisting of at least a total of *** per year of dedicated effort).  Any
person who devotes less than *** per year on the applicable activities shall be
treated as an FTE on a pro-rata basis, based upon the actual number of hours
worked by such person on such activities, divided by ***.  For the avoidance of
doubt, no individual shall count as more than one (1) FTE for any year.  FTE
activities shall not include the work of general corporate or administrative
personnel.

1.89“FTE Rate” means the applicable annual rate for an FTE at an initial rate of
*** per FTE per year.  Commencing January 1, *** and on each January 1
thereafter during the Term, the FTE Rate shall be automatically increased (or
decreased) for the Calendar Year beginning on such January 1 by the lesser of
(i) the percentage increase (or decrease) in the Producer Price Index (PPI) for
the pharmaceutical and medicine manufacturing industry (code 3254) as published
by the United States Department of Labor during the Calendar Year immediately
preceding such January 1; and (ii) ***, in each case rounded to the nearest
whole Dollar.

1.90“Fully-Burdened Manufacturing Costs” means, with respect to a Five Prime
Pipeline Asset supplied by or on behalf of Five Prime:

(a)if such Five Prime Pipeline Asset (or any precursor or intermediate thereof)
is manufactured by a Third Party manufacturer, (i) the actual Third Party costs
of such manufacturing incurred by Five Prime, including the costs of raw
materials, intermediates and components, drug substance and drug product
manufacturing, labeling and packaging, quality assurance and stability testing,
QC release testing of drug substance and drug product, QA batch record review
and release of product, storage and freight, shipping, tariffs and export fees,
plus (ii) any internal costs incurred by Five Prime in association with such
manufacturing, including for oversight and quality control and assurance; plus

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Confidential EXECUTION VERSION

(b)if such Five Prime Pipeline Asset (or any precursor or intermediate thereof)
is manufactured by Five Prime or its Affiliate, the actual, fully-burdened cost
of such manufacturing, including the cost of raw materials, direct labor and
benefits, a proportionate share of indirect manufacturing costs, intellectual
property acquisition and licensing costs (including royalties, upfront fees,
etc.) paid by Five Prime with respect to the manufacture of such product, and
all other reasonable and customary manufacturing-related costs for such product,
including actual factory, plant or equipment start-up or start-up amortization
costs, scale-up expenses, and freight in/out and sales and excise taxes imposed
thereon, customs and duty and charges levied by government authorities, and all
costs of packaging.  Such fully-burdened costs shall be calculated in accordance
with GAAP consistently applied, and without any intercompany profit or markup.  

1.91“GAAP” means U.S. generally accepted accounting principles, consistently
applied.

1.92“***” means ***.

1.93“Governmental Authority” means any federal, state, national, state,
provincial or local government, or political subdivision thereof, or any
multinational organization or any authority, agency or commission entitled to
exercise any administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power, any court or tribunal (or any
department, bureau or division thereof, or any governmental arbitrator or
arbitral body).  

1.94“ICOS Agreement” means that certain CHEF1 Non-Exclusive License Agreement
between CMC ICOS Biologics, Inc. (as successor in interest to ICOS Corporation)
(“ICOS”) and Five Prime effective April 18, 2006, amended as of February 14,
2008, January 22, 2010, and February 3, 2010.

1.95“ICOS Sublicense” is defined in Section 3.9(a)(ii).

1.96“Immuno-Oncology” shall mean the treatment of cancer through the targeting
of the host immune system to modulate and counteract immune attenuation pathways
that allow for tumor escape from immune system recognition and destruction.

1.97“Incremental Royalty” is defined in Section 7.3(a)(ii).

1.98“IND” means any investigational new drug application, Clinical Trial
application, Clinical Trial exemption or similar or equivalent application or
submission for approval to conduct human clinical investigations filed with or
submitted to a Regulatory Authority in conformance with the requirements of such
Regulatory Authority.

1.99“Indemnified Party” is defined in Section 12.3.

1.100“Indemnifying Party” is defined in Section 12.3.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Confidential EXECUTION VERSION

1.101“Initial Commercial Plan” is defined in Section 6.5(b).

1.102“Initiation” or “Initiate” means, with respect to a Clinical Trial of a
Licensed Product, the first dosing of the first human subject for such Clinical
Trial.

1.103“Joint Commercialization Committee” or “JCC” is defined in Section 2.3.

1.104“Joint Development Committee” or “JDC” is defined in Section 2.2.

1.105“Joint Steering Committee” or “JSC” is defined in Section 2.4.

1.106“Know-How” means any information and materials, including discoveries,
improvements, modifications, processes, methods, assays, designs, protocols,
formulas, data, inventions, algorithms, forecasts, profiles, strategies, plans,
results, know-how and trade secrets (in each case, patentable, copyrightable or
otherwise), but excluding any Patents and any information that is not
Confidential Information.

1.107“Knowledge” with respect to a Party, means the actual knowledge, after due
inquiry, of any Vice President, Senior Vice President, Executive Vice President
or President or Chief Executive Officer of such Party as of the Execution Date.

1.108“Licensed Antibodies” means (a) all CSF1R Antibodies Controlled by Five
Prime as of the Effective Date, including FPA008 and the Antibodies set forth on
Exhibit B, (b) all CSF1R Antibodies Controlled or otherwise researched or
developed by BMS during the Restricted Period, and (c) all modifications,
derivatives, fragments or variants of any CSF1R Antibody set forth in part (a)
or (b) of this definition.

1.109“Licensed Product” means any human pharmaceutical product containing a
Licensed Antibody (alone or with other Active Ingredients) for use in the
Territory in the Field in all forms, presentations, formulations and dosage
forms.

1.110“Liens” means any lien, pledge, encumbrance, mortgage, security interest,
purchase option, call or similar right, conditional and installment sale
agreements, charges or claims of any kind (excluding any license or other rights
granted to Third Parties under any of the Five Prime Licensed Technology that do
not conflict with or otherwise limit the rights granted to BMS under this
Agreement).

1.111“Lonza Agreement” means that certain Licence Agreement between Lonza Sales
AG (“Lonza”) and Five Prime, dated November 20, 2014.

1.112“Lonza Sublicense” is defined in Section 3.9(a)(iii).

1.113“Major European Country” means France, Germany, Italy, Spain or the United
Kingdom.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Confidential EXECUTION VERSION

1.114“Major Markets” means the U.S., Japan and the Major European Countries.

1.115“Manufacturing Process” is defined in Section 5.2.

1.116“Manufacturing Process Support” is defined in Section 5.2.

1.117“Manufacturing Process Transfer” is defined in Section 5.2.

1.118“Marketed BMS Combination” is defined in Section 4.3(c)(v).

1.119“Marketed BMS Molecule” is defined in Section 4.3(c)(v).

1.120“Marketing Approval” means all approvals necessary for the commercial sale
of a Licensed Product in the Field in a given country or regulatory
jurisdiction, including, where applicable, receipt of pricing and reimbursement
approvals.

1.121“Net Sales” means the gross amount billed or invoiced by or for the benefit
of BMS and its Affiliates, licensees and sublicensees (each of the foregoing, a
“Seller”) to independent, unrelated persons (“Buyers”) in bona fide arm’s length
transactions with respect to a Licensed Product, less the following deductions,
in each case to the extent actually allowed and taken by such Buyers and not
otherwise recovered by or reimbursed to Seller in connection with such Licensed
Product:

(a)transportation charges and other related charges, such as insurance;

(b)sales and excise taxes *** or customs duties paid by the selling party and
any other similar governmental charges or taxes imposed specifically upon the
sale of such Licensed Product and actually paid; provided, that with respect to
*** fees, BMS and its Affiliates shall have used Commercially Reasonable Efforts
to review and, where possible and if appropriate and in good faith, to dispute
the preliminary calculation to ensure it is without error that would results in
an overcharge of fees;

(c)discounts and chargebacks actually granted, allowed or incurred in connection
with the sale of such Licensed Product and are not otherwise attributable to
other products of BMS and its Affiliates;

(d)allowances or credits to customers actually given and not in excess of the
selling price of such Licensed Product, on account of rejection, outdating,
recalls or return of such Licensed Product; amounts written off by reason of
uncollectible debt, after commercially reasonable debt collection efforts have
been exhausted, provided that such amounts shall be added back to Net Sales if
and when collected; and

(e)rebates, reimbursements, fees or similar payments to wholesalers and other
distributors, pharmacies and other retailers, buying groups (including group
purchasing

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

16

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organizations), health care insurance carriers, pharmacy benefit management
companies, health maintenance organizations, Governmental Authorities, or other
institutions or health care organizations, where such payments are not
attributable to other products of BMS and its Affiliates.

(f)No deduction shall be made for any item of cost incurred by any Seller in
Developing or Commercializing Licensed Products except as permitted pursuant to
clauses (a) to (e) of the foregoing sentence; provided, that Licensed Products
transferred to Buyers in connection with *** shall give rise to Net Sales only
to the extent that any Seller invoices or receives amounts therefor.  If a
single item falls into more than one of the categories set forth in clauses
(a)-(e) above, such item may not be deducted more than once.  

(g)Such amounts shall be determined from the books and records of the Seller.

(h)Sales between BMS and its Affiliates and sublicensees shall be disregarded
for purposes of calculating Net Sales except if such purchaser is a distributor,
pharmacy or end user.

(i)Notwithstanding the foregoing, solely for the purpose of calculating Net
Sales under this Agreement, any discount to a Licensed Product sold to a Third
Party in any given country shall be no greater, on a weighted-average percentage
basis based on the gross selling price in such country prior to discount, than
the weighted-average percentage discount applied to a BMS Combined Product sold
in such country for use in combination with such Licensed Product to a Third
Party for the applicable accounting period. For clarification, Exhibit H sets
forth examples illustrating how Net Sales are intended to be calculated in
accordance with this paragraph.

(j)If a Licensed Product is sold in the form of a combination product containing
both a Licensed Antibody and one or more Active Ingredient(s) (whether
coformulated or copackaged), which is not a Licensed Antibody (a “Combination
Product”), the Net Sales of such Licensed Product for the purpose of calculating
royalties owed under this Agreement for sales of such Licensed Product, shall be
determined as follows: first, BMS shall determine the actual Net Sales of such
Combination Product (using the above provisions) and then such amount shall be
multiplied by the fraction A/(A+B), where A is the invoice price of such
Licensed Product, if sold separately, and B is the total aggregate invoice price
of all other Active Ingredients in such Combination Product if sold separately.
If any other Active Ingredient in such Combination Product is not sold
separately, Net Sales shall be calculated by multiplying actual Net Sales of
such Combination Product by a fraction A/C where A is the invoice price of such
Licensed Product if sold separately, and C is the invoice price of such
Combination Product.  If neither such Licensed Product nor any other Active
Ingredient in such Combination Product is sold separately, the adjustment to Net
Sales shall be determined by the Parties in good faith to reasonably reflect the
fair market value of the contribution of such

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

17

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Licensed Product in such Combination Product to the total fair market value of
such Combination Product.

(k)With respect to any sale of any Licensed Product in a given country for any
substantive consideration other than monetary consideration on arm’s length
terms (which has the effect of reducing the invoiced amount below what it would
have been in the absence of such non-monetary consideration), for purposes of
calculating the Net Sales, such Licensed Product shall be deemed to be sold
exclusively for cash at the average Net Sales price charged to Third Parties for
cash sales of such Licensed Product in such country during the applicable
reporting period (or if there were only de minimis cash sales in such country,
at the fair market value as determined in good faith based on pricing in
comparable markets).  Notwithstanding the foregoing, Net Sales shall not include
amounts (whether actually existing or deemed to exist for purposes of
calculation) for Licensed Products distributed for use in Clinical Trials.

(l)Net Sales shall be calculated on an accrual basis, in a manner consistent
with BMS’s accounting policies for external reporting purposes, as consistently
applied, in accordance with GAAP.  

1.122“Nivolumab” means the Proprietary Antibody of BMS that binds to the PD-1
Target and is known as nivolumab or OPDIVO®.

1.123“Non-Exempted Indications” means, with respect to a Licensed Antibody or
Licensed Product (or combination therapy relating thereto) that was terminated
under Section 10.2(a)(ii) for a Safety Reason, any field or indication other
than an Exempted Indication for such Licensed Antibody or Licensed Product (or
combination therapy relating thereto).

1.124“Non-Registrational Clinical Trial” means a controlled human Clinical Trial
other than a Registration-Enabling Clinical Trial (regardless of whether such
trial is referred to as a “phase 1 clinical trial”, a “phase 1/2 clinical
trial”, a “phase 2 clinical trial”, a “phase 2/3 clinical trial”, or a “phase 3
clinical trial”).

1.125“Oncology” means the treatment or prevention of cancer.

1.126“Ono” means Ono Pharmaceutical Co. Ltd.

1.127“Ono-BMS Agreements” means those certain Collaboration Agreements between
BMS and Ono dated as of September 20, 2011 and as of July 23, 2014, as amended
from time to time, and agreements between Ono and BMS and their Affiliates
relating thereto that may be in effect from time to time.

1.128“Ono Territory” means Japan, South Korea and Taiwan.

1.129“Operational Matters” is defined in Section 4.3(j).

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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1.130“***” means ***.

1.131“Patent” means (a) an issued patent or pending patent application and any
patent issuing therefrom, including any certificate of invention, application
for certificate of invention, utility model, or application for utility model,
provisional, converted provisional, non-provisional, divisional, continuation,
continuation-in-part, and continued prosecution application; and (b) any
substitution, reissue, reexamination, renewal, confirmation, revalidation, 
extension or supplementary protection certificate with respect to any of the
foregoing.

1.132“Person” means any individual, unincorporated organization or association,
governmental authority or agency or Entity.

1.133“Phase 1 Clinical Trial” means a human Clinical Trial of a Licensed Product
that would satisfy the requirements of 21 CFR 312.21(a) or corresponding foreign
regulations, regardless of whether such trial is referred to as a “phase 1
clinical trial” in the Development Plan.

1.134“Phase 1/2 Clinical Trial” means a single human Clinical Trial of a
Licensed Product with a protocol that combines a Phase 1 Clinical Trial with a
Phase 2 Clinical Trial, regardless of whether such trial is referred to as a
“phase 1/2 clinical trial” in the Development Plan.

1.135“Phase 2 Clinical Trial” means a controlled human Clinical Trial of a
Licensed Product that would satisfy the requirements of 21 CFR 312.21(b) or
corresponding foreign regulations, regardless of whether such trial is referred
to as a “phase 2 clinical trial” in the Development Plan. For clarity, a trial
called a Phase 1/2 or Phase 1b/2 trial shall be considered a Phase 2 trial if it
satisfies the requirements of 21 C.F.R. 312.21(b).

1.136“Phase 3 Clinical Trial” means a controlled or uncontrolled human Clinical
Trial of a Licensed Product that would satisfy the requirements of 21 CFR
312.21(c) or corresponding foreign regulations, regardless of whether such trial
is referred to as a “phase 3 clinical trial” in the Development Plan.  

1.137“Preclinical Development” means all research and development activities,
with respect to a Licensed Antibody or Licensed Product, other than (i) the
conduct of a Clinical Trial with respect to such Licensed Antibody or Licensed
Product in any disease, Indication and/or combination and (ii) regulatory
activities directed at utilizing the results of such Clinical Trial to obtain or
maintain Marketing Approval for the Licensed Antibody or Licensed Product in
such disease, Indication and/or combination. Preclinical Development includes:
research; non-clinical and preclinical testing; all non-human in vivo and in
vitro studies, including efficacy, toxicity, pharmacodynamic and pharmacokinetic
testing; biomarker development; drug-drug interaction testing; formulation;
manufacturing process development for drug product; and regulatory affairs and
submission of an IND filing to the appropriate Regulatory Authority(ies). For
clarity, Preclinical Development activities shall continue to be defined as
Preclinical Development if the

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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applicable Party also is conducting or has conducted Clinical Development
activities with respect to such Licensed Antibody or Licensed Product.

1.138“Preclinical Studies” means Preclinical Development activities undertaken
by or on behalf of Five Prime solely for the purpose of (a) evaluating or
assessing the feasibility or desirability of pursuing, or scientific rationale
for, a potential Five Prime Independent Development Path or (b) provide the
basis of, or additional support for, a Five Prime Independent Development Path.

1.139“Product Infringement” is defined in Section 8.4(a)(i).

1.140“Product Marks” is defined in Section 8.6(a).

1.141“Product-Specific Patent” means any Five Prime Licensed Patent or
Collaboration Patent in which all claims are specifically directed to the
composition of matter of, or method of manufacture or use, formulation, or
pharmaceutical composition of (a) one or more CSF1R Antibodies (whether alone or
in combination with another agent) or (b) CSF1R.  

1.142“Program Addition Notice” is defined in Section 4.3(f).

1.143“Proprietary” means, with respect to a Person and a molecule (including an
Antibody, peptide or chemical compound) or product, that such Person: (a) owns
(i) a Patent that claims the composition of matter, manufacture or use of such
molecule or product or a component thereof, (ii) a patentable invention directed
to the composition of matter, manufacture or use of such molecule or product or
a component thereof, or (iii) a trademark or application for a trademark that is
used or intended to be used specifically in connection with the
commercialization of such molecule or product or a component thereof; (b) has a
license or option to obtain a license to a Patent, patentable invention,
trademark or trademark application described in clause (a), which license or
option permits or would permit such Person to use such Patent, patentable
invention or trademark to commercialize such molecule or product or a component
thereof; or (c) possesses (whether directly or through rights granted by another
Person) Regulatory Exclusivity with respect to such molecule or product or a
component thereof.

1.144“PVNS Milestones” is defined in Section 7.2.

1.145“Receiving Party” is defined in Section 9.1(a).

1.146“Registration-Enabling Clinical Trial” means a human Clinical Trial that
satisfies at least one of the following criteria (regardless of whether such
trial is referred to as a “phase 1 clinical trial”, a “phase 2 clinical trial”,
a “phase 2b clinical trial” or a “phase 3 clinical trial”):

(a)would, based on interactions with a Regulatory Authority or otherwise, (1)
satisfy the requirements of 21 CFR 312.21(c) or corresponding foreign
regulations or (2) is

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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designed in a manner to allow for the addition of additional patients such that
it could satisfy the requirements of 21 CFR 312.21(c) or corresponding foreign
regulations; or

(b)is otherwise intended to support (either alone or together with one or more
additional Phase 3 Clinical Trials) an application for marketing approval of a
new product (or a new indication or expanded use for an already approved
product).

1.147“Regulatory Authority” means any applicable Governmental Authority
responsible for granting Marketing Approvals or pricing approvals for Licensed
Products, including the FDA, the EMA and any corresponding national or regional
regulatory authorities.

1.148“Regulatory Exclusivity” means any exclusive marketing rights or data
exclusivity rights (other than patents) conferred by any Regulatory Authority
with respect to a pharmaceutical product, including orphan drug exclusivity, new
chemical entity exclusivity, data exclusivity, pediatric exclusivity, rights
conferred in the United States under the Hatch-Waxman Act or the FDA
Modernization Act of 1997, or rights similar thereto outside the United States.

1.149“Regulatory Materials” means any regulatory application, submission,
notification, communication, correspondence, registration and other filings made
to, received from or otherwise conducted with a Regulatory Authority that are
necessary or desirable in order to Develop or Commercialize a Licensed Antibody
or Licensed Product in the Field in a particular country or
jurisdiction.  “Regulatory Materials” includes any IND, BLA and Marketing
Approval.

1.150“Restricted Period” means:

(a)with respect to BMS, the period commencing on the Effective Date and expiring
on the earlier of (1) the *** anniversary of the first Marketing Approval of a
Licensed Product in a Major Market; and (2) the early termination of this
Agreement pursuant to Article 10;

(b)subject to part (c) of this definition with respect to any particular Region,
with respect to Five Prime, the period commencing on the Effective Date and
expiring on the earlier of (1) *** pursuant to this Agreement, provided,
however, (i) that ***; and (ii) that ***; and (2) the early termination of this
Agreement pursuant to Article 10; and

(c)with respect to Five Prime in a particular Region, the period commencing on
the Effective Date and expiring on the earlier of (1) ***, provided, however,
***; and (2) the early expiration of the Restricted Period with respect to Five
Prime pursuant to part (b) of this definition.  

1.151“Royalty Retention” is defined in Section 6.5(d)(viii).

1.152“Royalty Term” is defined in Section 7.3(b).

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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1.153“Rules” is defined in Section 13.6(b)(i).

1.154“Safety Reason” means it is BMS’s reasonable belief that, based upon an
analysis of the existing information at any time in a manner that is consistent
with BMS’s then-current decision-making policies and procedures, that the
medical risk/benefit of a Licensed Antibody or Licensed Product (or combination
therapy relating thereto) in a given therapeutic field (e.g., Oncology or
immunology) is sufficiently unfavorable as to be incompatible with the welfare
of patients to Develop or Commercialize or to continue to Develop or
Commercialize it in such therapeutic field, which Safety Reason (including the
material data supporting such reason) shall be disclosed to Five Prime (subject
to confidentiality obligations to any Third Party).

1.155“Service Fee” is defined in Section 5.3(d).

1.156“Specified Change of Control” means a Change of Control of Five Prime where
the applicable Third Party is one of the *** largest companies in the
pharmaceutical industry as determined by market capitalization as of the last
day of the Calendar Quarter completed prior to such Change of Control; provided
that a Change of Control where such Third Party is (i) ***or its Affiliate or
Successor, (ii) *** or its Affiliate or Successor, (iii) *** or its Affiliate or
Successor, or (iv) *** or its Affiliate or Successor shall not be a Specified
Change of Control unless at the time of the closing of such Change of Control
such entity satisfies the criteria set forth above and is then commercializing,
or dosing patients in a Registration-Enabling Clinical Trial testing, either (A)
a molecule (including Antibodies, peptides and chemical compounds) that is
Proprietary to such Third Party that (1) ***, and (2) (a) *** or (b) ***, (B) a
molecule (including Antibodies, peptides and chemical compounds) that is
Proprietary to such Third Party that (1) ***, and (2) (a) *** or (b) ***, (x)
*** or (y) ***, or (C) *** that is Proprietary to such Third Party, in any case
((A) through (C)) in the field of Oncology.  For the purposes of this Section
1.156, “Successor” shall mean a Person that is a successor-in-interest to an
Entity named in (i)-(iv), wherein the Persons who were the beneficial owners of
such Entity beneficially own (directly or indirectly) at the time that such
Person became the successor-in-interest to such Entity, *** or more of the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors of such Person.

1.157“Supply Term” is defined in Section 5.3(g).

1.158“Tangible Materials” means, with respect to a Party that is required to
return such Tangible Materials, (i) written materials incorporating the other
Party’s Confidential Information, excluding portions that do not constitute such
other Party’s Confidential Information or (ii) non-written tangible materials of
such other Party that incorporate the Confidential Information of the other
Party, e.g., cell lines, antibodies, mice and other organisms and materials.

1.159“Target” means: (i) a protein and any fragments thereof (that preserve the
utility of the full length protein as a target) including any isoforms, mutants,
and polymorphisms

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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thereof, or (ii) a distinct non-protein biomolecule (e.g., a lipid-bound
carbohydrate) or similar structural information that identifies such
biomolecule.

1.160“Term” is defined in Section 10.1.

1.161“Territory” means all of the countries in the world, including all of their
territories and possessions.

1.162“Third Party” means any Person other than a Party or an Affiliate of a
Party; provided, that, solely for purposes of the definition of “Change of
Control,” Third Party shall not include any “underwriter” within the meaning of
Section 2(a)(11) of the Securities Act of 1933, as amended.

1.163“Third Party Licenses” means the Existing Third Party Licenses and any
Third Party agreement that is deemed to be a Third Party License pursuant to
Section 3.9(c).

1.164“Unilateral BMS Pipeline Patents” is defined in Section 8.2.

1.165“Unilateral Intellectual Property” means any information, discoveries,
improvements, modifications, processes, methods, designs, protocols, formulas,
data, inventions, algorithms, forecasts, profiles, strategies, plans, results,
Know-How and trade secrets, patentable or otherwise, that are discovered,
generated, conceived and/or reduced to practice by or on behalf of Five Prime
(including its Affiliates, employees, agents and contractors) in the course of
the performance of the Five Prime Unilateral Studies during the Term, including
all rights, title and interest in and to the intellectual property rights
(including Patents) therein and thereto.

1.166“Unilateral Patents” is defined in Section 8.2.

1.167“United States” or “U.S.” means the United States of America, including its
territories and possessions.

1.168“Valid Claim” means: (i) a claim in an issued Patent that has not: (a)
expired or been canceled; (b) been declared invalid by an unreversed and
unappealable or unappealed decision of a court or other appropriate body of
competent jurisdiction; (c) been admitted to be invalid or unenforceable through
reissue, disclaimer or otherwise; or (d) been abandoned in accordance with or as
permitted by the terms of this Agreement or by written agreement of the Parties;
or (ii) a claim under any application for a Patent or any application for a
Patent that, in each such case, has been pending *** or less from the date that
the prosecuting Party first receives an action on the merits for such
application for a Patent (excluding restriction requirements, notices to file
missing parts, and the like), and, in any case, that has not been canceled,
withdrawn from consideration, finally determined to be unallowable by the
applicable governmental authority or court for whatever reason (and from which
no appeal is or can be taken), or abandoned.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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1.170Other Defined Terms.

Defined Term

Section

Acquired BMS Competing Program

3.6(d)

Acquired Five Prime Competing Program

3.5(c)

Approved Subcontractor

3.7(a)

Bankrupt Party

13.17(a)

BLA Notification

6.5(b)

BMS Acquiror

3.6(b)

BMS Competing Non-Antibody

3.6(c)

BMS Pipeline Combination

4.3(c)(iv)

Business Combination Transaction

1.26(b)

Commenced

10.2(a)(i)

Data Reimbursement

4.3(i)(xii)

DMFs

4.7(a)(v)

EU Region

1.150(b)

Failing Party

5.3(f)

Filing

7.2

First BLA Approval

7.2

First Marketing Approval

7.2

First Product Approval

4.4(a)

Five Prime Acquiror

3.5(b)

Five Prime Non-Oncology Disease

4.3(c)(ii)

Five Prime Pipeline Combination

4.3(c)(vi)

Five Prime Prosecuted Patents

8.3(b)(i)

HSR

13.18(a)

ICF

4.3(j)

Independent Development Notice

4.3(f)

Indication

7.2

Insolvency Event

10.2(c)

Japanese Region

1.150(b)

Joint IP

8.1(d)

Joint Know-How

8.1(d)

Joint Patent Infringement

8.4(b)(i)

Joint Patents

8.1(d)

Nivolumab Combination

4.3(c)(iii)

Outstanding Voting Securities

1.26(a)

Patent Firm

8.3(a)(i)

Permitted Registrational Studies

4.3(d)(i)

Pharmacovigilance Agreement

4.9

POTV

13.16(a)

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Publication

9.4

PVNS

1.50

Quarterly Report

4.3(b)(iv)

RA

1.50

Region

10.2(a)(i)

Remainder

8.4(a)(vii)

Reserved Target Therapeutic

1.21

Review Period

9.4

ROT Region

1.150(b)

SEC

9.6(c)

Specified Person

1.26(a)

Sunshine Laws

13.16(c)

Supply Failure

5.3(f)

Third Party Licensed Molecule

3.5(a)

Title 11

13.17(a)

Transferee Party

5.3(f)

Unilateral Patents

8.2

Working Group

2.6

 

1.171Interpretation.  In this Agreement, unless otherwise expressly specified:

(a)The words “include”, “includes” and “including” shall be deemed to be
followed by the phrase “without limitation”.

(b)words denoting the singular shall include the plural and vice versa and words
denoting any gender shall include all genders;

(c)words such as “herein”, “hereof”, and “hereunder” refer to this Agreement as
a whole and not merely to the particular provision in which such words appear;

(d)“days” means calendar days;

(e)the Exhibits and other attachments form part of the operative provision of
this Agreement and references to “this Agreement” shall include references to
the Exhibits and attachments;

(f)the captions and headings to this Agreement are for convenience only, and are
to be of no force or effect in construing or interpreting any of the provisions
of this Agreement.  

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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(g)unless specified to the contrary, references to Articles, Sections or
Exhibits mean the particular Articles, Sections or Exhibits of this Agreement
and references to this Agreement include all Exhibits hereto;

(h)the word “notice” shall mean notice in writing (whether or not specifically
stated) and shall include notices, consents, approvals and other written
communications contemplated under this Agreement;

(i)provisions that require that a Party, the Parties or the JDC hereunder
“agree,” “consent” or “approve” or the like shall require that such agreement,
consent or approval be specific and in writing, whether by written agreement,
letter, approved minutes or otherwise;

(j)references to any specific law, rule or regulation, or article, section or
other division thereof, shall be deemed to include the then-current amendments
thereto or any replacement law, rule or regulation thereof;

(k)the word “will” shall be construed to have the same meaning and effect as the
word “shall”; and

(l)the term “and/or” in a sentence shall be construed such that the phrase “X
and/or Y” means “X or Y, or both X and Y”.  

This Agreement should be interpreted in its entirety and the fact that certain
provisions of this Agreement may be cross-referenced in a Section shall not be
deemed or construed to limit the application of other provisions of this
Agreement to such Section and vice versa.

Article 2

GOVERNANCE

2.1Alliance Managers.  Each Party shall appoint an individual to act as its
alliance manager under this Agreement as soon as practicable after the Effective
Date (the “Alliance Manager”).  The Alliance Managers shall: (a) serve as the
primary contact points between the Parties for the purpose of providing the
other Party with information on the progress of such Party’s activities under
this Agreement; (b) be responsible for facilitating the flow of information and
otherwise promoting communication, coordination and collaboration between the
Parties; (c) facilitate the prompt resolution of any disputes; (d) attend all
Committee meetings as non-voting participants; and (e) have the right to attend
all Working Group meetings as non-voting participants.  An Alliance Manager may
also bring any matter to the attention of the applicable Committee if such
Alliance Manager reasonably believes that such matter warrants such
attention.  Each Party may replace its Alliance Manager at any time upon written
notice to the other Party.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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2.2Joint Development Committee.  The Parties shall establish a joint development
committee (the “Joint Development Committee” or the “JDC”), composed of an equal
number of representatives from each Party with a minimum of *** representatives
of each Party, with at least *** such representative of each Party that has
knowledge and expertise in the development of products similar to the relevant
Licensed Product, and in any case with at least *** such representative of each
Party holding the position of *** or above in such Party, to monitor and
coordinate the Development of Licensed Products.  Without limiting the
activities set forth in the following sentence, the JDC shall oversee (i) the
Development of Licensed Antibodies and Licensed Products under the Development
Plan and related manufacturing activities; (ii) the formation of Working Groups,
which may include Working Groups for clinical, regulatory, safety, manufacturing
and intellectual property activities; and (iii) Working Group activities; and
(iv) Five Prime Development Activities that relate to BMS Pipeline Assets. The
JDC shall in particular:

(a)provide overall strategic direction to the Development of Licensed Products,
taking into consideration all relevant scientific and commercial considerations
relevant to the overall Development by the Parties of all Licensed Antibodies
and Licensed Products;

(b)provide a forum for, and facilitate communications between, the Parties with
respect to the Development of Licensed Antibodies and Licensed Products,
including the opportunity for Five Prime to provide BMS updates on Five Prime
Development Activities;

(c)review the implementation of the Development Plan and Five Prime Development
Activities;

(d)review annual reports and review interim material amendments to the
Development Plan;

(e)serve as a forum for receiving updates on Five Prime Development Activities;

(f)review global regulatory strategy with respect to seeking and obtaining
Regulatory Approval of Licensed Products in Major Markets;

(g)review and oversee performance of non-clinical research or biomarker
development with respect to the Development of Licensed Antibodies and Licensed
Products;

(h)review publication and communication strategies with respect to the
Development of Licensed Antibodies and Licensed Products;

(i)review any proposed Five Prime Development Activity and/or approve its
inclusion in the Development Plan pursuant to Section 4.4;

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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(j)monitor each Party’s regulatory actions, material communications and
submissions for the applicable Licensed Antibodies or Licensed Products;

(k)establish Working Groups as needed; and

(l)determine any matter with respect to which an agreement cannot be reached by
any Working Group established by the JDC.

2.3Joint Commercialization Committee.  If Five Prime exercises its Co-Promote
Option, the Parties would promptly form a joint commercialization committee (the
“Joint Commercialization Committee” or the “JCC”).  The JCC would have equal
representation by the Parties.  The JCC would review commercialization plans for
Licensed Products that are being Co-Promoted, serve as a forum for reviewing and
discussing Commercialization strategy, and generally oversee the
Commercialization of Licensed Products that are being Co-Promoted.  The JCC may
establish Working Groups, as appropriate, to carry out its functions.  Upon
cessation of Co-Promotion of Licensed Products by Five Prime for any reason
(including a Specified Change of Control), the JCC would be disbanded.

2.4Joint Steering Committee.  Upon the creation of the JCC, and for so long as
the JCC and JDC concurrently exist, the activities of the Parties pursuant to
the collaboration described herein would be overseen by a joint steering
committee (the “Joint Steering Committee” or the “JSC”), having equal
representation by the Parties.  The JSC would serve as a forum for the review
and discussion of matters referred to the JSC by the JDC or the JCC.  The JSC
may establish Working Groups, as appropriate, to carry out its functions.  Upon
cessation of Co-Promotion of Licensed Products by Five Prime for any reason
(including a Specified Change of Control), the JSC would be disbanded.

2.5Limitation of Committee Authority.  Each Committee shall only have the powers
expressly assigned to in this Article 2 and elsewhere in this Agreement and
shall not have the authority to: (a) modify or amend the terms and conditions of
this Agreement; (b) waive either Party’s compliance with the terms and
conditions of under this Agreement; or (c) determine any such issue in a manner
that would conflict with the express terms and conditions of this Agreement.

2.6Formation of Working Groups. From time to time, the JDC, JCC or JSC may
establish joint working groups (each, a “Working Group”) on an “as needed” basis
to oversee particular projects or activities (including with respect to a
particular Clinical Trial) and coordinate the day-to-day performance of
activities under the Development Plan and Five Prime’s performance of Five Prime
Development Activities, which establishment of Working Groups shall be reflected
in the minutes of the meetings of the applicable Committee.  Each Party’s
representatives on a Working Group shall be members of such Party’s internal
Licensed Product project team having responsibility for aspects of the
day-to-day performance of the relevant activity under the Development Plan or
Five Prime Development Activity.  Such

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Working Groups shall be constituted and shall operate as the establishing
Committee may determine.  Each Working Group and its activities shall be subject
to the oversight of, and shall report to, the Committee that established such
Working Group. In no event shall the authority of the Working Group exceed that
specified for the relevant Committee in this Section 2.6.  Among other
activities, the Parties anticipate that the JDC will establish Working Groups
regarding clinical development, regulatory matters, safety matters and
manufacturing matters that are responsible for the following with respect to the
Five Prime Development Activities in the field of Oncology:

(a)reviewing any IND submitted for a Five Prime Development Activity, as well as
reviewing submissions to any such IND;

(b)reviewing the applicable protocol and any proposed amendments thereto and the
applicable statistical analysis plan;

(c)reviewing the proposed plan for medical monitoring and site audits and the
results of such medical monitoring and site audits;

(d)reviewing any immunogenicity analysis for each Five Prime Development
Activity, including the protocol and the entity selected to conduct the
analysis;

(e)reviewing any bioanalysis plan not set forth in the protocol and any
amendments thereto for any Five Prime Development Activity;

(f)subject to and in accordance with Section 4.3, reviewing proposed
communication strategies and communications with any Regulatory Authority
regarding the conduct of any Five Prime Development Activity;

(g)reviewing any Regulatory Materials, or portions thereof, that relate to a
Five Prime Development Activity;

(h)reviewing the selection of study sites, and any communications to study sites
or IRBs relating to patient safety or early termination/cessation of a Five
Prime Development Activity;

(i)reviewing the template ICF, template case report form and template clinical
site study agreement to be used in a given Five Prime Development Activity;

(j)reviewing the quantities of Licensed Product or BMS Pipeline Asset or Five
Prime Pipeline Asset and any co-medications necessary for the Development Plan
and any Five Prime Development Activities and coordinating the supply of such
quantities by the appropriate Party in accordance with Article 5;

(k)reviewing plans for any Preclinical Studies proposed by Five Prime;

 

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REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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(l)reviewing any additional analyses of, or that include, the data resulting
from a Five Prime Development Activity that is proposed by either Party that are
not included in the statistical analysis plan; provided that, for clarity, such
review shall not apply to analyses by a Party of the monotherapy data for its
own Proprietary agent that is included in a combination Clinical Trial;

(m)reviewing use of any samples resulting from a Five Prime Development
Activity;

(n)reviewing the final Clinical Trial report (and/or final statistical analysis
in accordance with the applicable statistical analysis plan) from each Five
Prime Development Activity; and

(o)discussing any other topics or issues relating to a Five Prime Development
Activity.

2.7Committee Membership and Meetings.

(a)Members.  The initial representatives of each Party on the JDC shall be
designated by each Party as soon as practicable after the Effective Date.  Each
Party may replace its representatives on any Committee by written notice to the
other Party.  Each Committee representative shall have appropriate knowledge and
expertise and sufficient seniority (including budgetary authority, as
applicable) within the applicable Party to make decisions arising within the
scope of the applicable Committee’s responsibilities.  Each Party shall appoint
*** of its representatives on each Committee to act as a co-chairperson of such
Committee.  The Alliance Managers shall jointly prepare and circulate minutes
for each Committee meeting within *** of such meeting.  

(b)Meetings.  Each Committee shall hold meetings at such times as it elects to
do so, but no less frequently than *** such meetings per Calendar Year. A
Committee may meet in person or by means of teleconference, Internet conference,
videoconference or other similar communications equipment.  However, at least
*** each Calendar Year during the period commencing on the Effective Date and
ending on the date of the ***, such meetings will be conducted in person with
the location for such in-person meetings generally alternating between Five
Prime’s and BMS’s facilities in the United States, or such other location as the
applicable Committee may determine.  Each Party shall bear its own expenses
related to participation in and attendance at such meetings by its Committee
representatives. Any Working Group established by a Committee shall meet at such
frequency as determined by the applicable Committee.  Each Party shall be
responsible for *** expenses of participating in a Working Group established by
a Committee.

(c)Non-Member Attendance.  Each Party may from time to time invite a reasonable
number of participants, in addition to its representatives, to attend Committee
meetings in a non‑voting capacity in the event that the planned agenda for such
Committee

 

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REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
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EXCHANGE ACT OF 1934, AS AMENDED.

 

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meeting would require such participants’ expertise; provided that if either
Party intends to have any Third Party (including any consultant) attend such a
meeting, such Party shall provide prior written notice to the other Party and
shall ensure that such Third Party is bound by confidentiality and non-use
obligations consistent with the terms of this Agreement.  

2.8Committee Decision-Making.

(a)Generally. Subject to Section 2.8(b) below, BMS will have sole
decision-making authority with respect to Development and Commercialization of
Licensed Antibodies and Licensed Products (including, for clarity, with respect
to the Parties’ activities in connection with the conduct of the Current
Combination Trial), provided that BMS may not exercise its final decision-making
authority with respect to any amendment to the Development Plan that would
reduce the number of cancer types in the Current Combination Trial to fewer than
*** tumor types; provided further, that (1) BMS may substitute a given tumor
type for another tumor type in the Current Combination Trial while maintaining a
total of *** tumor types, and (2) BMS would have sole discretion to reduce the
number of tumor types in the Current Combination Trial below *** if available
data with respect to the treatment of a given tumor type with a Licensed Product
does not justify further study of a Licensed Product for such tumor type(s).  

(b)Five Prime Unilateral Studies. Notwithstanding Section 2.8(a) above, all
decisions of a Committee related to conduct of Five Prime Unilateral Studies
shall be made by unanimous vote, with each Party’s representatives collectively
having one (1) vote.  If after reasonable discussion and good faith
consideration of each Party’s view on a particular matter before the applicable
Committee, the representatives of the Parties cannot reach an agreement as to
such matter within *** after such matter was brought to the applicable Committee
for resolution, such disagreement shall first be referred to the JSC (if in
existence at the time). If the JSC cannot reach an agreement as to such matter
within *** after such matter was brought to the JSC for resolution, or if the
JSC is not in existence, the disagreement will be referred to the Executive
Officers for resolution.  The Executive Officers shall use good faith efforts to
resolve such matter.  If the Executive Officers cannot resolve such matter
within *** days after such matter has been referred to them, then, Five Prime
shall have final decision-making authority with respect to the conduct of any
Five Prime Unilateral Study, subject to the terms and conditions of Section 4.3.

(c)Any decision made by BMS or Five Prime in the course of exercising its final
decision-making authority under this Section 2.8 must be consistent with the
terms of this Agreement and within the scope of authority delegated to the JDC
or JSC under this Agreement and shall be exercised in good faith. The Parties
expressly understand and agree that BMS’s or Five Prime’s final decision-making
authority to resolve a dispute not resolved by the Executive Officers will not
authorize BMS or Five Prime to unilaterally modify or amend, waive its own
compliance with, or determine BMS’s or Five Prime’s compliance with, the terms
of this Agreement. Disputes with respect to matters properly before the JDC or
JSC will not be subject to the dispute resolution procedures set forth in
Section 13.6, unless a Party alleges in good faith

 

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EXCHANGE ACT OF 1934, AS AMENDED.

 

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and has a bona fide belief that the decision was not made in good faith or is
otherwise not consistent with the terms and conditions of this Agreement.

2.9Discontinuation of Participation on a Committee.  Each Committee shall
continue to exist until the first to occur of: (a) the Parties mutually agreeing
to disband such Committee;  (b) Five Prime providing written notice to BMS of
its intention to disband and no longer participate in such Committee; (c) if
there is a Change of Control of Five Prime wherein Five Prime’s ability to
conduct Five Prime Independent Development Paths is terminated; or (d) with
respect to the JDC (and the JSC, if applicable) following the completion of all
Phase 1 Clinical Trials, Phase 2 Clinical Trials and Phase 3 Clinical Trials for
all Licensed Products if no new Clinical Trials are then contemplated.  Once a
Committee is disbanded, such Committee shall have no further obligations under
this Agreement and, thereafter, the Alliance Managers shall be the contact
persons for the exchange of information under this Agreement and decisions of
such Committee shall be decisions as between the Parties, subject to the other
terms and conditions of this Agreement.  

Article 3

LICENSES; EXCLUSIVITY

3.1Licenses to BMS.  

(a)Five Prime Licensed Technology. Subject to the terms and conditions of this
Agreement, Five Prime hereby grants to BMS:

(i)an exclusive (even as to Five Prime, except as provided in Section 3.3)
royalty-bearing license, with the right to grant sublicenses, but only as
provided in Section 3.2, under the Five Prime Licensed Technology, to test,
Develop, make, have made, use, sell, offer for sale, export, import, and
otherwise Commercialize Licensed Products in the Field in the Territory and not
for any other purpose and

(ii)an exclusive (even as to Five Prime, except as provided in Section 3.3)
royalty-bearing license, with the right to grant sublicenses, but only as
provided in Section 3.2, under the Five Prime Licensed Technology, to test,
make, have made, use, export and import Licensed Antibodies in the Field and the
Territory for the purpose of exercising BMS’s rights with respect to Licensed
Products under Section 3.1(a)(i).

(b)Five Prime Pipeline Technology. Subject to the terms and conditions of this
Agreement, Five Prime hereby grants to BMS a non-exclusive, royalty-free
license, under the Five Prime Pipeline Technology, to conduct Development of a
Five Prime Pipeline Asset which is the subject of a Five Prime Unilateral Study
as to which BMS has exercised its right to opt-in to Develop pursuant to Section
4.4(a) or Section 4.4(b), solely pursuant to the Development Plan, solely in
combination with the Licensed Antibody or Licensed Product that was included in
such Five Prime Unilateral Study and solely with respect to the Indication that

 

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REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
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was the focus of such Five Prime Unilateral Study and not for any other purpose,
with the limited right to sublicense such Development to its Affiliates and to
contract research organizations and other services providers and contractors
subject to Five Prime’s consent, which consent would not be unreasonably
withheld, conditioned or delayed, and not for any other purpose.  BMS shall
remain directly responsible for all such Development that has been sublicensed
to Affiliates or Third Parties, and shall ensure that such Affiliates and Third
Parties comply with the terms and conditions of this Agreement.  For clarity,
the foregoing license does not include any rights to research, make, have made,
use (for any purpose other than Development pursuant to the Development Plan),
seek Marketing Approval for, sell, offer for sale or otherwise Commercialize,
any Five Prime Pipeline Asset, and Five Prime expressly retains all rights with
respect to the foregoing.

(c)Unilateral Intellectual Property.  Subject to the terms and conditions of
this Agreement, Five Prime hereby grants to BMS:

(i)a co-exclusive license, under the Unilateral Intellectual Property that is
specifically related to the use of a Licensed Antibody or a Licensed Product as
a monotherapy or in combination with (x) one or more BMS Pipeline Asset(s)
and/or (y) other agents (other than Five Prime Pipeline Assets), to (1) Develop,
make, have made, use, sell, offer for sale, export, import and otherwise
Commercialize such Licensed Products that contain such Licensed Antibody, in
each case in the Field in the Territory during the Term in accordance with the
terms and conditions of this Agreement and (2) test, make, have made, use,
export and import Licensed Antibodies in the Field and the Territory during the
Term in accordance with the terms and conditions of this Agreement for the
purpose of exercising BMS’s rights with respect to Licensed Products under
Section 3.1(c)(i)(1);

(ii)an exclusive, royalty-free, fully paid license, under the Unilateral
Intellectual Property that is specifically related to the use of a BMS Pipeline
Asset (x) as a monotherapy or (y) in combination with one or more other BMS
Pipeline Assets, to Develop, make, have made, use, sell, offer for sale, export,
import and otherwise Commercialize such BMS Pipeline Asset(s) in the Field in
the Territory; and

(iii)a co-exclusive license, under the Unilateral Intellectual Property that is
specifically related to the use of a BMS Pipeline Asset in combination with a
Licensed Antibody or a Licensed Product, to Develop, make, have made, use, sell,
offer for sale, export, import and otherwise Commercialize such BMS Pipeline
Asset in combination with such Licensed Antibody or Licensed Product in the
Field in the Territory during the Term in accordance with the terms and
conditions of this Agreement.

For clarity, upon the reimbursement by BMS of Five Prime’s Development Expenses
with respect to a Five Prime Independent Development Path pursuant to Section
4.4 below, any Unilateral Intellectual Property arising out of such Five Prime
Independent Development Path that would otherwise have been Five Prime Licensed
Technology but for the fact that it was

 

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REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
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Unilateral Intellectual Property shall, as of the date of such reimbursement,
become Five Prime Licensed Technology, and the licenses in Section 3.1(a) above
(and not this Section 3.1(c)) shall apply with respect to Five Prime Licensed
Technology.

(d)Except as expressly provided in Section 3.1(b), the licenses granted by Five
Prime to BMS under this Agreement do not include any rights for BMS to develop,
make, have made, sell, offer for sale or otherwise commercialize any Proprietary
compound or other Active Ingredient of Five Prime that is not a Licensed
Antibody, whether alone or in any Combination Product or combination therapy
with a Licensed Antibody.

3.2BMS Sublicense Rights.  BMS may exercise its rights and perform its
obligations under this Agreement by itself or through the engagement of any of
its Affiliates.  Subject to the terms and conditions of this Agreement, BMS
shall have the right to sublicense, pursuant to a sublicense agreement that
satisfies the criteria set forth in this Section 3.2, any or all of the rights
granted to it by Five Prime under Section 3.1(a) to its Affiliates and/or to
Third Parties; provided, however, that BMS shall obtain the consent of Five
Prime, which shall not be unreasonably withheld, conditioned or delayed, prior
to granting any sublicense under Section 3.1(a) to a Third Party with respect to
any Major Market, other than a sublicense to a Third Party wherein BMS continues
to bear after the grant of such sublicense, without any right to receive
reimbursement from such sublicensee, at least *** of the costs of Developing and
Commercializing the applicable Licensed Product in such Major Market. Each
sublicense agreement (i) shall bind the sublicensee to obligations of
confidentiality and non-use consistent with this Agreement, (ii) shall require
the sublicensee to assign to BMS (or grant a fully paid-up, exclusive, fully
sublicensable, royalty-free, worldwide license to BMS under) all intellectual
property made by or on behalf of such sublicensee or its Affiliates, in the
course of practicing such sublicense, which intellectual property will be deemed
to be Collaboration Intellectual Property; provided, that in the case of a
contract manufacturer, BMS will use Commercially Reasonable Efforts to obtain
the contract manufacturer’s consent to grant the foregoing assignment or license
to intellectual property, and any intellectual property licensed or assigned by
the contract manufacturer will be deemed to be Collaboration Intellectual
Property, and (iii) shall include any and all provisions necessary to ensure
that Five Prime retains at least the same rights under this Agreement as it
would have had in absence of such sublicense, including as if BMS, rather than
such sublicensee, was the entity performing or having performed all activities
included in such sublicense. Within *** after entering into any sublicense
agreement with a Third Party, BMS shall provide Five Prime with a true and
complete copy of such agreement, provided that BMS shall be permitted to redact
all financial information from such agreement.  BMS shall remain directly
responsible for all of its obligations under this Agreement that have been
sublicensed to any of its Affiliates or sublicensees, shall be directly
responsible for the performance of its sublicensees, and shall ensure that such
Affiliates, subcontractors and sublicensees comply with the terms and conditions
of the sublicense agreement and this Agreement.  Notwithstanding the foregoing,
Five Prime acknowledges that BMS may, to the extent required pursuant to the
Ono-BMS Agreements and effective immediately upon the Effective Date, grant a
sublicense to Ono under Section 3.1(a), in the Ono Territory, under the

 

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rights granted to it by Five Prime under such Section 3.1(a) of this Agreement
without obtaining Five Prime’s consent and without providing a copy of the
Ono-BMS Agreements to Five Prime.

3.3Licenses to Five Prime.

(a)Grant Back.  Subject to the terms and conditions of this Agreement, BMS
hereby grants back to Five Prime a non-exclusive, royalty-free, fully paid
license under the Five Prime Licensed Technology licensed to BMS pursuant to
Section 3.1(a) or 3.1(c)(ii) solely to (A) conduct the Five Prime Development
Activities, (B) prepare, file and prosecute any IND, BLA or other Regulatory
Materials for any Licensed Product as permitted under this Agreement (subject to
BMS’s option to file on Five Prime’s behalf pursuant to Section 4.7(a)(vi)) and
(C) Develop, make, have made and use a subcutaneous formulation of FPA008 in
accordance with Section 5.4, with the limited right to sublicense to contract
research organizations, contract manufacturing organizations and other Approved
Subcontractors, and not for any other purpose. For clarity, the foregoing
license does not include any rights for Five Prime to Commercialize Licensed
Antibodies or Licensed Products.  If Five Prime exercises its Co-Promote Option,
it shall have the right to Co-Promote Licensed Products as described in Section
6.5.  

(b)License under BMS Technology. Subject to the terms and conditions of this
Agreement, BMS hereby grants to Five Prime, during the Term, a limited,
non-exclusive, royalty-free, fully paid license under the BMS Technology solely
to (A) conduct the Five Prime Development Activities, and (B) Develop, make,
have made and use a subcutaneous formulation of FPA008 in accordance with
Section 5.4, with the limited right to sublicense to contract research
organizations, contract manufacturing organizations, and other Approved
Subcontractors.

3.4No Implied Licenses; Negative Covenant.  Except as expressly set forth
herein, neither Party shall acquire any license or other intellectual property
interest, by implication or otherwise, under or to any trademarks, patents or
patent applications, Know-How, or other intellectual properties owned or
controlled by the other Party or its Affiliates.  For clarity, an exclusive
license granted to a Party under any particular Patents or Know-How Controlled
by the other Party shall confer exclusivity to the Party obtaining such license
only to the extent the Party granting such license Controls the exclusive rights
to such Patents or Know-How.  Neither Party shall, nor shall it permit any of
its Affiliates or sublicensees to, practice any Patents or Know-How licensed to
it by the other Party outside the scope of the license granted to it under this
Agreement.

3.5Five Prime’s Exclusivity Obligations.  

(a)Subject to Sections 3.5(b), 3.5(c), 4.3(m) and 4.3(n), during the Restricted
Period, neither Five Prime nor any of its Affiliates shall, itself or with or
through a Third Party, Develop, manufacture or commercialize, including by
granting any rights to any Third Party to Develop, manufacture or commercialize,
a CSF1R Antibody, other than in connection with (A)

 

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REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
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EXCHANGE ACT OF 1934, AS AMENDED.

 

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the conduct of the Five Prime Development Activities in accordance with this
Agreement, (B) the Development or manufacture of a subcutaneous formulation of
FPA008 pursuant to Section 5.4, or (C) the Co-Promotion of Licensed Products as
set forth in Section 6.5; provided, however, that it shall not be a breach of
the foregoing obligation for Five Prime or any of its Affiliates to grant rights
to any Third Party to clinically develop, manufacture or commercialize a
molecule (including an Antibody, peptide or chemical compound) that is not a
CSF1R Antibody (a “Third Party Licensed Molecule”), wherein (i) no rights are
granted to such Third Party to clinically develop, manufacture or commercialize
any CSF1R Antibody and (ii) such Third Party is not expressly prohibited from
clinically developing or commercializing such Third Party Licensed Molecule as
part of a combination product or combination therapy that includes a CSF1R
Antibody.

(b)If during the Restricted Period, there is a Change of Control of Five Prime,
and if the Third Party (or any of its Affiliates) described in clause (b) of the
definition of “Change of Control” (the “Five Prime Acquiror”), as of the
effective date of, or at any time subsequent to, such Change of Control, is
engaged, directly or indirectly, in, the Development, manufacture, or
commercialization of any CSF1R Antagonist that is not a Licensed Antibody (any
such activities described in (i) or (ii), a “Five Prime Competing Program”),
then Five Prime or the Five Prime Acquiror or its Affiliate shall have the right
to commence or continue such Five Prime Competing Program and to further the
Development, manufacture and commercialization of the CSF1R Antagonist included
in or arising from such Five Prime Competing Program and if Five Prime or the
Five Prime Acquiror or its Affiliate chooses to exercise such right, then (A)
appropriate firewalls shall be put in place by Five Prime and the Five Prime
Acquiror (now a Five Prime Affiliate) to ensure that no Five Prime Licensed
Technology, BMS Technology or Collaboration Intellectual Property, in each case,
that is Confidential Information under this Agreement is disclosed to, shared
with, or used by the personnel working on such Five Prime Competing Program, and
(B) Five Prime shall not transfer personnel involved in any way in (i) the
conduct of Five Prime Development Activities, or (ii) the Development or
manufacture of a subcutaneous formulation of FPA008, to work on the Five Prime
Competing Program.

(c)If during the Restricted Period, Five Prime acquires rights from a Third
Party (whether through acquisition of a Third Party, an asset acquisition,
license or otherwise, but not through a Change of Control of Five Prime) to
Develop or commercialize one or more CSF1R Antibodies (such activities, an
“Acquired Five Prime Competing Program”), Five Prime shall not be in breach of
its obligations under Section 3.5(a) provided that Five Prime notifies BMS in
writing within *** after the effective date of such acquisition (i.e., after the
closing of such acquisition shall have occurred, including after any
pre-clearance or similar regulatory approval periods have expired) as to which
of the following elections Five Prime chooses to make with respect to such
Acquired Five Prime Competing Program (which such election it is required to
make): (i) terminate the Acquired Five Prime Competing Program, (ii) divest
itself of the Acquired Five Prime Competing Program or (iii) include the CSF1R
Antibodies in such Acquired Five Prime Competing Program as Licensed Antibodies
under this Agreement (on the

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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same terms and conditions as apply to the then-existing Licensed
Antibodies).  Five Prime shall use Commercially Reasonable Efforts to complete
any divestiture under this Section 3.5(c) within *** after the effective date of
such acquisition, and if such divestiture is not completed by *** after the
effective date of such acquisition, then Five Prime shall promptly terminate
such Acquired Five Prime Competing Program or include such CSF1R Antibodies as
Licensed Antibodies under this Agreement.

3.6BMS’s Exclusivity Obligations.

(a)Subject to Sections 3.6(b) and 3.6(c), during the Restricted Period, neither
BMS nor any of its Affiliates shall, itself or with or through a Third Party,
clinically develop, manufacture or commercialize, including by granting any
rights to any Third Party to clinically develop, manufacture or commercialize,
any CSF1R Antibodies, other than the Development or Commercialization of
Licensed Antibodies and Licensed Products as contemplated by this Agreement;
provided, however, that it shall not be a breach of the foregoing obligation for
BMS or any of its Affiliates to grant rights to any Third Party to clinically
develop, manufacture or commercialize a Third Party Licensed Molecule, wherein
(i) no rights are granted to such Third Party to clinically develop, manufacture
or commercialize any CSF1R Antibody and (ii) such Third Party is not expressly
prohibited from clinically developing or commercializing such Third Party
Licensed Molecule as part of a combination product or combination therapy that
includes a CSF1R Antibody.  

(b)If, during the Restricted Period, there is a Change of Control of BMS and the
Third Party described in clause (b) of the definition of “Change of Control”
(the “BMS Acquiror”), as of the effective date of such Change of Control, is
engaged, directly or indirectly, in any activities that, if carried out by such
BMS Acquiror would be a breach of the exclusivity obligations set forth in
Section 3.6(a) above (such activities, a “BMS Competing Program”), then, within
*** after the effective date of such Change of Control, BMS shall elect to do
one of the following (but not more than one) with respect to such BMS Competing
Program, and shall notify Five Prime in writing of such election in such time
period: (i) divest itself of such BMS Competing Program; (ii) terminate the BMS
Competing Program; or (iii) include the CSF1R Antibodies in such BMS Competing
Program as Licensed Antibodies under this Agreement (on the same terms and
conditions as apply to the then-existing Licensed Antibodies).

BMS shall use Commercially Reasonable Efforts to complete any divestiture it may
elect under clause (i) above within *** after the effective date of such
acquisition and if such divestiture is not completed by *** after the effective
date of such acquisition, then BMS shall promptly terminate such BMS Competing
Program or include such CSF1R Antibodies as Licensed Antibodies under this
Agreement pursuant to Section 3.6(b)(iii). Any divestiture by BMS under clause
(i) above shall not be deemed to convey a sublicense under any Five Prime
Licensed Technology licensed to BMS hereunder or a license to any Collaboration
Intellectual Property owned by BMS hereunder, unless BMS agrees in its
discretion to grant the applicable Third Party a sublicense or license, option
to obtain a sublicense or license, or covenants not to sue in

 

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REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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connection therewith, in which event such BMS Competing Program and any CSF1R
Antibody therein shall be subject to the terms and conditions of this Agreement,
including the same milestone payments and royalties that would be payable to
Five Prime as though such CSF1R Antibody were a Licensed Product hereunder.  

(c)If during the Restricted Period, there is a Change of Control of BMS, and if
the BMS Acquiror, as of the effective date of, or at any time subsequent to,
such Change of Control, is engaged, directly or indirectly, in, the Development,
manufacture, or commercialization of any CSF1R Antagonist that is neither a
CSF1R Antibody nor a Licensed Antibody (any such activities described in (i) or
(ii), a “BMS Competing Non-Antibody”), then BMS or the BMS Acquiror or its
Affiliate shall have the right to commence or continue such BMS Competing
Non-Antibody and to further the Development, manufacture and commercialization
of the CSF1R Antagonist included in or arising from such BMS Competing
Non-Antibody and if BMS or the BMS Acquiror or its Affiliate chooses to exercise
such right, then (A) appropriate firewalls shall be put in place by BMS and the
BMS Acquiror (now a BMS Affiliate) to ensure that no Five Prime Licensed
Technology, Five Prime Pipeline Technology, Five Prime Platform Technology,
Unilateral Intellectual Property, BMS Technology or Collaboration Intellectual
Property, in each case, that is Confidential Information under this Agreement is
disclosed to, shared with, or used by the personnel working on such BMS
Competing Non-Antibody, and (B) BMS shall not transfer personnel involved in any
way in the Development or Commercialization of a Licensed Product or a Licensed
Antibody to work on the BMS Competing Non-Antibody.

(d)If, during the Restricted Period, BMS acquires rights from a Third Party
(whether through acquisition of a Third Party, an asset acquisition, license or
otherwise, but not through a Change of Control of BMS) to clinically develop or
commercialize one or more CSF1R Antibodies (such activities, an “Acquired BMS
Competing Program”), BMS shall not be in breach of its obligations under Section
3.6(a) provided that BMS notifies Five Prime in writing within *** after the
effective date of such acquisition (i.e., after any pre-clearance) as to which
of the following elections BMS chooses to make (which such election it is
required to make) with respect to such Acquired BMS Competing Program (i)
terminate the Acquired BMS Competing Program; (ii) divest itself of the Acquired
BMS Competing Program; (iii) include the CSF1R Antibodies in such Acquired BMS
Competing Program as Licensed Antibodies under this Agreement (on the same terms
and conditions as apply to the then-existing Licensed Antibodies); or (iv)
terminate this Agreement, which shall be treated as an at-will termination under
Section 10.2(a)(i).

BMS shall use Commercially Reasonable Efforts to complete any divestiture under
clause (ii) above within *** after the effective date of such acquisition and if
such divestiture is not completed by *** after the effective date of such
acquisition, then BMS shall promptly terminate such Acquired BMS Competing
Program or include the CSF1R Antibodies in such Acquired BMS Competing Program
as Licensed Antibodies under this Agreement (on the same terms and conditions as
apply to the then-existing Licensed Antibodies).  Any divestiture by BMS or its

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Affiliate under clause (ii) above shall not be deemed to convey a sublicense
under any Five Prime Licensed Technology licensed to BMS hereunder or a license
to any Collaboration Intellectual Property owned by BMS hereunder, unless BMS
agrees in its discretion to grant the applicable Third Party a sublicense or
license, option to obtain a sublicense or license, or covenants not to sue in
connection therewith, in which event such CSF1R Antibody shall be subject to the
terms and conditions of this Agreement, including the same milestone payments
and royalties that would be payable to Five Prime as though such CSF1R Antibody
were a Licensed Product hereunder.  For clarity, if BMS terminates this
Agreement pursuant to clause (iv) above, CSF1R Antibodies included in such
Acquired BMS Competing Program shall not be considered Licensed Antibodies or
Licensed Products.

3.7Subcontractors.  

(a)BMS shall have the right to engage subcontractors for purposes of conducting
activities assigned to it under this Agreement or for which it is responsible
under this Agreement. Except as permitted by the JDC or otherwise consented to
in advance by BMS, which consent shall not be unreasonably withheld, conditioned
or delayed and shall be deemed given if BMS does not respond within *** of any
request for such consent, Five Prime shall not utilize any service provider or
contractor for any of the work for which it is responsible in the conduct of the
Development Plan or related to the Current Combination Trial, or for the Five
Prime Development Activities, unless such service provider or contractor is
included in BMS’s list of pre-authorized sublicensees or subcontractors, which
list BMS shall provide to Five Prime (any such service provider or contractor,
an “Approved Subcontractor”).  

(b)Each Party shall cause any subcontractor engaged by such Party to be bound by
written obligations of confidentiality and non-use consistent with this
Agreement.  Each Party shall cause any subcontractor engaged by such Party to
assign to such Party (or grant a fully paid-up, exclusive, fully sublicensable,
royalty-free, worldwide license to such Party under) (or, in the case of
academic institutions and Third Party manufacturers, use reasonable efforts to
cause such subcontractor to so assign or grant) all intellectual property made
by such subcontractor in the course of performing such subcontracted work that
relates to any Licensed Antibodies or Licensed Products or their use,
manufacture or sale, which intellectual property will be deemed to be
Collaboration Intellectual Property.  Each Party shall remain directly
responsible for any obligations under this Agreement that have been delegated or
subcontracted to any subcontractor, and shall be directly responsible for the
performance of its subcontractors.

3.8Technology Transfer.  During the Term, upon request from BMS, Five Prime
shall provide or make available to BMS documents, information and other tangible
materials constituting the Five Prime Licensed Know-How then in existence that
are available to Five Prime and reasonably necessary or reasonably useful for
BMS to conduct the Development or Commercialization of any Licensed Antibody or
Licensed Product.  Five Prime shall provide reasonable consultation and
assistance for the purpose of transferring such Five Prime Licensed Know-How to
BMS to the extent reasonably necessary for BMS to Develop and Commercialize

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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a Licensed Antibody or Licensed Product in the Field that BMS is actively
Developing or Commercializing.  Except for Five Prime’s internal FTE costs in
providing technology transfer support pursuant to this Section 3.8, the costs
and expenses of any additional technology transfer support pursuant this Section
3.8 shall be borne entirely by BMS.

3.9Third Party Licenses.

(a)Terms of Third Party Licenses.  

(i)BMS acknowledges that the licenses granted to BMS in Section 3.1 include
sublicenses under Five Prime Licensed Technology licensed to Five Prime pursuant
to Third Party Licenses, and that such sublicenses are subject to the terms and
conditions of such Third Party Licenses.  BMS acknowledges that certain of the
licenses granted to Five Prime under Third Party Licenses are non-exclusive, and
that BMS’s licenses with respect to the relevant Licensed Technology are
exclusive only with respect to Five Prime, and not with respect to its licensor.

(ii)Without limiting Section 3.9(a)(i), no later than *** after the Effective
Date, Five Prime shall exercise its option for a Commercial License (as defined
in the ICOS Agreement) with respect to FPA008 under Sections 2.2 and 2.3 of the
ICOS Agreement. Upon the effectiveness of such option exercise, (1) the ICOS
Agreement shall cease to be an Excluded Third Party License and (2) the licenses
granted to BMS pursuant to Section 3.1(a) shall include a sublicense of such
Commercial License with respect to FPA008 (such sublicense, the “ICOS
Sublicense”). BMS acknowledges and agrees that the ICOS Sublicense, if and when
granted, shall be subject to the following: (A) the ICOS Sublicense is granted
only with respect to the Commercial License for FPA008 granted to Five Prime in
the ICOS Agreement and no other Licensee Product (as defined in the ICOS
Agreement), (B) the ICOS Sublicense is subject to all terms and conditions of
the ICOS Agreement and BMS shall practice the ICOS Sublicense in a manner
consistent with all terms and conditions of the ICOS Agreement (including
Section 5.1 (maintenance of records) and 5.2 (permitting Five Prime to conduct
audits and make records available to ICOS)), (C) the ICOS Sublicense shall
terminate immediately and automatically if the corresponding Commercial License
with respect to FPA008 in the ICOS Agreement terminates or expires or if this
Agreement terminates or expires, (D) Five Prime hereby acknowledges that it
remains expressly liable to ICOS pursuant to the ICOS Agreement for all actions
and/or omissions of BMS as Sublicensee (as defined in the ICOS Agreement) under
the  Commercial License for FPA008 and (E) Five Prime must provide ICOS the name
of BMS as Sublicensee, the date the ICOS Sublicense was granted and the Licensee
Product to which the ICOS Sublicense pertains, and BMS acknowledges and agrees
that doing so will not be in breach of any provision of this Agreement,
including Article 9 (Confidentiality).

(iii)Without limiting Section 3.9(a)(i), following the Effective Date, Five
Prime shall undertake Commercially Reasonable Efforts to obtain the consent of
Lonza to grant a sublicense to BMS under the license granted to Five Prime in
Section 4.1 of the Lonza

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Agreement, which sublicense would permit BMS to perform its obligations and
exercise its rights with respect to manufacturing FPA008 under this Agreement;
provided, that (1) Five Prime shall have no obligation to undertake to obtain
any such consent for more than *** after the Effective Date and (2) Five Prime
shall have no obligation to pay any consideration for or agree to any additional
obligations or relinquish any rights as a condition to obtaining any such
consent.  Upon receipt of such consent, (A) the Lonza Agreement shall cease to
be an Excluded Third Party License and shall be an Existing Third Party License
and (B) the licenses granted to BMS pursuant to Section 3.1(a) shall include a
sublicense of such license granted to Five Prime in Section 4.1 of the Lonza
Agreement (the “Lonza Sublicense”). BMS acknowledges and agrees that (x) the
Lonza Sublicense shall be only with respect to FPA008, (y) the Lonza Sublicense
shall be subject to all terms and conditions of the Lonza Agreement and shall be
practiced by BMS in a manner consistent with all terms and conditions of the
Lonza Agreement (including Sections 4.3.1-4.3.4, 6.1, 8 and 10.5 of the Lonza
Agreement), and (z) the Lonza Sublicense shall terminate immediately and
automatically if the corresponding license to Five Prime in the Lonza Agreement
terminates or expires or if this Agreement terminates or expires.

(b)Notification.  If either Party becomes aware of any Third Party Patents or
Know-How that are (i) specific to CSF1R or CSF1R Antibodies and (ii) necessary
for the manufacture, use or sale of any Licensed Antibody or Licensed Product,
such Party shall promptly notify the other Party, and the Parties shall promptly
thereafter meet to discuss such Third Party Patents or Know-How and each Party’s
interest, if any, in obtaining a license thereto.

(c)New Third Party Licenses.  If Five Prime enters into any agreement with a
Third Party after the Effective Date and obtains a license from such Third Party
to any Know-How or Patents that are necessary or reasonably useful for the
testing, development, manufacture, distribution, use, importation, exportation
or sale of a Licensed Antibody or Licensed Product, then such license agreement
shall only be deemed a Third Party License, and such Know-How and Patents, to
the extent otherwise falling within the definition of Five Prime Licensed
Technology, will only be sublicensed to BMS if all of the following conditions
are satisfied: (i) Five Prime discloses the terms of the applicable license
agreement to BMS, to the extent applicable to the rights that would be
sublicensed to BMS, and (ii) BMS provides Five Prime with written notice in
which (1) BMS consents to adding such Patents and Know-How to the definition of
Five Prime Licensed Technology and such license agreement to the definition of
Third Party License; (2) BMS agrees to make all payments when due and provide
all reports required under such license agreement for all amounts that would be
owed under such license agreement as a result of Five Prime’s granting a
sublicense to BMS or BMS’s practice thereunder, including BMS’s and its
Affiliates’ and sublicensees’ development, manufacture and commercialization of
Licensed Products; and (3) BMS acknowledges in writing that its sublicense under
such license agreement is subject to the terms and conditions of such license
agreement.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Article 4

DEVELOPMENT AND REGULATORY MATTERS

4.1General; Diligence.

(a)Except for Five Prime’s responsibilities in the conduct of the Current
Combination Trial, and Five Prime’s right to conduct other Development and
regulatory activities in connection with Five Prime Development Activities as
described below, and any other rights and obligations as expressly set forth in
this Agreement, BMS shall have the sole right and responsibility for the
Development of the Licensed Antibodies and Licensed Products under this
Agreement at its own cost and expense (including responsibility for all funding,
resourcing and decision-making), including whether to advance Licensed
Antibodies other than FPA008 into Development; provided, that BMS’s Development
of the Licensed Antibodies and Licensed Products under this Agreement is subject
at all times to Section 4.1(b) below and that BMS shall conduct such Development
pursuant to a Development Plan, as set forth in more detail below.  

(b)BMS, by itself or through its Affiliates and sublicensees, shall use
Commercially Reasonable Efforts to Develop and obtain Marketing Approval for
Licensed Products in the Field in the Territory, which shall include using
Commercially Reasonable Efforts to: (i) perform the activities set forth in the
Development Plan, (ii) Develop at least *** Licensed Antibody or Licensed
Product in the Field for the purpose of obtaining Marketing Approval in the
Major Markets and (iii) obtain Marketing Approval for at least *** Licensed
Product in the Field in each of the Major Markets.  For clarity, it is
understood and acknowledged that Commercially Reasonable Efforts in the
Development of Licensed Antibodies and/or Licensed Products may include
sequential implementation of Clinical Trials and/or intervals between Clinical
Trials for data interpretation and clinical program planning and approval and
regulatory interactions with the Regulatory Authorities.  

4.2Development Plan; Amendments to Development Plan.  

(a)The Development of Licensed Products by or on behalf of BMS and its
Affiliates and sublicensees under this Agreement shall be conducted pursuant to
a written development plan for each Licensed Product (each, a “Development
Plan”), which shall be substantially consistent with similar plans used by BMS
for internal purposes and which shall include at a minimum: study rationale,
patient population, timeline, primary endpoint, key secondary endpoint and
statistical justification.  The protocol summary for each Clinical Trial
conducted as part of the Development Plan will be provided to the JDC at the
next JDC meeting following the availability of such summary. The initial draft
Development Plan (including for the Current Combination Trial) as of the
Execution Date is attached to this Agreement as Exhibit E. Five Prime has
separately provided BMS with the protocol for and a summary of the status of
each Current Five Prime Non-I-O Study. Five Prime will provide BMS with any
updates or

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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changes to any such protocol as well as material updates to each Current Five
Prime Non-I-O Study as soon as practicable after they become available.  

(b)From time to time during the Term, BMS may make and implement amendments to
the then-current Development Plan, subject to this Section 4.2(b) and the other
terms and conditions of this Agreement.  To the extent such amendments are (x)
material, (y) relate to a Major Market, and (z) have not been previously
communicated to Five Prime at the JDC or a Working Group, in each case, in
writing (including emails or presentations), BMS shall (i) provide Five Prime
with a written description of such changes and a reasonable opportunity and time
period to review and comment on such material amendments prior to their
implementation, of not less than ***, and the opportunity to discuss such
material amendment to the Development Plan with BMS and (ii) submit such
amendment, following the Five Prime review, comment and discussion period, to
the applicable Working Group (or the JDC, if no applicable Working Group exists)
for review and approval.  Examples of material amendments to the Development
Plan include: eliminating, adding or switching Licensed Product(s) or Licensed
Antibody(ies); adding or terminating or substituting a tumor type; eliminating
or adding a planned Phase 2 Clinical Trial or Registration-Enabling Clinical
Trial, adding or removing a randomized or control arm from a planned or ongoing
Phase 2 Clinical Trial or Registration-Enabling Clinical Trial, terminating an
in-progress Phase 2 Clinical Trial or Registration-Enabling Clinical Trial;
eliminating, adding or materially changing the components of a Clinical Trial of
a Licensed Antibody or Licensed Product in combination with BMS Pipeline Assets,
or removing or adding any BMS Pipeline Assets to the Development Plan; changing
the enrollment or data readout for a Clinical Trial by an amount sufficient to
reasonably cause *** or more delay in the expected completion of such Clinical
Trial; or modifying plans for commercial manufacturing in a manner that would
reduce capacity or delay commercial availability. BMS shall consider all Five
Prime comments on the amendments to the Development Plan reasonably and in good
faith.  Once amendments to the Development Plan are fully reviewed and commented
upon by Five Prime and approved by the applicable Working Group (or the JDC, if
applicable) pursuant to this Section 4.2(b), if material, then such amended
Development Plan shall replace the prior Development Plan. If the activities
contemplated by the Development Plan contradict, or create inconsistencies or
ambiguities with, the terms of this Agreement, then the terms of this Agreement
shall govern.

4.3Five Prime Development Activities.  

(a)Current Five Prime Non-I-O Studies. Five Prime has the right, in its sole
discretion, to complete the Current Five Prime Non-I-O Studies in accordance
with the then-current protocol(s).  Five Prime shall notify BMS regarding any
material amendment to the protocol for, as well as any suspension or termination
of, any Current Five Prime Non-I-O Study. For clarity, as between the Parties,
Five Prime is responsible for all costs associated with the conduct of the
Current Five Prime Non-I-O Studies, excluding all costs and expense related to
drug supply of FPA008, which will be borne by BMS (and Five Prime shall not have
any obligation to pay any Service Fees pursuant to Section 5.3(d) with respect
thereto) except (i) to

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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the extent that increased drug supply of FPA008 is required as a result of a
modification by Five Prime to the protocol(s) in effect as of the Execution Date
with respect to the Current Five Prime Non-I-O Studies or (ii) for the
randomized portion of the current Phase 1 Clinical Trial of FPA008 in rheumatoid
arthritis.

(b)Current Combination Trial.  

(i)Five Prime will use Commercially Reasonable Efforts to complete the Current
Combination Trial in accordance with the Development Plan (and the timelines set
forth therein).  Five Prime shall meet the following milestones with respect to
the Current Combination Trial: (A) Five Prime will complete enrollment for Phase
1a on or before *** and (B) Five Prime will achieve sufficient enrollment in
Phase 1b to *** on or before ***; provided, that these dates shall be tolled for
amendments to the study protocol or any changes made by BMS.  In the event that
Five Prime does not meet the deadlines in Section 4.3(b)(i)(A) or 4.3(b)(i)(B),
after taking into account any tolling described above, BMS may upon notice to
Five Prime, assume operational control of the Current Combination Trial.  For
clarity, the provisions of this Section 4.3(b) do not prejudice BMS’s final
decision-making authority at the JDC as set forth in Section 2.8 above regarding
the Current Combination Trial; provided, that BMS may not exercise such final
decision-making authority to: (A) increase Five Prime’s obligations pursuant to
this Section 4.3(b), (B) assume operational control of the Current Combination
Trial other than as set forth in this Section 4.3(b), or (C) cause Five Prime to
perform activities that were previously out-sourced.

(ii)In the event BMS gives notice that it will assume operational control of the
Current Combination Trial as set forth in Section 4.3(b)(i), Five Prime will
promptly transfer/assign to BMS: (A) the applicable IND and regulatory filings
for the Current Combination Trial, to which BMS will grant Five Prime applicable
rights of use or reference, to enable Five Prime to exercise its rights and
perform its obligations under this Agreement, (B) the data from the Current
Combination Trial and (C) contracts for Third Party service providers that Five
Prime has been using for the Current Combination Trial. In addition, Five Prime
will conduct a technology transfer to BMS that consists of disclosing to BMS the
Five Prime Licensed Know-How that is necessary or reasonably useful for BMS to
continue the Current Combination Trial under the then-contemplated protocol, as
well as any drug supplies, data, analysis, reports, samples, regulatory filings
and any other relevant materials and information.  The costs and expenses of the
foregoing transfers shall be borne solely by BMS, other than Five Prime’s
internal FTE costs in making such transfers.

(iii)BMS shall bear all costs and expenses associated with the Current
Combination Trial, except that Five Prime is responsible for all internal FTE
costs of Five Prime associated with such study, when conducted by Five Prime;
provided, however, if BMS requests that Five Prime change the Current
Combination Trial in a manner that would materially increase the number of Five
Prime FTEs (such as increasing the number of patients, sites, or tumor types for
the Current Combination Trial) then BMS shall reimburse Five Prime for the Five
Prime

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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internal FTE costs associated with such change. For clarity, the cost of
manufacture and supply (including shipping, insurance, taxes and duty, if
applicable) of FPA008 and Nivolumab for the performance of the Current
Combination Trial shall be borne solely by BMS, and Five Prime will not be
required to pay any Service Fee with respect thereto; provided that costs for
replacing required quantitates of FPA008 or Nivolumab for the Current
Combination Trial due to wastage or loss of drug supply due to the negligence or
willful misconduct of Five Prime shall be borne by Five Prime and shall not
exceed the Service Fee for the equivalent quantity of FPA008 or Nivolumab, as
applicable, that Five Prime would have been obligated to pay had it obtained
such supply in accordance with Section 5.3(d). 

(iv)With respect to BMS’s payment obligations for the Current Combination Trial
(either before or after BMS assumes operational control), Five Prime shall
provide a report to BMS within *** after the end of each Calendar Quarter which
shall set forth in reasonable detail all costs and expenses actually incurred
during such Calendar Quarter by Five Prime (a “Quarterly Report”).  If requested
by BMS, Five Prime shall provide invoices or other appropriate supporting
documentation for any payments to a Third Party exceeding ***.  The Parties
shall seek to resolve any questions related to such Quarterly Reports within ***
following receipt by BMS of such Quarterly Report.  Based on these Quarterly
Reports, the Parties’ finance teams will determine the amount, if any, owed by
BMS for such Calendar Quarter and such payment will be made by BMS within ***
after such reconciliation period and otherwise in accordance with Section 7.4.

(c)Five Prime Independent Development Paths Generally.  Five Prime shall have
the right to conduct Non-Registrational Clinical Trials and Preclinical Studies
of a Licensed Antibody or Licensed Product then being Developed or
Commercialized by or on behalf of BMS or its Affiliates or sublicensees, as
follows, and in each case subject to the terms and conditions set forth in this
Section 4.3:

(i)in PVNS (x) as monotherapy or (y) in combination with one or more
therapeutics approved for the treatment or prevention of PVNS;

(ii)in any disease outside of Oncology (including RA, nonalcoholic
steatohepatitis (NASH), idiopathic pulmonary fibrosis (IPF), Crohn’s disease,
ulcerative colitis, multiple sclerosis, systemic lupus erythematosus, lupus
nephritis, psoriatic arthritis, psoriasis, coronary arterial disease, liver
fibrosis or renal fibrosis) (x) as monotherapy or (y) in combination with one or
more therapeutics approved for the relevant indication (any such disease, a
“Five Prime Non-Oncology Disease”);

(iii)in combination with Nivolumab in Oncology outside of the Ono Territory (a
“Nivolumab Combination”);

(iv)in combination with a Proprietary Immuno-Oncology molecule (including an
Antibody, peptide or chemical compound) of BMS (other than Nivolumab) that, as

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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of the time of the conduct of such trial, is in or has completed
Registration-Enabling Clinical Trials in Oncology and is not available on the
market for purchase (a “BMS Pipeline Combination”) outside of the Ono Territory;

(v)subject to Section 4.3(o) below, in combination with a Proprietary
Immuno-Oncology molecule (including an Antibody, peptide or chemical compound)
of BMS (other than Nivolumab) that is commercially available for purchase by
Third Parties and that is purchased by Five Prime on the open market (such
Immuno-Oncology molecule, a “Marketed BMS Molecule” and such combination, a
“Marketed BMS Combination”); or

(vi)in combination with a Five Prime Pipeline Asset, including in Oncology (a
“Five Prime Pipeline Combination”) (any of the foregoing (i) through (v) and any
Permitted Registrational Studies, a “Five Prime Independent Development Path”).

(d)Registration-Enabling Clinical Trials.

(i)Generally.  Five Prime shall have the right to conduct Registration-Enabling
Clinical Trials (1) for PVNS; and (2) in connection with a Five Prime Pipeline
Combination (“Permitted Registrational Studies”).  Except for Permitted
Registrational Studies, Five Prime may not initiate any Registration-Enabling
Clinical Trial, convert any Non-Registrational Clinical Trial into a
Registration-Enabling Clinical Trial, make any BLA filing based upon any
Registration-Enabling Clinical Trial, or initiate discussions with any
Regulatory Authority with the intent of discussing making a BLA filing based
upon any Registration-Enabling Clinical Trial, in each case without BMS’s prior
written consent, which consent will be at BMS’s sole discretion. For clarity, it
shall not be a breach of the foregoing sentence for Five Prime to respond to
questions and comments from a Regulatory Authority or to participate fully in
discussions with a Regulatory Authority that were initiated for reasons other
than discussing making a BLA filing based upon any Registration-Enabling
Clinical Trial.  Five Prime shall have the right to conduct Exceptional
Registrational Studies and to use the data arising from such Exceptional
Registrational Studies to support an application for Marketing Approval.  

(ii)Exceptional Studies.  Notwithstanding the prohibitions or limitations
regarding the conduct by Five Prime of Registrational Studies  set forth in
Sections 4.3(d)(i), 4.3(e)(ii), 4.3(e)(iii), 4.3(i)(v) and 4.3(i)(vi), it shall
not be considered a breach of this Agreement by Five Prime (and Five Prime may
continue to conduct such Clinical Trial) in the event that a Clinical Trial that
is initiated as a Non-Registrational Clinical Trial later meets the definition
of a Registration-Enabling Clinical Trial without intentional design or
modifications directed at converting such trial into a Registration-Enabling
Clinical Trial (e.g., through extraordinary results) and without Five Prime
initiating discussions with any Regulatory Authority with the intent of
encouraging such Regulatory Authority to provide guidance that such Clinical
Trial could or should be used to support an application for Marketing Approval;
provided, that Five Prime may respond to questions or comments from a Regulatory
Authority or participate fully in a discussion with a Regulatory Authority that
was initiated by Five Prime for

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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reasons other than encouraging such Regulatory Authority to provide guidance
that such Clinical Trial could or should be used to support an application for
Marketing Approval.

(e)Timing Limitations on Five Prime Independent Development Paths.  Five Prime
shall not :

(i)file an IND (or foreign equivalent) to conduct clinical Development of any
Licensed Product as monotherapy or in combination with another agent(s) prior to
***;

(ii)Initiate a Registration-Enabling Clinical Trial for any Five Prime
Independent Development Path in the field of Immuno-Oncology before ***; or

(iii)Initiate a Registration-Enabling Clinical Trial for any Five Prime
Independent Development Path, other than in Immuno-Oncology combinations (the
timing restriction for which is set forth in clause (ii) above) or in PVNS (in
which there is no timing restriction) before ***.

Notwithstanding the foregoing, if Five Prime’s filing of its first BLA with
respect to a Five Prime Independent Development Path would occur less than ***
prior to BMS’s expected filing of its first BLA for a Licensed Product, then
Five Prime will, at BMS’s request, defer the filing of such BLA until the
earlier of (1) the date BMS files a BLA for such Licensed Product or (2) ***
after Five Prime’s originally planned filing date.  During such deferral, BMS
may make such Licensed Product available on a compassionate use/expanded access
basis program, provided that any such efforts do not limit the duration of any
Regulatory Exclusivity available for such Licensed Product in the field of
Oncology.

(f)Notice to BMS of Five Prime Independent Development Path; Movement to
Development Plan; Substitution. At least *** prior to Five Prime’s planned
Initiation of the first Clinical Trial with respect to a particular Five Prime
Independent Development Path and at least *** prior to Five Prime’s planned
Initiation of any subsequent Clinical Trial with respect to such Five Prime
Independent Development Path, Five Prime would provide BMS written notice of
such planned Clinical Trial along with a detailed protocol summary for such
Clinical Trial (an “Independent Development Notice”). Five Prime would also
provide BMS with relevant scientific information and pre-clinical and other data
supporting such planned Clinical Trial.  BMS would have the right, exercisable
within *** after the date of an Independent Development Notice, with respect to
the first Clinical Trial with respect to such Five Prime Independent Development
Path, and within *** days after the date of an Independent Development Notice,
with respect to any subsequent Clinical Trial with respect to such Five Prime
Independent Development Path, to include such Clinical Trial in the Development
Plan, which it shall exercise by providing a written notice to Five Prime (a
“Program Addition Notice”); provided, that BMS has the bona fide intent to
Initiate a Clinical Trial within *** (subject to the completion of Five Prime’s
transfer to BMS of all relevant information and

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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materials necessary to commence such Development) that is substantially similar
in scope and purpose and, with respect to combinations, the same therapeutic
combination, as Five Prime had proposed for such Five Prime Independent
Development Path; provided, further, that in connection with a Five Prime
Pipeline Combination (other than a Five Prime Pipeline Combination that includes
a Five Prime Reserved Target), BMS may substitute an agent Proprietary to BMS
that modulates the same Target as the Five Prime Pipeline Asset proposed in such
Five Prime Pipeline Combination if: (i) the combination of such BMS agent and
the relevant Licensed Antibody or Licensed Product used in such Five Prime
Pipeline Combination (the “BMS Replacement Combination”) is at a substantially
equivalent or later stage of development to such Five Prime Pipeline Combination
and (ii) a sufficient number of patients have already been treated with the BMS
Replacement Combination in order to demonstrate an equivalent level of clinical
validation as such Five Prime Pipeline Combination. Five Prime would provide BMS
with written authorization to the FDA and other applicable Regulatory
Authorities of BMS’s right to cross-reference the appropriate INDs and other
Regulatory Materials of Five Prime for its Proprietary agents as may be required
for the continued Development of the applicable Five Prime Independent
Development Path.

(g)Five Prime Conduct of Five Prime Independent Development Paths. If with
respect to a planned Five Prime Independent Development Path (i) BMS notifies
Five Prime that it will not include such planned Clinical Trial in the
Development Plan; (ii) BMS does not include such planned Five Prime Independent
Development Path in the Development Plan within *** or ***, as applicable, after
receiving an Independent Development Notice with respect thereto; (iii) BMS
elects to pursue a BMS Replacement Combination; or (iv) BMS does not initiate a
Clinical Trial substantially similar in scope and purpose and, with respect to
combinations, the same therapeutic combination as Five Prime had proposed for
such Five Prime Independent Development Path (taking into account BMS’s right to
substitute a BMS Proprietary agent as described in Section 4.3(f) above) within
*** after adding it to the Development Plan (subject to the completion of Five
Prime’s transfer to BMS of all relevant information and materials necessary to
commence such Development), then thereafter Five Prime has the right to
unilaterally conduct such Five Prime Independent Development Path; provided that
any such Five Prime Independent Development Path is conducted consistent with
the protocol summary last proposed to BMS (with any material changes to be
submitted to BMS for consideration pursuant to the process described in this
Section 4.3(g)).  Five Prime will provide BMS with the draft protocol for each
Five Prime Independent Development Path for review and comment and Five Prime
would take BMS’s comments into consideration in good faith (with Five Prime
having final decision-making authority with respect to the conduct of such
development subject to the terms and conditions of this Section 4.3).
Notwithstanding the foregoing, the Parties, through the JDC, will seek to align
on overall development strategy of the applicable Licensed Product, taking into
consideration all relevant scientific, commercial and regulatory considerations
relevant to the overall Development by the Parties of all Licensed Antibodies
and Licensed Products.  If Five Prime continues with a Five Prime Independent
Development Path pursuant to Section 4.3(g)(iii) (i.e., on account of BMS’s
election to pursue a BMS Replacement Combination) (such Five Prime Independent
Development Path, an “Alternate Development

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Path”), then with respect to any such uses or activities by Five Prime, (1) BMS
will have no obligation to further Develop or Commercialize any resulting
Indications, (2) BMS shall continue to provide supply of the relevant Licensed
Antibody or Licensed Product to Five Prime as set forth in Section 5.3(b), (3)
Five Prime shall not be obligated to comply with Section 4.3(f) with respect to
any Clinical Trial for such Alternate Development Path, (4) if Five Prime in its
sole discretion complies with Section 4.3(f) with respect to any Clinical Trial
for such Alternate Development Path, and if BMS delivers a Program Addition
Notice with respect thereto, the Alternate Development Path shall be considered
a Five Prime Independent Development Path added to the Development Plan and
shall, in addition to other applicable provisions of this Agreement, be subject
to the payments under Section 4.4, and (5) except as set forth in clause (4)
above, such Alternate Development Path shall not be subject to the payments in
Section 4.4.

(h)Costs of Five Prime Independent Development Paths.  Five Prime would bear all
costs of Five Prime’s development of any Five Prime Independent Development
Path, subject to reimbursement by BMS as provided in Section 4.4 below.

(i)Other Terms and Conditions.  Five Prime’s development of Five Prime
Independent Development Paths would be subject to the following additional terms
and limitations:

(i)Five Prime may not conduct Clinical Trials for more than *** Five Prime
Non-Oncology Diseases (including RA and PVNS (which shall be deemed a Five Prime
Non-Oncology Disease for purposes of this section)), regardless of success, with
no limit on the number of indications or diseases in which Five Prime may
conduct Preclinical Studies, and no limit on the number of individual Clinical
Trials within each of the *** Five Prime Non-Oncology Diseases;

(ii)Unless the Parties agree otherwise in writing, the dosage and dosage regimen
of the Licensed Product to be used in a Five Prime Independent Development Path
shall be within (1) any approved dosage and regimen; (2) a protocol-determined
dosage and regimen for such Licensed Product in any Clinical Trial within the
then-current Development Plan or (3) a range of dosages and dosage regimens that
have been approved by BMS at the JDC or a Working Group;

(iii)With respect to Nivolumab Combinations, Five Prime would have the right to
conduct Clinical Development on no more than *** additional tumor types beyond
those included in the then-current Development Plan (i.e., to conduct studies
that are not duplicative of ongoing or planned BMS studies, regardless of
success, and with no limit on the number of individual Clinical Trials; provided
that any such Nivolumab Combinations must follow the experimental paradigm
(e.g., dose, dosing schedule and patient qualifications that are unrelated to
tumor type) of the then-current Development Plan that combined Nivolumab with
such Licensed Product that have been approved by BMS at the JDC or a Working
Group, and

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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any protocols with respect to such Nivolumab Combinations must be reviewed and
approved by the JDC;

(iv)With respect to BMS Pipeline Combinations, Five Prime would have the right
to conduct Clinical Development on *** BMS Pipeline Combinations, with up to ***
tumor types per combination, regardless of success, and with no limit on the
number of Clinical Trials); provided that such BMS Pipeline Combinations must
follow the experimental paradigm (e.g., dose, dosing schedule and patient
qualifications that are unrelated to tumor type) of the then-current Development
Plan or experimental paradigms from any prior study(ies) that combined the
applicable BMS Pipeline Asset with such Licensed Product that have been approved
by BMS at the JDC or a Working Group, and any protocols with respect to such BMS
Pipeline Combinations must be reviewed and approved by the JDC;

(v)Subject to clause (vi) below, Five Prime would have the right to conduct
Registration-Enabling Clinical Trials in Five Prime Pipeline Combinations in up
to *** tumor types with respect to each Five Prime Pipeline Combination; with
additional tumor types (i.e., in excess of five) requiring the consent of BMS,
which consent would be at BMS’s sole discretion;

(vi)Notwithstanding clause (v) above, Five Prime would be required to obtain
BMS’s consent, which consent would be at BMS’s sole discretion, in order to
conduct any Registration-Enabling Clinical Trial of a Five Prime Pipeline
Combination if the Five Prime Pipeline Asset included in the Five Prime Pipeline
Combination modulates a BMS Reserved Pipeline Target;

(vii)Five Prime’s ability to conduct Clinical Development on Five Prime Pipeline
Combinations shall be limited to those territories where Five Prime retains the
relevant development rights for the Five Prime Pipeline Asset; provided that
Five Prime may conduct global studies (i.e., including patients outside
territories where Five Prime has rights) where Five Prime retains rights in at
least *** of the following territories: ***; and provided, in each case, that
Five Prime will conduct such Clinical Development without a co-development
partner but shall have the right to use service providers such as CROs and any
fill and finish (with respect to supplies for subcutaneous formulation),
packaging, labeling, printing, shipping, or depot or storage vendors as provided
in Section 3.7.

(viii)Any Five Prime Independent Development Path shall be approved by all
applicable IRBs, and shall otherwise be conducted in compliance with Applicable
Laws;

(ix)BMS has the right to direct Five Prime to refrain from commencing or to
discontinue any proposed Five Prime Independent Development Path activities due
to BMS’s good faith determination of the existence of Safety Reasons with
respect to such activities, and in such event Five Prime shall refrain from
commencing or shall promptly

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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discontinue (in each case, consistent with Applicable Laws and industry best
practices for the conduct of such activities) such Five Prime Independent
Development Path activities;

(x)Five Prime will provide BMS with updates on all the Clinical Development of
any Five Prime Independent Development Path at each regularly scheduled JDC
meeting, and will propose all Preclinical Studies for discussion, and keep BMS
reasonably updated on any such Preclinical Studies, at meetings of the relevant
Working Group. Five Prime will provide BMS with relevant information and results
from each Five Prime Independent Development Path periodically during the course
of such Clinical Trial (but in any event not less frequently than monthly) and
would provide BMS with top-line and other aggregated end-of-study data reports
with respect to such Five Prime Independent Development Paths promptly after
such reports are available to Five Prime;  

(xi)Five Prime will obtain approval of the JDC for any material changes to the
protocol of Clinical Trials for any Five Prime Independent Development Path;

(xii)BMS would provide Five Prime with written authorization to the FDA and
other applicable Regulatory Authorities of Five Prime’s right to cross-reference
the appropriate INDs and other Regulatory Materials of BMS for its Proprietary
agents as may be required for the conduct of the Five Prime Independent
Development Path.  If BMS reimburses Five Prime pursuant to Section 4.4 for its
Development Expenses relating to all Five Prime Unilateral Studies conducted
during the Term leading to such data (such reimbursement, the “Data
Reimbursement”), then BMS shall be entitled to use the data from the Five Prime
Independent Development Path to (1) submit regulatory filings and seek approvals
for its own agent, either alone or as part of a combination use therapy with the
Licensed Product; and (2) following the applicable approval, to promote
indications based on, and to disseminate, such data for the benefit of its own
agent, either alone or as part of the combination therapy with the applicable
Licensed Product; and

(xiii)Exhibit I sets forth a list of possible countries in which Future Five
Prime Studies may be conducted, provided that BMS shall not be obligated to
supply Licensed Product (or any BMS Proprietary agent) for use in a country
listed on Exhibit I if such product has not previously been made available for
clinical or commercial use in such country;

(j)Operational Authority of Five Prime Generally.  Solely with respect to Five
Prime Development Activities, Five Prime shall, subject to the oversight and
determinations of the JDC as provided in Section 2.2, and the applicable terms
and conditions of this Section 4.3: (i) manage and be primarily responsible for
the conduct of the Five Prime Development Activities; (ii) be the sponsor and
regulatory lead with respect to the each Five Prime Development Activity; and
(iii) as between the Parties, be the lead with respect to (1) the selection and
management of clinical study sites (including budget negotiations with vendors,
timelines and contingency planning), (2) conducting clinical study start-up
activities, communicating with and obtaining approval from institutional review
boards and/or ethics

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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committees, as applicable, and drafting for both Parties’ approval the template
informed consent form (“ICF”) for each Five Prime Development Activity, (3)
subject recruitment and retention activities, (4) ongoing site monitoring and
quality assurance audits, (5) subject to the terms of the Pharmacovigilance
Agreement, management of safety reporting by contract research organizations and
clinical study sites, (6) ongoing medical monitoring, (7) management, monitoring
and audits of CROs in connection with each CRO involved in the conduct of each
Five Prime Development Activity, and (8) inquiries from clinical study subjects
((1)-(8), collectively, the “Operational Matters”). Five Prime shall use
Commercially Reasonable Efforts to perform such Operational Matters.  The JDC
shall set up a mechanism for BMS or a Working Group of the JDC to be informed
and updated on a timely periodic basis regarding Operational Matters, so that if
BMS has any concerns or disagreements regarding same, the matter can be
escalated to the JDC for review.

(k)Responsibilities of Five Prime Relating to Current Combination
Trial.  Subject to JDC direction and oversight as provided in Section 2.2, Five
Prime shall be responsible for the activities set forth on Schedule 4.3(k), with
respect to the conduct of the Current Combination Trial.

(l)Regulatory Matters Relating to Five Prime Development Activities.  Five Prime
shall, with respect to each of the Five Prime Development Activities:

(i)provide BMS with reasonable advance notice of scheduled meetings or other
material non-written communications with a Regulatory Authority and the
opportunity to participate in each such meeting or other non-written
communication, to the extent that it relates to the Licensed Product or a BMS
Pipeline Asset, and providing BMS with the opportunity to review, provide
comments to Five Prime within *** on, and, if inconsistent with the Development
Plan or JDC guidance, approve all submissions and written correspondence with a
Regulatory Authority that relates to a Licensed Product or BMS Pipeline Asset;
provided, however, in no event shall Five Prime or any Affiliate or sublicensee
of Five Prime transfer material written communications to or initiate other
communications with any Regulatory Authority solely with respect to a Licensed
Product or BMS Pipeline Asset without the prior written consent of BMS; and
provided further that BMS shall (unless otherwise permitted by Five Prime) step
out of any portions of such meetings or other non-written communications with a
Regulatory Authority that relate solely to a Five Prime Pipeline Asset and Five
Prime shall (unless otherwise permitted by BMS) step out of any portions of such
meetings or other non-written communications with a Regulatory Authority that
relate solely to a BMS Pipeline Asset;

(ii)provide to BMS (1) a written summary of meetings or other non-written
official communications with a Regulatory Authority, in each case with respect
to which representatives of BMS did not attend or did not participate, within
*** of such meeting or communication (with draft formal minutes to follow within
***, (2) copies of any substantial correspondence to or from a Regulatory
Authority within *** of receipt or provision, in each

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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case to the extent that it relates to a Licensed Product or a BMS Pipeline Asset
(or to the extent the communication would adversely impact the performance of
the Development Plan), and (3) copies of all Regulatory Materials that relate to
a Licensed Product or BMS Pipeline Asset within *** of submission to Regulatory
Authorities; and

(iii)provide to BMS, including through the relevant Working Group, at least ***
in advance of submission, drafts of (1) the IND with respect to such Five Prime
Development Activity (if applicable); and (2) any Regulatory Materials, or
portions thereof, that relate to a Licensed Product or a BMS Pipeline Asset, for
review, and providing BMS, including through the relevant Working Group, at
least *** in advance of submission drafts of all other formal written
correspondence to a Regulatory Authority relating to the Five Prime Development
Activity, to the extent such correspondence relates to a Licensed Product or a
BMS Pipeline Asset.

(m)Impact of a Change of Control on Five Prime Development Activities. In the
event of a Change of Control of Five Prime, (a) Five Prime would establish
appropriate firewalls and similar procedures to prevent disclosure of any
Confidential Information of BMS to the applicable Third Party except on a
need-to-know basis to personnel to the extent necessary for Five Prime to
perform activities related to the research or clinical development of any Five
Prime Independent Development Path or otherwise perform its obligations or
exercise its rights under this Agreement, (b) the definition of “Five Prime
Pipeline Assets” would be deemed to include only those internal or in-licensed
or acquired pipeline assets of Five Prime with respect to which Five Prime had
rights to develop and commercialize such asset immediately prior to such Change
of Control; and (c) the right of Five Prime to pursue any additional research or
clinical development of any Nivolumab Combination or any BMS Pipeline
Combination under this Agreement would terminate upon such Change of Control of
Five Prime.  If the applicable Third Party is then commercializing a CSF1R
Antagonist in the field of Oncology or is then dosing patients in a Clinical
Trial testing a CSF1R Antagonist that is Proprietary to such Third Party in the
field of Oncology, the right of Five Prime to pursue any additional Five Prime
Independent Development Path activities, and the right of Five Prime to
manufacture Licensed Antibodies or Licensed Products under this Agreement, would
terminate upon such Change of Control of Five Prime.  In the event of a Change
of Control of Five Prime, the Parties will cooperate to ensure an orderly wind
down of any ongoing research or Clinical Trials with respect to any Nivolumab
Combination or any BMS Pipeline Combination (or any Five Prime Independent
Development Path, if applicable pursuant to the immediately preceding sentence)
and transfer to BMS of all relevant information, data, results, samples,
clinical supplies and filings with respect to such research or Development at
BMS’s expense.  BMS may only use such information, data, results, samples,
clinical supplies and filings if it pays the Data Reimbursement.

(n)Purchases of Commercially Available Licensed Product. If a Licensed Product
is commercially available for purchase by Third Parties, Five Prime shall be
free to purchase such commercially available Licensed Product on the open market
for any use,

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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including research or development uses and Registration-Enabling Clinical
Trials, without restrictions under this Agreement that would not be applicable
to Third Parties purchasing such commercially available Licensed Product (for
example, Sections 3.5, 4.1(a), 4.3 and Article 2 shall not apply to such uses);
provided, that Five Prime shall comply with Sections 9.1, 9.2 and 9.3. For
clarity, with respect to any such uses or activities by Five Prime,  BMS will
have no obligation to provide drug supplies, further Develop or Commercialize
any resulting indications, make any payments with respect to such uses pursuant
to Article 7 hereof, or provide any right of reference to BMS regulatory filings
in furtherance of such uses or activities.

(o)Marketed BMS Combinations. In the event that Five Prime pursues a Marketed
BMS Combination, unless BMS elects in its sole discretion to include any such
Development Activities in the Development Plan or to otherwise reimburse Five
Prime for Development Expenses pursuant to Section 4.4, BMS will have no
obligation to provide drug supplies for the Marketed BMS Molecule, further
Develop or Commercialize any resulting indications, or make any payments with
respect to such uses pursuant to Article 7 hereof.

4.4Inclusion of a Five Prime Independent Development Path in the Development
Plan.

(a)Reimbursement of Five Prime Development Expenses Where Included in
Development Plan; Payment of Deferred Milestone Payments. Within *** after BMS’s
addition of a Five Prime Independent Development Path to the Development Plan
(subject to the completion of Five Prime’s transfer to BMS of all relevant
information and materials necessary to commence such Development), BMS will pay
Five Prime an amount equal to *** of Five Prime’s Development Expenses with
respect to such Five Prime Independent Development Path (and that do not relate
specifically to other Indications or Five Prime Development Paths) added to the
Development Plan, without duplication of any Development Expenses that may have
been previously paid by BMS. Milestone payments shall be paid as follows: (A)
for each milestone event (other than for a PVNS Milestone) set forth in Section
7.2 that was achieved in the Five Prime Independent Development Path prior to
the date BMS provided a Program Addition Notice with respect to such Five Prime
Independent Development Path, BMS will pay Five Prime each such corresponding
milestone payment set forth in Section 7.2 within *** following the date of the
first to occur of (1) First Marketing Approval in the EU, (2) First Marketing
Approval in Japan or (3) first BLA Approval in the US, in each case, with
respect to a Licensed Product arising from such Five Prime Independent
Development Path (the first of (1), (2) or (3), the “First Product Approval”)
and (B) for each milestone event set forth in Section 7.2 that was achieved in
the Five Prime Independent Development Path on or after the date BMS provided a
Program Addition Notice with respect to such Five Prime Independent Development
Path, BMS will pay Five Prime each corresponding milestone payment set forth in
Section 7.2 in accordance with the terms of Section 7.2 within *** following
achievement of the applicable milestone event.  For clarity, for milestone
events for PVNS Milestones that are achieved in the Five Prime Independent
Development Path prior to the date BMS provided a Program Addition Notice with
respect to such Five Prime Independent

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Development Path, BMS shall pay the corresponding milestone payment set forth in
Section 7.2 in accordance with the terms of Section 7.2 within *** following
achievement of the applicable milestone event.

(b)Reimbursement of Five Prime Development Expenses Where Not Included in
Development Plan; Payment of Deferred Milestone Payments. Notwithstanding
Section 4.4(a) above, if BMS does not add a Five Prime Independent Development
Path to the Development Plan before the review of any efficacy data from the
first Phase 3 or Registration-Enabling Clinical Trial, and such Five Prime
Independent Development Path achieves the First Product Approval, then within
*** after such First Product Approval, BMS will pay Five Prime an amount equal
to the sum of (1) one hundred twenty-five percent (125%) of Five Prime’s
Development Expenses other than the amounts paid by Five Prime for the purchase
of Marketed BMS Molecules on the open market, and (2) *** of the amounts paid by
Five Prime for the purchase of Marketed BMS Molecules on the open market, in
each case ((1) and (2)) with respect to such Five Prime Independent Development
Path (and that do not relate specifically to other Indications or Five Prime
Development Paths), without duplication of any Development Expenses that have
been previously paid by BMS. Milestone payments shall be paid as follows: (A)
for each milestone event (other than for a PVNS Milestone) set forth in Section
7.2 that was achieved in the Five Prime Independent Development Path prior to
the date of the First Product Approval with respect to such Five Prime
Independent Development Path, BMS will pay Five Prime each corresponding
milestone payment set forth in Section 7.2 within *** following the date of such
First Product Approval and (B) for each milestone event set forth in Section 7.2
that was achieved in the Five Prime Independent Development Path on or after the
date of the First Product Approval with respect to such Five Prime Independent
Development Path, BMS will pay Five Prime each corresponding milestone payment
set forth in Section 7.2 in accordance with the terms of Section 7.2 within ***
following achievement of the applicable milestone event. For clarity, for
milestone events for PVNS Milestones that are achieved in the Five Prime
Independent Development Path prior to the date of the First Product Approval
with respect to such Five Prime Independent Development Path, BMS shall pay the
corresponding milestone payment set forth in Section 7.2 in accordance with the
terms of Section 7.2 within *** following achievement of the applicable
milestone event.

(c)Restriction on Development or Use of Data in Regulatory Filing by BMS Prior
to Reimbursement of Development Expenses.  BMS shall neither (A) initiate any
Clinical Development of a Licensed Product with respect to a given Indication
(or a combination of a Licensed Product together with a Five Prime Pipeline
Asset, BMS Pipeline Asset or Marketed BMS Product) that is or has been the
subject of an Independent Development Notice or that is an Alternate Development
Path, nor (B) make any filing with any Regulatory Authority utilizing Unilateral
Intellectual Property (e.g., data from a Five Prime Unilateral Study), without
reimbursing Five Prime for its Development Expenses with respect to such Five
Prime Independent Development Path pursuant to Section 4.4(a) or 4.4(b) above,
as applicable.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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4.5Development Records.  Each Party shall maintain reasonably complete, current
and accurate records of all Development activities conducted by it hereunder,
and all data and other information resulting from such activities consistent
with its usual practices.  Such records shall fully and properly reflect all
work done and results achieved in the performance of the Development activities
in good scientific manner appropriate for regulatory and patent purposes.  Each
Party shall document all non-clinical studies and Clinical Trials in formal
written study reports according to Applicable Laws and national and
international guidelines (e.g., ICH, GCP, GLP, and GMP).

4.6Development and Regulatory Reports.  BMS shall provide Five Prime with annual
written reports summarizing its, its Affiliates’ and sublicensees’ (including,
for clarity, Ono) Development of Licensed Products, including a summary of the
data, timeline and results of such Development, and associated regulatory
activities.  BMS will also establish a secure link to provide Five Prime
electronic access to such information.  Without limiting the foregoing, such
reports shall contain sufficient detail to enable Five Prime to assess BMS’s
compliance with its Development obligations hereunder.  Such reports shall be
Confidential Information of BMS pursuant to Article 9.  BMS shall respond to
Five Prime’s reasonable requests from time to time for additional information
regarding significant Development activities.  The Parties shall discuss the
status, progress and results of Development activities at JDC meetings.

4.7Regulatory Matters for Licensed Product; Data.

(a)Except (x) as set forth in Sections 4.7(b)-(g), Section 4.3(l) or Schedule
4.3(k), (y) as permitted for Preclinical Studies, or (z) for Five Prime
Unilateral Studies under this Agreement:

(i)Control of Certain Regulatory Matters. BMS shall have sole responsibility and
decision‑making authority with respect to regulatory matters for Licensed
Antibodies and/or Licensed Products that are then included in the Development
Plan or then being Commercialized by BMS under this Agreement (including the
content of any regulatory filing or dossier, pharmacovigilance reporting,
labeling and safety, and the decision to file or withdraw any BLA or to cease or
suspend any Clinical Trial in the Development Plan, subject to provisions in
this Agreement that require consent, notice, review, approval or consultation
regarding any of the foregoing).  BMS shall have sole responsibility for
preparing and submitting such Regulatory Materials for Licensed Products in the
Field in the Territory, for which it has such responsibility and decision-making
authority as set forth in the foregoing sentence, including preparing,
submitting and holding INDs and BLAs for such Licensed Products.  Five Prime
shall reasonably cooperate with BMS and provide to BMS all Five Prime Licensed
Know-How, as may be reasonably requested by BMS, in order to prepare or support
any Regulatory Materials for Licensed Products in the Field in the Territory and
interactions with any Regulatory Authority in connection with Development and/or
Marketing Approval of Licensed Products, in each case, in compliance with the
foregoing.  

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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(ii)Ownership of Certain Regulatory Materials. BMS will own all Regulatory
Materials and all regulatory applications and approvals with respect to Licensed
Products that are then included in the Development Plan or then being
Commercialized by BMS under this Agreement (regardless of which Party prepares
or files such applications or obtains such approvals), including all INDs and
BLAs and foreign equivalents thereof for Licensed Products, and such Regulatory
Materials shall be submitted in the name of BMS (or its Affiliate or
sublicensee, as applicable).

(iii)Data Ownership. BMS will own all clinical data generated in the Development
of Licensed Antibodies or Licensed Products pursuant to the Development Plan,
except to the extent related solely to any Five Prime Pipeline Asset (which will
be owned by Five Prime), to the extent related solely to a BMS Pipeline Asset
(which will be owned by BMS) or to the extent related to a combination therapy
of a Licensed Product and a Five Prime Pipeline Asset (which shall be owned
jointly by the Parties). Five Prime will own all clinical data generated by Five
Prime in the Five Prime Independent Development Paths, Alternate Development
Paths and Five Prime Unilateral Studies.

(iv)Provided Five Prime is not then conducting Development activities with
respect to an IND for a Licensed Product, or in active preparation to do so
within ***, upon written request by BMS, Five Prime shall transfer and assign
(or cause an Affiliate to transfer and assign) to BMS all of Five Prime’s (or
such Affiliate’s) right, title and interest to such IND.  

(v)If a Party is to assign an IND or other Regulatory Material to the other
Party under this Agreement, such Party (or its applicable Affiliate) shall
notify the applicable Regulatory Authorities in writing that it is transferring
such Regulatory Material to the other Party.  To the extent that any IND(s) or
other Regulatory Materials cannot actually be assigned to the other Party, the
Party hereby grants to the other Party the right to reference and use such
Regulatory Materials (including Drug Master Files, also known as “DMFs”) under
such IND(s) and other Regulatory Materials in compliance with the terms of this
Agreement.

(vi)For clarity, Five Prime has the right to file regulatory filings, including
BLAs, with respect to any Five Prime Unilateral Study; provided, that if Five
Prime intends to make a regulatory filing with respect to any Licensed Product
that is the subject of a Five Prime Independent Development Path, Five Prime
will notify BMS in writing and BMS has the option (but not the obligation) to
timely make such regulatory filing on Five Prime’s behalf; such option shall not
extend to regulatory filings for any Five Prime Pipeline Asset that is the
subject of a Five Prime Independent Development Path.  Representatives of Five
Prime shall be permitted to attend and participate in any meeting and material
communications regarding such regulatory filings.

(b)Current Combination Trial. Five Prime shall retain ownership and control of
the IND and other Regulatory Materials for the Current Combination Trial until
the earlier to occur of (i) completion of the Current Combination Trial or
(ii) BMS’s assumption of the

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Current Combination Trial pursuant to Section 4.3(b), at which point Five Prime
shall, upon BMS’s request, transfer the IND and other Regulatory Materials for
the Current Combination Trial to BMS at no cost to BMS.

(c)Five Prime Independent Development Path. Five Prime shall own and control the
IND(s) and other Regulatory Materials for each Five Prime Independent
Development Path (other than with respect to any Five Prime Pipeline
Combination, which is addressed in Section 4.7(d)) until such time as such
particular Five Prime Independent Development Path is added to the Development
Plan by BMS (and subject to payment of the relevant amounts in Section 4.4), at
which point Five Prime shall, upon BMS’s request, transfer the IND(s) and other
Regulatory Materials for the relevant Five Prime Independent Development Path to
BMS; provided, that if Five Prime is operationalizing at least one Clinical
Trial utilizing the IND(s) or other Regulatory Materials for such Five Prime
Independent Development Path at the time it is added to the Development Plan,
Five Prime shall grant BMS a right of reference to the IND(s) or other
Regulatory Materials for such Clinical Trial until such time as Five Prime is no
longer conducting any such Clinical Trials, and shall then transfer such IND(s)
or other Regulatory Materials to BMS as set forth in the foregoing clause.

(d)Five Prime Pipeline Assets; Five Prime Pipeline Combinations.  As between the
Parties, Five Prime shall own and control the IND and other Regulatory Materials
for Five Prime Pipeline Assets, including with respect to Five Prime Pipeline
Combinations, and Five Prime shall have sole responsibility for and
decision‑making authority with respect to regulatory matters solely relating to
Five Prime Pipeline Assets (including the content of any regulatory filing or
dossier, pharmacovigilance reporting, labeling, and safety); provided, that to
the extent such Regulatory Materials relate specifically to a Five Prime
Pipeline Combination of such Five Prime Pipeline Asset with FPA008, or any other
Licensed Antibody or Licensed Product then being developed or commercialized by
BMS, the Parties shall cooperate with respect to Regulatory Materials, and
(i) Five Prime shall own and control the IND, BLA and Marketing Approval for the
Five Prime Pipeline Asset, (ii) BMS shall own and control the IND, BLA and
Marketing Approval for the relevant Licensed Antibody or Licensed Product (other
than FPA008 monotherapy, which is addressed in Section 4.7(c)), and (iii) Five
Prime shall own and control the IND for the combination between the Five Prime
Pipeline Asset and the Licensed Antibody or Licensed Product; provided, further,
that if the relevant Five Prime Independent Development Path for such Five Prime
Pipeline Combination is added to the Development Plan by BMS (and subject to
payment of the relevant amounts in Section 4.4), Five Prime shall, upon BMS’s
request, transfer the IND(s) and other Regulatory Materials for the relevant
Five Prime Pipeline Combination to BMS; provided, further, that if Five Prime is
operationalizing at least one Clinical Trial utilizing the IND(s) or other
Regulatory Materials for such Five Prime Pipeline Combination at the time it is
added to the Development Plan, Five Prime shall grant BMS a right of reference
to the IND(s) or other Regulatory Materials for such Clinical Trial until such
time as Five Prime is no longer conducting any such Clinical Trials, and shall
then transfer such IND(s) or other Regulatory Materials to BMS as set forth in
the foregoing clause.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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(e)Other Technologies. For clarity, this Agreement shall not affect the
ownership and control of INDs and other Regulatory Materials of either Party
with respect to agents, products and other technologies that are outside the
scope of this Agreement.

(f)Right of Reference to Five Prime Regulatory Materials. Five Prime shall grant
to BMS a right of reference to the IND and other Regulatory Materials that are
owned and controlled by Five Prime: (i) for any Five Prime Independent
Development Path involving a BMS Pipeline Asset to the extent necessary for such
BMS Pipeline Asset then being developed or commercialized by BMS; and (ii) if
BMS pays the Data Reimbursement for the relevant Five Prime Independent
Development Path as set forth in Section 4.4, to the extent necessary for any
Licensed Antibody or Licensed Product then being developed or commercialized by
BMS.

(g)Right of Reference to BMS Regulatory Materials.  (i) In the event Five Prime
transfers an IND or other Regulatory Materials to BMS under this Agreement,
including pursuant to Sections 4.7(a)(ii) or (iv), 4.7(b), 4.7(c), or 4.7(d)
with respect to BMS owned and controlled Regulatory Materials in connection with
Licensed Products or BMS Pipeline Assets, in each case, (x) BMS shall grant Five
Prime a right of reference to such Regulatory Materials to perform Five Prime’s
obligations and exercise its rights under this Agreement and (y) Five Prime
shall have the right to cause BMS to file a BLA or Marketing Approval on its
behalf if BMS controls Regulatory Materials under this Agreement in a particular
jurisdiction in a Major Market and BMS’s involvement in such jurisdiction is
required to obtain such Regulatory Approval and such Regulatory Approval is
needed to perform Five Prime’s obligations or exercise its rights under this
Agreement.   

4.8Notice of Regulatory Action.  If any Regulatory Authority takes or gives
notice of its intent to take any regulatory action with respect to any activity
of Five Prime or BMS relating to Licensed Antibodies or Licensed Products, then
such Party shall promptly notify the other Party of such contact, inspection or
notice or action.  Each Party shall review and comment on any such responses to
Regulatory Authorities that pertain to the Licensed Antibodies and/or Licensed
Products; provided that BMS shall have the final decision making authority with
respect to such responses to the extent relating solely to the Licensed
Antibodies and/or Licensed Products.  In addition, each Party shall promptly
notify the other of any information it receives regarding any threatened or
pending action, inspection or communication by or from a Third Party that would
reasonably be expected to materially affect the Development of the Licensed
Antibodies or Licensed Products.

4.9Amendment of Pharmacovigilance Agreement. The Parties shall undertake, as
soon as practicable subsequent to the Effective Date, to amend that certain
Pharmacovigilance Agreement, dated as of June 17, 2015 (the “Pharmacovigilance
Agreement”) (or to enter into a new agreement taking the place of such
Pharmacovigilance Agreement), to transfer global pharmacovigilance
responsibilities for Licensed Products to BMS, taking into account the
responsibilities of Five Prime with respect to the Five Prime Development
Activities and Five Prime Pipeline Assets.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Article 5

MANUFACTURING

5.1Overview.  Without prejudice to Section 5.4, BMS will have the exclusive
global right and shall be solely responsible for the manufacture (including
having a Third Party manufacture on its behalf) of all Licensed Antibodies and
Licensed Products (including all such manufacturing for use in Clinical Trials,
GLP toxicology studies and for commercial sale), including all activities
related to developing the process, analytics and formulation for the manufacture
of clinical and commercial quantities of Licensed Antibodies and/or Licensed
Products, the production, manufacture, processing, filling, finishing,
packaging, labeling, inspection, receiving, holding, shipping and distribution
of Licensed Antibodies and/or Licensed Products, or any Licensed
Antibody-specific raw materials or Licensed Product-specific packaging materials
with respect thereto, or any intermediate of any of the foregoing, including
process and cost optimization, process qualification and validation, commercial
manufacture, stability, in-process and release testing, quality assurance and
quality control.   At BMS’s request, Five Prime’s shall continue to obtain
supply of FPA008 for the Current Combination Trial or the Current Five Prime
Non-I-O Studies after the Effective Date from CMOs engaged by Five Prime prior
to the Effective Date pursuant to agreements, statements of work or scopes of
work entered into prior to the Effective Date.  An allocation of the uses of
inventory of supply of FPA008 existing as of the Execution Date is set forth on
Schedule 5.1 hereto.  Any changes in such allocation after the Execution Date
will require BMS’s written approval.

5.2Transfer of Manufacturing Know-How; Existing Inventory of Licensed Antibodies
and Licensed Products. (i) As soon as practicable but no later than *** after
BMS requests such transfer, which request shall be made, if at all, during the
first *** after the Effective Date, Five Prime will use Commercially Reasonable
Efforts to transfer any then-existing manufacturing processes for FPA008 using
the cell line Five Prime licensed from Lonza or ICOS (the “Manufacturing
Process”); provided, that this obligation to use Commercially Reasonable Efforts
with respect to Lonza shall commence only upon the receipt of consent from Lonza
to sublicense to BMS as described in Section 3.9(a)(iii) and (ii) Five Prime
will, upon BMS’s request, which request shall be made, if at all, during the
first *** after the Effective Date, disclose Five Prime Licensed Know-How
relating to the Manufacturing Process to BMS or BMS’s designated CMO in a manner
consistent with Section 3.7 and/or disclose other Five Prime Licensed Know-How
relating to manufacture of Licensed Antibodies and Licensed Products to BMS or
such CMO ((i) and (ii), the “Manufacturing Process Transfer”). In addition to
the Manufacturing Process Transfer, Five Prime will use Commercially Reasonable
Efforts to provide reasonably requested assistance in connection with BMS’s or
its CMO’s manufacture of Licensed Antibodies and Licensed Products and to
cooperate to ensure that the Parties are able to satisfy regulatory requirements
for bio-comparability for the manufactured Licensed Antibody or Licensed Product
as promptly as practicable, which may include additional disclosures of Licensed
Know-How relating to the Manufacturing Process (“Manufacturing Process
Support”). Except for Five Prime’s internal FTE costs in the Manufacturing
Process Transfer,

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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which Five Prime shall pay, the costs and expenses of the Manufacturing Process
Transfer and Manufacturing Process Support shall be borne entirely by BMS, and
Five Prime shall invoice BMS for those costs and expenses incurred by Five Prime
in accordance with Section 7.4. Five Prime has separately provided to BMS a list
of existing inventories of Licensed Antibodies and Licensed Products and their
allocation to the Five Prime Development Activities as of the Execution Date. At
BMS’s written request made at any time within *** after the Effective Date, (i)
Five Prime will undertake Commercially Reasonable Efforts to obtain the consent
of any CMO engaged by Five Prime prior to the Effective Date to assign of the
master service agreements and statements and scopes of work thereunder between
Five Prime and such CMO under which such CMO has agreed to manufacture FPA008
drug substance; and (ii) BMS shall assume all such master service agreements and
related statements and scopes of work with respect to which such CMO has
consented to assignment, provided that (A) Five Prime shall have no obligation
to undertake to obtain any such consent for more than *** after BMS makes such
written request and (B) Five Prime shall have no obligation to pay any
consideration for or agree to any additional obligations or relinquish any
rights as a condition to obtaining any such consent.  BMS shall be responsible
for all payments and other amounts due to Five Prime’s CMOs that are due after
the Effective Date in consideration of supply of FPA0008, and shall reimburse
Five Prime for such amounts paid to the CMOs by Five Prime that were due on or
after the Effective Date. Such payments that are expected as of the Execution
Date are as described in Schedule 5.2 hereto.

5.3Provision of Licensed Product for Five Prime Development Activities.

(a)Supply of BMS Pipeline Assets.  BMS will use Commercially Reasonable Efforts
to supply quantities of filled and finished vials of drug product of Nivolumab
(with respect to Nivolumab Combinations) or any other applicable BMS Pipeline
Asset (with respect to BMS Pipeline Combinations) to Five Prime as necessary to
conduct the Five Prime Development Activities, pursuant to a supply agreement to
be entered into by the Parties as soon as practicable but no later than ***
after the Effective Date.  For clarity, the Parties will amend or otherwise
update such supply agreement promptly following a response by BMS to an
Independent Development Notice, pursuant to Section 4.3(f), that BMS will not
add a Five Prime Independent Development Path to the Development Plan, in such a
manner as not to delay the studies contemplated in the Independent Development
Notice.  Such supply agreement will address forecasting, ordering, procedures
for acceptance and rejection, and other customary provisions for the supply of
the applicable BMS Pipeline Asset (giving the Five Prime Development Activity
the same supply priority as any of BMS’s Clinical Trials applicable to such BMS
Pipeline Asset), as well as a mutually acceptable quality agreement.  Except (i)
with respect to supplies of Nivolumab for the conduct of the Current Combination
Trial (the costs of which will be borne solely by BMS) and (ii) as set forth in
Section 5.3(e), Five Prime would pay to BMS a Service Fee in connection with
such provision of supply as set forth in Section 5.3(d) below.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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(b)Supply of Licensed Product. BMS will use Commercially Reasonable Efforts to
supply Five Prime with filled and finished vials (except supplies made for
subcutaneous formulation) of Licensed Antibody or Licensed Product (in the form
currently in active Development or Commercialization by BMS), that are
reasonably necessary for Five Prime’s conduct of the Five Prime Development
Activities pursuant to a supply agreement to be entered into by the Parties as
soon as practicable but no later than *** after the Effective Date.  For
clarity, the Parties will amend or otherwise update such supply agreement
promptly following a response by BMS to an Independent Development Notice,
pursuant to Section 4.3(f), that BMS will or will not add a Five Prime
Independent Development Path to the Development Plan or that BMS will pursue a
BMS Replacement Combination, in such a manner as not to delay the studies
contemplated in the Independent Development Notice.  Such supply agreement will
address forecasting, ordering, procedures for acceptance and rejection, and
other customary provisions for the supply of the Licensed Product (giving the
Five Prime Independent Development Path the same supply priority as any of BMS’s
Clinical Trials under the Development Plan), as well as a mutually acceptable
quality agreement. Except for (i) the costs of FPA008 for the Current
Combination Trial (the costs of which will be borne solely by BMS), (ii) as set
forth in Section 4.3(a) and (iii) as set forth in Section 5.3(e), Five Prime
will pay to BMS a Service Fee in connection with such provision of supply of
Licensed Antibody and Licensed Product as set forth in Section 5.3(d) below.  

(c)Supply of Five Prime Pipeline Assets.  Five Prime will use Commercially
Reasonable Efforts to supply quantities of drug substance or drug product of any
Five Prime Pipeline Asset to BMS necessary to conduct the Development Plan,
pursuant to a supply agreement to be entered into by the Parties as soon as
practicable upon the decision by BMS to conduct an applicable Clinical
Trial.  Such supply agreement will address forecasting, ordering, procedures for
acceptance and rejection, and other customary provisions for the supply of the
applicable Five Prime Pipeline Asset (giving the Development Plan the same
supply priority as any of Five Prime’s Clinical Trials applicable to such Five
Prime Pipeline Asset).  BMS will purchase drug substance or drug product of any
Five Prime Pipeline Asset at a price equal to Five Prime’s Fully-Burdened
Manufacturing Costs for such amount of the respective Five Prime Pipeline Asset.

(d)Service Fees.  The service fee to be paid by Five Prime to BMS in
consideration of delivery of clinical supplies of BMS Pipeline Asset drug
product or Licensed Antibody or Licensed Product cGMP drug product pursuant to
Section 5.3(a) or Section 5.3(b) above (a “Service Fee”) shall be as set forth
in the following table.  Five Prime would pay any Service Fee due within ***
after Five Prime’s acceptance of the relevant drug product.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Non-Registrational Study or Registration-Enabling Study, with a number of
patients treated with the applicable Licensed Product or BMS Pipeline Asset set
forth below (on a compound-by-compound basis)

Service Fee for Clinical Drug Product

*** patients

***

*** patients

***

*** patients

***

*** patients

***

*** patients

***

*** patients

Service Fee to be agreed by Parties and included in an applicable supply
agreement.

 

(e)Supply for Preclinical Studies. For the purposes of Preclinical Studies of
Five Prime or Preclinical Development of BMS, each Party will use Commercially
Reasonable Efforts to supply the other Party with amounts of a BMS Pipeline
Asset (where such BMS Pipeline Asset is in or has completed
Registration-Enabling Clinical Trials in Oncology and is not available on the
market for purchase), a Five Prime Pipeline Asset (where such Five Prime
Pipeline Asset is included in an Independent Development Notice (solely for
purposes of the evaluation of the Independent Development Notice) or the
Development Plan), or a Licensed Antibody and/or a Licensed Product, without
charge to the other Party to the extent such supply does not exceed the
applicable Calendar Year maximum. The Calendar Year maximum quantity for FPA008
and Nivolumab shall be *** of each of FPA008 and Nivolumab and *** of the murine
versions of each of FPA008 and Nivolumab (in each case, if available), unless
otherwise agreed by the Parties. The Calendar Year maximum quantities for other
BMS Pipeline Assets, Five Prime Pipeline Assets, Licensed Antibodies and
Licensed Products, shall be agreed in good faith by the Parties within *** after
a request for Preclinical Studies from the applicable Party. If a Party wishes
to order quantities in a Calendar Year beyond the Calendar Year maximum, the
Parties will negotiate in good faith to agree upon a service fee or other
compensation in consideration of delivery of these additional supplies for
Preclinical Studies. The Parties will enter into a material transfer agreement,
that sets forth the applicable research plan, for each supply of BMS Pipeline
Assets, Five Prime Pipeline Assets, Licensed Antibodies and Licensed Products
for Preclinical Studies under this Section 5.3(e).  

(f)Inability to Supply.  If (i) a Party has a manufacturing process and is
currently producing or has produced clinical supplies of Licensed Antibody or
Licensed Product

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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(in the case of BMS) or a Five Prime Pipeline Asset (in the case of Five Prime)
for use in the Development Plan and (ii) such Party is unable to provide the
other Party with a reasonable supply of such product within *** of the other
Party’s request to have such Party supply such product pursuant to a supply
agreement in existence at the time (provided, in the case of BMS as the
supplying Party for FPA008, that Five Prime satisfied its obligations regarding
the Manufacturing Process Transfer and Five Prime has used Commercially
Reasonable Efforts to cooperate with BMS to ensure that the Parties are able to
satisfy regulatory requirements for bio-comparability for the manufactured
FPA008, each as described in Section 5.2) and (iii) there is an interruption in
such supply (pursuant to the terms of the applicable supply agreement) to the
other Party of sufficient quantities of such product to support such Party’s
Development activities hereunder and such interruption is ongoing for at least
*** (a “Supply Failure”), such Party (the “Failing Party”) would promptly
transfer to the other Party (the “Transferee Party”) or the Transferee Party’s
CMO (at such Failing Party’s reasonable cost and expenses including its internal
FTE costs) all relevant manufacturing Know-How necessary to manufacture such
product, including the then-current cell line and process used by such Failing
Party or its CMO, and otherwise cooperate to ensure that the Transferee Party is
able to satisfy regulatory requirements for bio-comparability for the
manufactured Licensed Antibody or Licensed Product and timely conduct its
development of such Five Prime Independent Development Path or conduct of
studies included in the then current Development Plan; provided that if such
Supply Failure is resolved, and such Transferee Party (or its CMO) has not
initiated GMP manufacture of such product, then such Transferee Party would have
no right to manufacture such product for any purpose, and all reasonable costs
incurred or then unavoidable by the Transferee Party (or its CMO), including any
termination costs, shall be paid by such Failing Party, and such Failing Party
shall continue to supply the Transferee Party promptly and in accordance with
the relevant supply agreement between the Parties; provided further that if the
Transferee Party (or its CMO) has initiated GMP manufacture of such product, the
Parties will cooperate with respect to orderly wind down of such manufacturing
wherein the Failing Party assumes full responsibility for such manufacture and
all reasonable costs incurred or then unavoidable by the Transferee Party (or
its CMO), including any wind down costs, shall be paid by such Failing Party,
and such Failing Party shall continue to supply the Transferee Party promptly
and in accordance with the relevant supply agreement between the Parties.  In
the event of a Supply Failure, the Failing Party also will grant to the
Transferee Party, for the duration of such Supply Failure, and for the duration
of any manufacturing process transfer, manufacturing, and wind-down periods
pursuant to the provisions of this Section 5.3(f), a non-exclusive, worldwide,
right and license (with the limited right to sublicense to CMOs and other
services providers and contractors) under the intellectual property Controlled
by the Failing Party that is necessary for the Transferee to manufacture or have
manufactured, or used by or on behalf of the Failing Party in its manufacture
of, such product solely to the extent required for the conduct of the
Development Plan or the Five Prime Development Activities (as applicable).  

(g)Supply Obligations Termination. Unless otherwise agreed in writing by the
Parties, the obligations of each Party to supply under the foregoing Sections
5.3(a), 5.3(b) and 5.3(c) shall commence on the Effective Date and expire upon
termination pursuant to

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Section 10.2, or upon on the later of: (i) *** anniversary of the Effective Date
or (ii) first BLA or Marketing Approval of a Licensed Product in a Major Market
(such period, the “Supply Term”).

5.4Subcutaneous Formulation.  Five Prime will have the right to conduct
development and manufacturing of clinical supplies of a subcutaneous formulation
of a Licensed Product solely for the purpose of conducting Clinical Trials of
PVNS or in Five Prime Non-Oncology Diseases.  Upon the request of BMS, following
the addition of a subcutaneous formulation of a Licensed Product to the
Development Plan, Five Prime will use Commercially Reasonable Efforts to conduct
a technology transfer to BMS relating to such subcutaneous formulation, and BMS
will pay or reimburse Five Prime for all incurred costs and expenses (including
all internal FTE costs at the FTE Rate) for such formulation and technology
transfer to BMS, which Five Prime shall invoice BMS in accordance with Section
7.4.  For clarity, Five Prime shall retain the right to conduct development and
manufacturing of clinical supplies of a subcutaneous formulation of a Licensed
Product for the purpose of conducting Clinical Trials of PVNS or in Five Prime
Non-Oncology Diseases, and may, if the Parties agree to add the subcutaneous
formulation to a supply agreement, purchase supplies of subcutaneous formulation
from BMS.

Article 6

COMMERCIALIZATION

6.1General.  Subject to Five Prime’s exercise of its option to Co-Promote one or
more Licensed Product(s) in the Field in the Co-Promotion Territory as set forth
in Section 6.5, BMS shall have the sole right and responsibility for the
Commercialization of the Licensed Products in the Field in the Territory at its
cost and expense.  

6.2Diligence.  BMS will use Commercially Reasonable Efforts to Commercialize
each Licensed Product in each country in the Major Markets in which BMS obtains
a Marketing Approval for such Licensed Product.

6.3Commercialization Report.  For each Calendar Year following the first
Regulatory Approval for any Licensed Product in any Major Market, BMS shall
provide to Five Prime annually within *** after the end of such Calendar Year a
written report that summarizes the Commercialization activities on a Licensed
Product-by-Licensed Product and country-by-country basis performed by or on
behalf of BMS and its Affiliates and sublicensees in the Major Markets since the
prior report by BMS.  Such report shall contain sufficient detail to enable Five
Prime to assess BMS’s compliance with its Commercialization obligations in
Section 6.2.  Such reports shall be Confidential Information of BMS pursuant to
Article 9.

6.4Decision-Making Authority.  Subject to Sections 6.2 and 6.5 and the
Co-Promotion Agreement, BMS shall have the sole decision-making authority for
all Commercialization related activities, including the operations and
Commercialization strategies

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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and decisions, including funding and resourcing, pricing, reimbursement, product
positioning, related to the Commercialization of Licensed Products.  

6.5Five Prime’s Co-Promotion Option.

(a)Five Prime shall have an option (the “Co-Promote Option”) to Co-Promote each
Licensed Product (but not any BMS Pipeline Assets or any other Proprietary BMS
agents) (upon exercise of such option, a “Co-Promotion Product”), to the
Co-Promotion Target Audience in the Co-Promotion Territory as set forth in this
Section 6.5.  

(b)BMS will notify Five Prime in writing no earlier than *** prior, and no later
than *** prior, to the date of BMS’s first Filing of a BLA for a Licensed
Product (the “BLA Notification”), followed by written notification to Five Prime
of the actual Filing of such BLA.  Together with such BLA Notification, BMS
shall provide Five Prime with the initial commercial plan for the Licensed
Product in the Co-Promotion Territory (“Initial Commercial Plan”), which shall
include projected sales force size, type and location of Details, skills and
experience of sales force, the proposed responsibilities of the Parties in the
event the Co-Promote Option is exercised, and other material information about
the proposed Commercialization of such Licensed Product in the Co-Promotion
Territory.

(c)Five Prime would have the right to exercise the Co-Promote Option for such
Licensed Product any time prior to *** after the Filing of such BLA (the
“Co-Promote Opt-in Deadline”). If Five Prime does not exercise the Co-Promote
Option prior to the Co-Promote Opt-in Deadline with respect to such Licensed
Product, the Co-Promote Option for such Licensed Product would terminate.

(d)If Five Prime provides written timely notice to BMS that Five Prime will
exercise the Co-Promote Option for such Licensed Product, Five Prime and BMS
shall promptly negotiate in good faith an agreement (a “Co-Promotion Agreement”)
, which agreement shall contain the material terms set forth in clauses (i)
through (viii) below as well as other customary and commercially reasonable
terms.  BMS and Five Prime shall use good faith efforts to enter into such
Co-Promotion Agreement promptly but no later than *** prior to the earliest
projected date for BLA Approval for the applicable Indication for such Licensed
Product in the United States. The Co-Promotion Agreement shall become effective
upon execution.

(i)BMS shall be responsible for preparing a commercialization plan for, and
managing the Co-Promotion of, the Co-Promotion Product, subject to Five Prime’s
involvement as specified in this Section 6.5.  BMS shall be solely responsible
for, and have sole control over, all Commercialization activities including
marketing strategy, pricing, discounting, reimbursement, messaging, plans and
activities, including the preparation of promotional materials and the sales
force deployment plan; provided, that BMS shall not favor the BMS-provided sales
force over the Five Prime-provided sales force and shall not use its
commercialization plan or its other control of the Commercialization of Licensed
Products

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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hereunder to disadvantage Five Prime’s portion of the sales force relative to
BMS’s portion of the sales force (e.g., Five Prime sales representatives shall
receive the same training, materials and resources, and shall (unless otherwise
agreed by the Parties) be allocated pro rata among the Target Audience, with
Details to each decile or quintile of prescribers being split *** between BMS
and Five Prime).

(ii)Five Prime shall have the right to use employees of Five Prime and its
Affiliates (but not a contract sales force) experienced in promotion and
Detailing products to the respective type of prescribers (with qualifications
substantially similar to BMS sales representatives who will be responsible for
detailing the Co-Promotion Product to the respective type of prescribers) to
provide Details under the Co-Promotion Plan in the Co-Promotion Territory with
respect to the Co-Promotion Product.  Five Prime shall have the right to provide
*** of all Details with respect to the Co-Promotion Product, with the allocation
and positioning of Detailing responsibilities to be established by BMS as part
of the sales force deployment plan, which will take into account the total size
of the sales force, Five Prime’s capabilities and resources and the strategic
and financial needs of the Co-Promotion Product, and which will allocate each
decile or quintile of prescribers between BMS and Five Prime on a pro rata
basis.  During the term of the Co-Promotion Agreement, BMS shall have the right
to adjust the total number of sales representatives promoting the Co-Promotion
Product, or to terminate the Co-Promotion Agreement (i) upon expiration of the
Royalty Term or (ii) in the event BMS ceases to actively promote the Licensed
Product in the Co-Promotion Territory.  In the case of any such adjustment
(other than termination), the number of sales representatives of Five Prime
shall be adjusted to maintain the percentage set forth in the Co-Promotion
Agreement.  In the event of any increase or decrease in the number of sales
representatives required of Five Prime, Five Prime shall have a commercially
reasonable period of at least *** to implement such increase or decrease.  Five
Prime shall be responsible for all costs associated with its sales
representatives. Compensation to Five Prime, should it elect Co-Promotion, will
be in accordance with 7.3(a)(ii).

(iii)Five Prime shall have the right, upon *** prior written notice to BMS
(which notice may be given at any time but will not result in termination until
*** after the date of such notice), to terminate its Co-Promotion rights and
obligations under this Section 6.5 for any Co-Promotion Product.  In such event,
Five Prime shall have no further right to Co-Promote such Licensed Product
following the end of such notice period, but shall continue to have the
Co-Promote Option, and if exercised, Co-Promotion rights and obligations with
respect to other Licensed Products.  If Five Prime terminates its Co-Promotion
rights and obligations under this Section 6.5(d)(iii) for any Co-Promotion
Product, it shall not be entitled to receive the Incremental Royalty pursuant to
Section 7.3(a)(ii) with respect to Net Sales made after such termination becomes
effective.

(iv)Five Prime shall use Commercially Reasonable Efforts to execute its
obligations under each Co-Promotion Agreement, consistent with the
commercialization plan established by BMS pursuant to the Co-Promotion
Agreement.  The Co-Promotion Agreement will set forth remedies for breach of
Five Prime’s obligations under the Co-Promotion

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Agreement and will include customary performance remedies available to BMS in
the event of the underperformance of Five Prime of its Detail obligations under
the Co-Promotion Plan, including (x) the right for BMS to perform the Detailing
that should have been performed by Five Prime (with the cost of any such
replacement being borne by Five Prime at a ***); and (y) if Five Prime
underperforms its Detailing obligations by *** or more in any Calendar Quarter,
the payment by Five Prime of an additional amount equal to *** if Five Prime
underperforms its Detailing obligations by *** or more in any Calendar Quarter
(regardless of whether BMS performs such Detailing that should have been
performed by Five Prime). The Co-Promotion Agreement will contain provisions to
address a situation where the Detailing efforts of both Parties are adversely
impacted by commercial or regulatory issues relating to a Co-Promotion
Product.  BMS’s termination remedies shall be reserved for (1) material breaches
of Five Prime’s obligations under the Co-Promotion Agreement that cannot be
cured, (2) uncured material failures, including the underperformance by Five
Prime of its Detail obligations under the Co-Promotion Plan of (x) greater than
***for a period of *** consecutive Calendar Quarters or (y) greater than *** for
a period of *** consecutive Calendar Quarters, or (3) an uncured material
compliance breach by Five Prime.  If BMS terminates the Co-Promotion Agreement
for any Co-Promotion Product, Five Prime shall not be entitled to receive the
Incremental Royalty pursuant to Section 7.3(a)(ii) with respect to Net Sales
made after such termination becomes effective.

(v)Five Prime shall, and shall cause its sales representatives to make only such
statements and claims regarding the Co-Promotion Product, including as to
efficacy and safety, as are consistent with the applicable FDA-approved product
labels and inserts and promotional materials prepared by BMS.  Five Prime shall
not, and Five Prime shall cause its sales representatives not to, make any
material untrue or misleading statements or comments about the Co-Promotion
Product.  Five Prime shall comply with all applicable BMS pharmaceutical
marketing and promotion policies, as set forth in the marketing and promotion
guidelines provided to Five Prime sales representatives and management in
writing by BMS in the course of the sales training described in clause (vi)
below.  

(vi)Prior to the First Commercial Sale of each Co-Promotion Product in the
Co-Promotion Territory and on a regular, at least annual, basis thereafter, BMS
shall provide training materials to, and train by holding in-person meetings or,
after the initial training, webcasts for, each member of Five Prime’s designated
sales force prior to his or her commencement of Co-Promotion of such
Co-Promotion Product to ensure that he or she is properly trained to promote and
Detail the Co-Promotion Product and able to satisfy Five Prime’s
responsibilities under the Co-Promotion Agreement.  The training materials and
meeting provided by BMS to Five Prime’s sales representatives shall be at Five
Prime’s cost (without markup) and shall be substantially the same as those
provided to BMS’s sales representatives and shall, if possible, be provided to
both groups of sales representatives at the same time and place.  Five Prime’s
sales representatives will participate in the national launch meeting and sales
meetings for the Co-Promotion Product.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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(vii)Five Prime sales representatives that are Co-Promoting a Co-Promotion
Product may also promote one or more Five Prime Proprietary products, subject to
the following conditions:  (1) at least *** of the Detailing effort of such
sales representatives are dedicated to the Co-Promotion Product, and (2) such
sales representatives shall not simultaneously Detail (A) another product
containing a CSF1R Antagonist, or (B) if such Co-Promotion Product is sold for
use with a BMS Combined Product, another product designed to bind to the same
Target or any known ligand of the same Target as such BMS Combined Product
(regardless if such other product is used as monotherapy or combination
therapy).  

(viii)If there is a Specified Change of Control of Five Prime that closes prior
to Five Prime’s exercise of its Co-Promotion Option with respect to a Licensed
Product, Five Prime’s Co-Promote Option with respect to such Licensed Product
would terminate upon the closing of such Specified Change of Control (and Five
Prime would not be eligible for any Incremental Royalty payments with respect to
such License Product pursuant to Section 7.3(a)(ii)).   If there is a Specified
Change of Control of Five Prime that closes after the exercise of a Co-Promote
Option by Five Prime, then BMS shall have the right, exercisable at any time
after the effective date of such Specified Change of Control and prior to the
date that is *** after the effective date of such Specified Change of Control to
terminate all Co-Promote Options that have not been exercised and all
Co-Promotion Agreements then in effect, which termination of Co-Promote Options
would be effective upon exercise of such termination right and which termination
of Co-Promotion Agreements would become effective *** after BMS’s exercise of
its termination right; provided in the event that a Co-Promotion Agreement is
then in effect with respect to a Licensed Product that has achieved Marketing
Approval in the U.S., Five Prime would retain the right to receive the
Incremental Royalty set forth in Section 7.3(a)(ii) (“Royalty Retention”).  

Article 7

FINANCIAL PROVISIONS

7.1Upfront Payment.  BMS shall pay to Five Prime a one-time, non-refundable,
non-creditable upfront payment of three hundred fifty million Dollars
($350,000,000) within thirty (30) days after the Effective Date.

7.2Milestone Payments. On a Licensed Product-by-Licensed Product basis, BMS
shall notify Five Prime in writing within *** after the achievement by BMS, its
Affiliates or sublicensees, of any milestone event set forth in this Section
7.2, and BMS will pay Five Prime the non-refundable, non-creditable (except as
set forth in Section 7.2(iii) below) milestone payments set forth in the tables
below (a) within *** of the first achievement of such milestone event by BMS,
its Affiliates or sublicensees, (b) with respect to PVNS Milestones achieved by
Five Prime, within *** of the first achievement of such PVNS Milestone event by
Five Prime, its Affiliates or sublicensees, of which Five Prime will notify BMS
in writing within *** after such achievement, or (c) with respect to milestone
events other than PVNS Milestones that are first

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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achieved by Five Prime, its Affiliates or sublicensees, in accordance with
Section 4.4(a) or 4.4(b), as applicable.

Event

Relating to a combination therapy of a Licensed Product and Nivolumab (and no
other product that is Proprietary to BMS)

1st Indication

 

2nd Indication

3rd Indication

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

Total

***

***

***

For clarity, in no event shall total milestone payments to be made with respect
to a particular Licensed Product exceed $505,000,000 in the aggregate for all
combination therapies of such Licensed Product with Nivolumab.

Event

Relating to a combination therapy of a Licensed Product and one or more Five
Prime Pipeline Assets or products that are Proprietary to BMS (at least one of
which is not Nivolumab) for use in the field of Oncology

 

1st Indication

(first occurrence)*

 

1st Indication

(second occurrence, i.e., a Licensed Product and a separate and distinct product
than the first occurrence)*

2nd Indication

(first occurrence)*

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

Total

***

***

***

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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For clarity, in no event shall total milestone payments to be made with respect
to a particular Licensed Product exceed $542,500,000 in the aggregate for all
combination therapy(ies) of such Licensed Product and one or more other products
(at least one of which is not Nivolumab) for use in the field of Oncology.

* For clarity, the first column of milestone payments in the preceding table,
totaling ***, refers to first achievement of such milestone event by a
particular Licensed Product in any combination therapy with any other product(s)
(so long as at least one of such product(s) is not Nivolumab) in any Indication.

The second column of milestone payments in the preceding table, totaling ***,
refers to first achievement of such milestone event by a particular Licensed
Product in any combination therapy with any other product(s) (so long as at
least one of such product(s) is not Nivolumab) in any Indication; provided, that
the combination therapy is not the same as the combination therapy that already
achieved the same milestone event for purposes of the first column of milestone
payments.

The third column of milestone payments in the preceding table, totaling ***,
refers to first achievement of such milestone event by a particular Licensed
Product in any combination therapy with any other product(s) (so long as at
least one of such product(s) is not Nivolumab); provided, that such milestone is
achieved in a second Indication for such combination therapy.

By way of example, for the “***” milestone event, if FPA008 + “Antibody A”
achieves ***, triggering the *** milestone payment in the first column, then
FPA008 + “Antibody A” cannot also trigger the payment of the *** milestone
payment in the second column for such milestone event, even if FPA008 +
“Antibody A” achieves ***. FPA008 + “Antibody A” would, however, trigger the
payment of the *** milestone payment in the third column, if it achieved ***
prior to any other FPA008-based combination doing so (and thus triggering the
milestone payment). For clarity, the milestone events for the third column are
not required to be achieved by the same combination therapy that achieved the
milestone events in the first or second columns. For example, FPA008 + “Antibody
A” in a first Indication could trigger the *** milestone payment and FPA008 +
“Antibody B” in a first Indication (which may be the same Indication or a
different Indication than the Indication for the *** milestone payment) could
trigger the *** milestone payment. A subsequent FPA008 + “Antibody C” in a first
Indication would not trigger the *** milestone payment for BLA Filing in US, but
FPA008 + “Antibody C” in a second Indication would trigger the *** milestone
payment, even though FPA008 + “Antibody C” in its first Indication had not
previously triggered a milestone payment for BLA Filing in US.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Event

Relating to each Licensed Product in PVNS or another indication outside of
Oncology (e.g., RA, IPF)

PVNS

1st Non-Oncology Indication other than PVNS

2nd Non-Oncology Indication other than PVNS

 

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

***

Total

***

***

***

 

For clarity, in no event shall total milestone payments to be made with respect
to a particular Licensed Product exceed $340,000,000 in the aggregate for such
Licensed Product in PVNS and other indications outside of Oncology.

 

The first column of milestone payments in the immediately preceding table,
totaling *** per Licensed Product, are referred to as the “PVNS Milestones.”

 

The term “Filing” as used above means the acceptance of filing of the applicable
application by a Regulatory Authority.  

The term “First BLA Approval” as used above, with respect to the US, means the
initial BLA Approval for the applicable Licensed Product or Licensed Product
combination therapy in the US.

The term “First Marketing Approval” as used above, with respect to the EU, means
a Marketing Approval for the applicable Licensed Product or Licensed Product
combination therapy in at least two of the Major European Countries, and with
respect to Japan, means the initial Marketing Approval for the applicable
Licensed Product or Licensed Product combination therapy in Japan.

The term “Indication” as used above means, with respect to a Licensed Antibody
or Licensed Product, the use of that Licensed Antibody or Licensed Product for
the treatment, prevention, mitigation or cure of: (i) any cancer with a
particular organ of origin; or (ii) any disease that is not a
cancer.  Indications that are cancers will be deemed the same for purposes of
this Agreement if the subject cancers have the same organ of origin even if they
are, for example, of a different histologic or genetic subtype or line of
therapy (e.g., well-differentiated and poorly differentiated gastric cancer,
NSCLC and SCLC, 1st line NSCLC and 2nd line NSCLC), and will be deemed different
if the subject cancers have different organs of origin (e.g., gastric cancer and

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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lung cancer).  Among non-solid tumor cancers, Indications for leukemia, lymphoma
and multiple myeloma, but not their subtypes or lines of therapy, shall be
considered different Indications.  

The following general principles shall apply to milestone payments set forth in
each of three tables in this Section 7.2:

(i)all milestone payments and milestone caps in this Section 7.2 are on a
Licensed Product-by-Licensed Product basis, and each Licensed Product could, if
it achieved all of the above milestone events (while complying with the
specified requirements for combination therapies, diseases and Indications),
trigger the payment of all of the milestone payments set forth in the three
tables above;

(ii)each milestone payment in each table shall be paid only once with respect to
a given Licensed Product, regardless of whether such Licensed Product is
approved for use in different presentations, formulations, dosages or as a fixed
dose combination product; provided, that this shall not alter the provisions of
this Section 7.2 that allow for the same Licensed Product to receive multiple
milestone payments, as set forth in the tables above, with respect to its use in
different diseases or Indications, or its use as part of different combination
therapies;

(iii)each milestone event may be achieved by a different Licensed Product and/or
Licensed Product combination therapy that achieves any other milestone events or
triggers any other milestone payments in the relevant table; provided that in
the event that development of a Licensed Product is discontinued, milestone
payments previously paid for such Licensed Product would be credited against the
milestone payments due on account of the subsequent Licensed Product to achieve
the milestone event for which such milestone payment was made;

(iv)in the event a Licensed Product or Licensed Product combination (A) achieves
an “***” milestone event before it achieves the “***” milestone event, then such
“***” milestone event shall be deemed achieved, and the corresponding milestone
payment shall become due and payable within *** subsequent to the achievement of
the “***” milestone date, (B) achieves a *** (as applicable) milestone event
before achieving the “***” and/or “***” milestone event(s), then each of such
milestone event(s) shall be deemed achieved, and the corresponding milestone
payment(s) shall become due and payable within *** of achieving the *** (as
applicable) milestone event;

(v)the terms “1st Indication,” “2nd Indication”, “3rd Indication”, “1st
Non-Oncology Indication other than PVNS” and “2nd Non-Oncology Indication other
than PVNS” do not each necessarily refer to the same Indication with respect to
different milestone events, but rather to the order in which a particular
milestone event is achieved with respect to a particular Licensed Product (or
Licensed Product combination therapy) for multiple Indications.  For example, if
BLAs are filed in the US for FPA008 + Nivolumab first in lung cancer, second in
breast cancer and third in brain cancer, those are the respective 1st
Indication, 2nd Indication and 3rd Indication for FPA008 + Nivolumab for BLA
Filing in the US milestone events in the first table, but if

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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BLAs are approved in the US for FPA008 + Nivolumab in the following order, first
in breast cancer, second in lung cancer and third in pancreatic cancer, then
those are the respective 1st Indication, 2nd Indication and 3rd Indication for
FPA008 + Nivolumab for the BLA Approval in the US milestone events in the first
table;

(vi)In the event that a milestone event (other than for a PVNS Milestone) is
achieved by Five Prime acting within its development rights with respect to a
Five Prime Independent Development Path, the milestone payment associated with
such milestone shall become payable by BMS to Five Prime as provided in Section
4.4(a) and 4.4(b).  For clarity, for milestone events for PVNS Milestones that
are achieved in the Five Prime Independent Development Path, BMS shall pay the
corresponding milestone payment without deferral under Section 4.4(a) or 4.4(b),
as set forth in this Section 7.2; and

(vii)In the event of a Phase 1/2 Clinical Trial, any milestone event related to
Initiation of a Phase 2 Clinical Trial shall be achieved upon the first dosing
of the first human subject in the Phase 2 portion of such Phase 1/2 Clinical
Trial (as identified in the applicable protocol). In the event of a Phase 2/3
Clinical Trial, any milestone event related to Initiation of a Phase 3 Clinical
Trial shall be achieved upon the first dosing of the first human subject in the
Phase 3 portion of such Phase 2/3 Clinical Trial (as identified in the
applicable protocol).

7.3Royalty Payments.

(a)Royalty Rates.  Subject to the other terms of this Section 7.3, during the
applicable Royalty Term, BMS shall make quarterly non-refundable, non-creditable
royalty payments to Five Prime. The royalty payable with respect to each
particular Licensed Product shall be based on the level of total worldwide Net
Sales of such Licensed Product in the Field in the Territory in a given Calendar
Quarter, with the royalty rate tiered based upon the level of such total
worldwide Net Sales of such Licensed Product in the Field in the Territory in
such Calendar Quarter by BMS, its Affiliates or sublicensees.  Royalties shall
be calculated by multiplying the applicable royalty rates by the corresponding
amount of the portion of Net Sales of the applicable Licensed Product within
each of the Net Sales tiers during such Calendar Quarter as set forth below.

(i)Base Royalty.  BMS shall pay royalties to Five Prime, based on the following
royalty rates, with respect to all worldwide Net Sales of each Licensed Product:

Portion of total worldwide Net Sales in a Calendar Quarter for such Licensed
Product that falls within the following tiers:

Percentage of Net Sales Rate

Less than or equal to ***

***

Greater than *** and less than or equal to ***

***

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Greater than *** and less than or equal to ***

***

Greater than ***

***

(ii)Five Prime’s Exercise of Co-Promote Option; Incremental Royalty.  Subject to
Section 7.3(b), if Five Prime has exercised its Co-Promote Option under Section
6.5 with respect to a particular Licensed Product, then in addition to the
royalties paid pursuant to Section 7.3(a)(i), BMS shall pay an extra royalty to
Five Prime, at a rate of *** of Net Sales of such Licensed Product in the
Co-Promotion Territory (“Incremental Royalty”). The Incremental Royalty with
respect to a particular Licensed Product shall terminate if Five Prime
terminates its Co-Promotion rights and obligations with respect to such Licensed
Product as described in Section 6.5(d)(iii), or if BMS terminates the
Co-Promotion Agreement with respect to such Licensed Product as described in
Section 6.5(d)(ii) or Section 6.5(d)(iv), but in each case, not including a
Royalty Retention.  For clarity, the Incremental Royalty is in compensation to
Five Prime for performing its Co-Promotion activities and is not related to
Patents that Cover a Licensed Product.  An example of the calculation of the
royalty payments due hereunder is shown in Exhibit F.

(b)Royalty Term.  BMS’s royalty payment obligations under Section 7.3(a)(i) of
this Agreement shall commence upon the First Commercial Sale of the first
Licensed Product anywhere in the world by BMS, its Affiliates or its
sublicensees, and shall continue, on a Licensed Product-by-Licensed Product and
country-by-country basis, until the latest of (i) the expiration of the
last-to-expire Valid Claim included in Five Prime Licensed Patents or
Collaboration Patents in such country that Covers such Licensed Product; (ii)
the expiration of any Regulatory Exclusivity granted with respect to such
Licensed Product in such country; (iii) the First Commercial Sale in such
country of a Biosimilar Product with respect to such Licensed Product; or (iv)
twelve (12) years after the First Commercial Sale of such Licensed Product in
such country (the “Royalty Term”). Upon the expiration of the Royalty Term with
respect to a Licensed Product in a country, BMS shall have a fully-paid-up,
non-exclusive, perpetual sublicensable license under Section 3.1(a) for the
making, using, selling, offering for sale and importing of such Licensed Product
in such country.  Notwithstanding the foregoing, BMS’s obligation to pay
Incremental Royalties under Section 7.3(a)(ii) shall continue for a given
Co-Promotion Product for as long as Five Prime is Co-Promoting such Co-Promotion
Product.

(c)Royalty Reductions.  

(i)Patent Expiration; Royalty Step-Down. If during the Royalty Term for a
particular Licensed Product in a particular country, the expiration of the
last-to-expire Valid Claim included in Five Prime Licensed Patents or
Collaboration Patents in such country that Covers such Licensed Product (or its
manufacture or use) occurs at a time when the royalty reduction set forth in
Section 7.3(c)(ii) is not applicable with respect to such Licensed Product in
such country, then the royalties paid pursuant to Section 7.3(a)(i) for Net
Sales of such Licensed

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Product in such country shall be decreased by *** for the remainder of the
Royalty Term for such Licensed Product in such country (or until the royalty
reduction set forth in Section 7.3(c)(ii) becomes applicable to such Licensed
Product in such country or a new Valid Claim included the Five Prime Licensed
Patents or Collaboration Patents issues in such country that Covers such
Licensed Product or its manufacture or use, in each case whichever happens
first), to reflect the decrease in value of the licenses in Section 3.1(a) due
to the lack of Patents that Cover such Licensed Product or its manufacture or
use in such country.  For example, if for a particular Calendar Quarter, the
worldwide Net Sales for a particular Licensed Product are ***, of which *** of
such Net Sales were for the United States, and the United States was the only
country in which such Licensed Product was sold where there was not any Valid
Claim in the Five Prime Licensed Patents or Collaboration Patents that Cover
such Licensed Product or its manufacture or use, then the royalty payment that
would otherwise have been due to Five Prime pursuant to Section 7.3(a)(i) on
account of such Net Sales is ***, *** of which would have been for Net Sales of
such Licensed Product in United States; the royalty reduction specified in this
Section 7.3(c)(i) would reduce such US-based royalty by *** (i.e., ***), so the
royalty due to Five Prime pursuant to Section 7.3(a)(i) after application of
this Section 7.3(c)(i) will be *** (i.e., *** minus ***). For clarity, the
Incremental Royalty, which is not paid in consideration of Patents that Cover
the Licensed Product, shall be unaffected by this Section 7.3(c)(i).

(ii)Biosimilar Product. If a Licensed Product is generating Net Sales in a
country during the applicable Royalty Term at a time when a Biosimilar Product
with respect to such Licensed Product is being sold in such country, then the
royalty rate applicable to Net Sales of such Licensed Product in such country in
such Calendar Quarter shall be reduced to *** of the royalty rate otherwise
applicable to the Net Sales of such Licensed Product in such country under
Section 7.3(a)(i), for so long as the Biosimilar Product is being sold in such
country.  

(iii)Third Party Royalties.  If BMS obtains a license from a Third Party under
any Patent controlled by such Third Party in a country in the Territory, where,
in BMS’s reasonable judgment, a license to such Patent is necessary in order to
Develop or Commercialize any Licensed Antibody or Licensed Product in such
country, BMS shall have the right to deduct from the royalty payment that would
otherwise have been due under Section 7.3(a)(i) with respect to Net Sales of
such Licensed Product in such country in a particular Calendar Quarter, an
amount equal to *** of the upfront payment, milestone payments, and royalties
paid by BMS to such Third Party pursuant to such license on account of the sale
of such Licensed Product in such country during such Calendar Quarter; provided,
however, that in no event shall the royalties payable to Five Prime pursuant to
Section 7.3(a)(i) (without taking into account any reduction pursuant to Section
7.3(c)(i) or 7.3(c)(ii)) be reduced by more than *** in any Calendar Quarter by
operation of this Section 7.3(c)(iii); provided that any unused offsets may be
rolled over and offset against amounts otherwise due to Five Prime for base
royalty payments for the same Licensed Product in subsequent Calendar Quarters,
but in each case still subject to the prohibition on reduction past *** in any
Calendar Quarter set forth in this Section 7.3(c)(iii) and the royalty floor set
forth in Section 7.3(c)(v). For clarity, except as set forth in

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Section 7.4(d), Five Prime shall be responsible for all payment obligations to
any Third Parties pursuant to licenses obtained by Five Prime prior to the
Effective Date with respect to any intellectual property obtained from a Third
Party that is included in the Five Prime Licensed Technology.

(iv)Treatment of Incremental Royalty. The Incremental Royalty for a Licensed
Product is not subject to reduction for any reason, but shall be subject to
termination with respect to such Licensed Product as set forth in Section
7.3(a)(ii).  

(v)Royalty Floor.  The application of all deductions under this Section 7.3(c)
shall not operate in any case to reduce the royalties payable to Five Prime
pursuant to Section 7.3(a)(i) with respect to a particular Licensed Product in a
country in an applicable Calendar Quarter by more than ***; provided that any
unused offsets may be rolled over and offset against amounts otherwise due to
Five Prime in subsequent Calendar Quarters for royalty payments pursuant to
Section 7.3(a)(i) on the same Licensed Product, but in each case still subject
to the royalty floor set forth in this Section 7.3(c)(v). For clarity, royalties
paid by BMS to Five Prime pursuant to Section 7.3(a)(i) for any Calendar
Quarter, after application of all reductions under Section 7.3(c), shall never
be less than:

Portion of total worldwide Net Sales in a Calendar Quarter for such Licensed
Product that falls within the following tiers:

Percentage of Net Sales Rate

Less than or equal to ***

***

Greater than *** and less than or equal to ***

***

Greater than *** and less than or equal to ***

***

Greater than ***

***

 

(d)Licenses from Third Parties for Manufacturing Licensed Products, Including
Existing Third Party Obligations.  From and after the Effective Date, BMS will
bear all responsibility for upfront fees, maintenance fees, milestone payments,
royalties and similar fees or payments owed to any Third Party with respect to
intellectual property relating to the manufacturing of (or drug delivery of) a
Licensed Product, including such intellectual property that is licensed by Five
Prime as of the Effective Date and that BMS chooses to use with respect to such
Licensed Product, including the expression vectors or cell lines for manufacture
of a Licensed Product (e.g., any intellectual property licensed pursuant to the
Lonza Agreement or ICOS Agreement).  

(e)Royalty Reports and Payment.  Within *** after each Calendar Quarter,
commencing with the Calendar Quarter during which the First Commercial Sale of
the first

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Licensed Product is made anywhere in the world, BMS shall provide Five Prime
with a report that contains the following information for the applicable
Calendar Quarter, on a Licensed Product-by-Licensed Product and
country-by-country basis: (i) the amount of Net Sales of the Licensed Products,
(ii) a calculation of the royalty payment due on such sales, including any
royalty reduction made in accordance with Section 7.3(c), and (iii) the exchange
rate for such country.  Concurrent with the delivery of the applicable quarterly
report, BMS shall pay in Dollars all royalties due to Five Prime with respect to
Net Sales by BMS, its Affiliates and their respective sublicensees for such
Calendar Quarter.

7.4Currency; Exchange Rate; Invoices.  All payments to be made by BMS to Five
Prime under this Agreement shall be made in Dollars by electronic funds transfer
in immediately available funds to a bank account designated in writing by Five
Prime.  Conversion of sales recorded in local currencies to Dollars shall be
performed in a manner consistent with BMS’s normal practices used to prepare its
audited financial statements for internal and external reporting purposes. Five
Prime may invoice BMS for amounts to be paid by BMS under this Agreement. Upon
request, Five Prime will provide BMS with reasonable supporting documentation
for an invoice, up to *** following issuance of the invoice.  Unless otherwise
expressly set forth in this Agreement, Five Prime will not invoice BMS prior to
*** in advance of the date such payment is due from BMS under this Agreement,
and BMS will pay each invoice within *** after BMS receives such invoice.

7.5Late Payments.  Any payments or portions thereof due hereunder that are not
paid on the date such payments are due under this Agreement shall bear interest
at a rate equal to the lesser of: (a) *** above the prime rate as published by
Citibank, N.A., New York, New York, or any successor thereto, at 12:01 a.m. on
the first day of each Calendar Quarter in which such payments are overdue or (b)
the maximum rate permitted by Applicable Laws; in each case calculated on the
number of days such payment is delinquent, compounded monthly.

7.6Taxes.

(a)Taxes on Income.  Except as set forth in this Section 7.6, each Party shall
be solely responsible for the payment of any and all taxes levied on account of
all payments it receives under this Agreement.  

(b)Tax Cooperation.  The Parties agree to cooperate with one another in
accordance with Applicable Laws and use reasonable efforts to minimize tax
withholding or similar obligations in respect of royalties, milestone payments,
and other payments made by BMS to Five Prime under this Agreement.  To the
extent BMS is required to deduct and withhold taxes on any payment to Five
Prime, BMS shall pay the amounts of such taxes to the proper Governmental
Authority in a timely manner, and BMS promptly shall transmit to Five Prime an
official tax certificate or other evidence of such payment sufficient to enable
Five Prime to claim such payment of taxes on Five Prime’s applicable tax
returns. BMS shall provide Five Prime with advance notice prior to withholding
any taxes from payments payable to Five

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Prime and shall provide Five Prime with a commercially reasonable period of time
to claim an exemption or reduction in otherwise applicable taxes. Five Prime
shall provide BMS any tax forms that may be reasonably necessary in order for
BMS to not withhold tax or to withhold tax at a reduced rate under an applicable
bilateral income tax treaty, to the extent BMS is legally able to do so.  Five
Prime shall use reasonable efforts to provide any such tax forms to BMS in
advance of the due date.  Each Party shall provide the other with reasonable
assistance to enable the recovery, as permitted by Applicable Laws, of
withholding taxes or similar obligations resulting from payments made under this
Agreement, such recovery to be for the benefit of BMS if BMS is the Party
bearing such withholding tax under this Section 7.6. In addition, the Parties
shall cooperate in accordance with Applicable Laws to minimize indirect taxes
(such as value added tax, sales tax, consumption tax and other similar taxes) in
connection with this Agreement

(c)Notwithstanding anything to the contrary in this Agreement, if BMS assigns,
transfers or otherwise disposes of some or all of its rights and obligations to
any Person and if, as a result of such action, the withholding or deduction of
tax required by Applicable Laws with respect to payments under this Agreement is
increased, then any amount payable to Five Prime in the U.S. under this
Agreement shall be increased to take into account such withheld taxes as may be
necessary so that, after making all required withholdings (including
withholdings on the withheld amounts), Five Prime in the U.S. receives an amount
equal to the sum it would have received had no such withholding been made. In
the event that Five Prime requests that BMS make a payment to a Five Prime
account not located in the U.S., then any taxes that are required to be withheld
in excess of the amount that would have been withheld had the payment been made
to the U.S., shall be at the risk of and borne by Five Prime.

(d)All transfer, documentary, sales, use, stamp, registration and other such
taxes, and any conveyance fees, recording charges and other fees and charges
(including any penalties and interest) incurred in connection with consummation
of the transactions contemplated hereby, if any, shall be borne and paid by
BMS.  BMS shall prepare and timely file all tax returns required to be filed in
respect of any such taxes.  The Parties shall reasonably cooperate in accordance
with Applicable Laws to minimize transfer taxes in connection with this
Agreement.

(e)Customs Valuations. BMS will provide Five Prime with country-specific customs
valuations for Licensed Products and/or the BMS Pipeline Assets supplied by BMS,
which Five Prime must use for deliveries to each country.  Five Prime must
request these valuations at least thirty (30) days prior to each shipment
through the BMS clinical supplies organization.

7.7Records and Audit Rights.  Each Party shall maintain complete and accurate
records in sufficient detail to permit the other Party to confirm the accuracy
of the amount of Development Expenses, achievement of milestones, royalty
payments and other amounts payable under this Agreement.  Upon reasonable prior
notice, such records shall be open during regular business hours for a period of
*** from the creation of individual records for examination by an

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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independent certified public accountant selected by the auditing Party and
reasonably acceptable to the audited Party for the sole purpose of verifying for
the auditing Party the accuracy of the financial reports furnished by the
audited Party pursuant to this Agreement or of any payments made, or required to
be made, by or to the audited Party pursuant to this Agreement.  Such audits not
occur more often than *** each ***.  Such auditor shall not disclose the audited
Party’s Confidential Information to the auditing Party or to any Third Party,
except to the extent such disclosure is necessary to verify the accuracy of the
financial reports furnished by the audited Party or the amount of payments to or
by the audited Party under this Agreement.  Any amounts shown to be owed but
unpaid shall be paid within *** after the accountant’s report, plus interest (as
set forth in Section 7.5) from the original due date.  The auditing Party shall
bear the full cost of such audit unless such audit reveals an overpayment to, or
an underpayment by, the audited Party that resulted from a discrepancy in the
financial report provided by the audited Party for the audited period, which
underpayment or overpayment was more than *** of the amount set forth in such
report, in which case the audited Party shall reimburse the auditing Party for
the costs for such audit.  The audited Party will refund to the auditing Party
any such overpayment received by the audited Party within *** after the
accountant’s report.

Article 8

INTELLECTUAL PROPERTY RIGHTS  

8.1Ownership of Collaboration Intellectual Property.  

(a)Relating to BMS Pipeline Assets.  As between the Parties, BMS shall solely
own all Collaboration Intellectual Property that relates exclusively to a BMS
Pipeline Asset; regardless of which Party(ies) or their Affiliates or
sublicensees conceives, discovers, invents, creates, makes or reduces to
practice or tangible medium such Collaboration Intellectual Property.

(b)Relating Exclusively to Five Prime Pipeline Assets.  As between the Parties,
Five Prime shall solely own all Collaboration Intellectual Property that relates
exclusively to a Five Prime Pipeline Asset, regardless of which Party(ies) or
its Affiliates or sublicensees conceives, discovers, invents, creates, makes or
reduces to practice or tangible medium such Collaboration Intellectual Property.

(c)Relating to Certain Combinations.  

(i)As between the Parties, the Parties shall jointly own all Collaboration
Intellectual Property that (1) relates to a combination of a Licensed Antibody
or a Licensed Product together with a BMS Pipeline Asset and is solely
conceived, discovered, invented, created, made or reduced to practice or
tangible medium by or on behalf of Five Prime or its Affiliate; (2) relates to a
combination of a Licensed Antibody or a Licensed Product together with a Five
Prime Pipeline Asset and is solely conceived, discovered, invented, created,

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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made or reduced to practice or tangible medium by or on behalf of BMS or its
Affiliate or sublicensee; or (3) relates to any combination of a Licensed
Antibody or Licensed Product together with either (x) a BMS Pipeline Asset or
(y) a Five Prime Pipeline Asset that is conceived, discovered, invented,
created, made or reduced to practice or tangible medium jointly by employees,
agents or contractors of both Parties or their respective Affiliates or
sublicensees.

(ii)As between the Parties, BMS shall own all Collaboration Intellectual
Property that  relates to a combination of a Licensed Antibody or a Licensed
Product together with a BMS Pipeline Asset and is solely conceived, discovered,
invented, created, made or reduced to practice or tangible medium by or on
behalf of BMS or its Affiliate.

(iii)As between the Parties, Five Prime shall own all Collaboration Intellectual
Property that relates to a combination of a Licensed Antibody or a Licensed
Product together with a Five Prime Pipeline Asset and is solely conceived,
discovered, invented, created, made or reduced to practice or tangible medium by
or on behalf of Five Prime or its Affiliate or sublicensee.

(d)Other Collaboration IP.  Except as set forth in Section 8.1(a), Section
8.1(b) and Section 8.1(c) above, each Party, as between such Party and the other
Party, shall solely own all Collaboration Intellectual Property conceived,
discovered, invented, created, made or reduced to practice or tangible medium
solely by employees, agents or contractors of such Party or its Affiliates or
sublicensees, and the Parties shall jointly own and have an undivided one-half
interest in and to, without a duty of accounting or an obligation to seek
consent from the other Party for the exploitation or license of thereof (subject
to the licenses granted to the other Party under this Agreement), all
Collaboration Intellectual Property conceived, discovered, invented, created,
made or reduced to practice or tangible medium jointly by employees, agents or
contractors of both Parties or their respective Affiliates or sublicensees (such
Collaboration Intellectual Property, together with the Collaboration
Intellectual Property described in Section 8.1(c) above, “Joint IP”).  All
determinations of inventorship under this Agreement shall be made in accordance
with the patent law of the United States.  Know-How included in Joint IP shall
be referred to as “Joint Know-How” and Patents included in Joint IP shall be
referred to as “Joint Patents”.

(e)Disclosure of Collaboration Intellectual Property.  Each Party shall promptly
disclose to the other Party all Collaboration Intellectual Property, including
all invention disclosures or other similar documents submitted to such Party by
its, or its Affiliates’ or sublicensees’, employees, agents or independent
contractors relating to such Collaboration Intellectual Property, and shall also
respond promptly to reasonable requests from the other Party for additional
information relating to such Collaboration Intellectual Property.

8.2Unilateral Intellectual Property.  As between the Parties, Five Prime shall
solely own all Unilateral Intellectual Property, including all Patents claiming
Unilateral Intellectual Property (“Unilateral Patents”). If there are any
Unilateral Patents for which all

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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claims are specifically directed to the composition of matter of, or method of
manufacture or use, formulation, or pharmaceutical composition of a BMS Pipeline
Asset, such Patents are “Unilateral BMS Pipeline Patents”.

8.3Patent Prosecution.

(a)Product-Specific Patents.

(i)As between the Parties, BMS shall be responsible for filing, prosecuting and
maintaining the Product-Specific Patents through outside counsel mutually agreed
upon by the Parties (the “Patent Firm”).  The foregoing right of BMS shall
include the right to perform all actions of a reference product sponsor set
forth in 42 USC 262(l).  The Parties will agree upon the selection of an outside
counsel as the Patent Firm.  BMS shall be responsible for, and shall bear *** of
the costs and expenses of filing, prosecuting and maintaining the
Product-Specific Patents.  BMS shall consult with Five Prime and keep Five Prime
reasonably informed of the status of the Product-Specific Patents and shall
direct outside counsel to promptly provide Five Prime with copies of material
correspondence received from any patent authorities in connection therewith.  In
addition, BMS shall promptly provide Five Prime with drafts of all proposed
material filings and correspondences to any patent authorities with respect to
the Product-Specific Patents for Five Prime’s review and comment prior to the
submission of such proposed filings and correspondences.  BMS shall confer with
Five Prime and reasonably consider Five Prime’s comments prior to submitting
such filings and correspondences, provided that Five Prime provides such
comments within *** of receiving the draft filings and correspondences from
BMS.  If Five Prime does not provide comments within such period of time, then
Five Prime shall be deemed to have no comment to such proposed filings or
correspondences.  In case of disagreement between the Parties with respect to
the filing, prosecution and maintenance of such Product-Specific Patents, the
final decision shall be made by BMS except in the event where Five Prime
reasonably believes that the implementation of the decision proposed by BMS
would have a material detrimental effect on the scope or enforceability of the
Product-Specific Patents, related Five Prime Licensed Patents or any other
Patent owned or controlled by Five Prime.  For the purpose of this Article 8,
“prosecution” shall include any post-grant proceeding including supplemental
examination, post-grant review proceeding, inter parties review proceeding,
patent interference proceeding, opposition proceeding and reexamination.

(ii)BMS shall notify Five Prime in writing of any decision not to file, or to
cease prosecution and/or maintenance of, any Product-Specific Patent in any
country.  BMS shall provide such notice at least *** prior to any filing or
payment due date, or any other due date that requires action in order to avoid
loss of rights, in connection with such Product-Specific Patent.  In such event,
Five Prime may, after reasonable discussion or consultation with BMS, at Five
Prime’s discretion and expense, continue prosecution or maintenance of such
Product-Specific Patent in such country and BMS’s license pursuant to Section
3.1(a) shall become non-

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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exclusive and BMS shall no longer have any rights to enforce such
Product-Specific Patent against infringement.

(b)Five Prime Prosecuted Patents.

(i)As between the Parties, Five Prime shall be responsible for filing,
prosecuting and maintaining the Five Prime Licensed Patents that are not
Product-Specific Patents (collectively, the “Five Prime Prosecuted Patents”),
and BMS shall reimburse Five Prime for *** of the costs and expenses incurred by
Five Prime in connection therewith.  Five Prime shall consult with BMS and keep
BMS reasonably informed of the status of the Five Prime Prosecuted Patents and
shall promptly provide BMS with copies of material correspondence received from
any patent authorities in connection therewith.  In addition, Five Prime shall
promptly provide BMS with drafts of all proposed material filings and
correspondences to any patent authorities with respect to the Five Prime
Prosecuted Patents for BMS’s review and comment prior to the submission of such
proposed filings and correspondences.  Five Prime shall confer with BMS and
reasonably consider BMS’s comments prior to submitting such filings and
correspondences, provided that BMS shall provide such comments within *** of
receiving the draft filings and correspondences from Five Prime.  If BMS does
not provide comments within such period of time, then BMS shall be deemed to
have no comment to such proposed filings or correspondences.  In case of
disagreement between the Parties with respect to the filing, prosecution and
maintenance of such Five Prime Prosecuted Patents, the final decision shall be
made by Five Prime.  

(ii)BMS shall notify Five Prime in writing of any decision to cease paying for
*** of the costs and expenses incurred by Five Prime in connection with the
filing, prosecution or maintenance of any Five Prime Prosecuted Patent in any
country.  BMS shall not be responsible for any such costs and expenses incurred
with respect to such Five Prime Prosecuted Patent in such country more than ***
after such notice and such Five Prime Prosecuted Patent shall cease to be a Five
Prime Licensed Patent and BMS shall not have any license pursuant to Section
3.1(a) or any other rights under this Agreement with respect thereto.  

(iii)Five Prime shall notify BMS in writing of any decision to cease prosecution
and/or maintenance of, any Five Prime Prosecuted Patents in any country.  Five
Prime shall provide such notice at least *** prior to any filing or payment due
date, or any other due date that requires action in order to avoid loss of
rights, in connection with such Five Prime Prosecuted Patent.  In such event,
Five Prime shall permit BMS, at its discretion and expense, to continue
prosecution or maintenance of such Five Prime Prosecuted Patent in such
country.  BMS’s prosecution or maintenance of such Five Prime Prosecuted Patent
shall not change the Parties’ respective rights and obligations under this
Agreement with respect to such Five Prime Prosecuted Patent other than those
expressly set forth in this Section 8.3(b)(iii).

(iv)If any Five Prime Prosecuted Patent contains one or more claims that are
specifically directed to the composition of matter of, or method of manufacture
or use,

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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formulation, or pharmaceutical composition of (1) one or more CSF1R Antibodies
(whether alone or in combination with another agent) or (2) CSF1R, then at BMS’s
request and expense, Five Prime shall use commercially reasonable efforts to
file such claims in a separate application (e.g., a continuation,
continuation-in-part, or divisional application), which application would then
be a Product-Specific Patent and therefore subject to the patent prosecution
provisions set forth in Section 8.3(a).

(c)Joint Patents that are not Product-Specific Patents or Five Prime Licensed
Patents

(i)If either Party decides to seek any Joint Patents that would not be
Product-Specific Patents or Five Prime Licensed Patents, then BMS shall have the
first right, but not the obligation, to file, prosecute and maintain throughout
the world, any such Joint Patents, through the Patent Firm.  If BMS elects not
to exercise such right, then Five Prime shall have the right, but not the
obligation, to file, prosecute and maintain throughout the world, such Joint
Patent, through the Patent Firm. The prosecuting Party shall consult with the
non-prosecuting Party and keep the non-prosecuting Party reasonably informed of
the status of such Joint Patents and shall direct outside counsel to promptly
provide the non-prosecuting Party with copies of material correspondence
received from any patent authorities in connection therewith.  In addition, the
prosecuting Party shall promptly provide the non-prosecuting Party with drafts
of all proposed material filings and correspondences to any patent authorities
with respect to such Joint Patents for the non-prosecuting Party’s review and
comment prior to the submission of such proposed filings and
correspondences.  The prosecuting Party shall confer with the non-prosecuting
Party and reasonably consider the non-prosecuting Party’s comments prior to
submitting such filings and correspondences, provided that the non-prosecuting
Party provides such comments within *** of receiving the draft filings and
correspondences from the prosecuting Party.  If the non-prosecuting Party does
not provide comments within such period of time, then the non-prosecuting Party
shall be deemed to have no comment to such proposed filings or
correspondences.  In case of disagreement between the Parties with respect to
the filing, prosecution and maintenance of such Joint Patents, the final
decision shall be made by the prosecuting Party except in the event where the
non-prosecuting Party reasonably believes that the implementation of the
decision proposed by the prosecuting Party would have a material detrimental
effect on the scope or enforceability of the Product-Specific Patents, related
Five Prime Licensed Patents or any other Patent owned or controlled by the
non-prosecuting Party.  Except as provided in Section 8.3(c)(ii), the Parties
shall share equally all costs and expenses incurred in connection with the
prosecution and maintenance of such Joint Patents under this Section
8.3(c)(i).  The non-prosecuting party shall have the right, but not the
obligation, to be present at all patent office proceedings that relate to the
Joint Patents under this Section 8.3(c)(i).

(ii)The prosecuting Party shall notify the non-prosecuting Party in writing of
any decision not to file, or to cease prosecution and/or maintenance of, any
Joint Patent in any country that is not a Product-Specific Patent or a Five
Prime Licensed Patent.  The prosecuting Party shall provide such notice at least
*** prior to any filing or payment due date,

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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or any other due date that requires action in order to avoid loss of rights, in
connection with such Joint Patent.  In such event, the prosecuting Party shall
permit the non-prosecuting Party, at its discretion and expense, to continue
prosecution or maintenance of such Joint Patent in such country and the
non-prosecuting Party shall cease to have any right to enforce such Joint Patent
against infringement.  

(d)Unilateral BMS Pipeline Patents. With respect to the Unilateral BMS Pipeline
Patents, the Parties shall have the same patent filing, prosecution and
maintenance rights as are set forth in Section 8.3(a) with respect to
Product-Specific Patents.

(e)Other Patents.  As between the Parties, BMS shall be responsible for filing,
prosecuting and maintaining the BMS Patents, including all Collaboration Patents
solely owned by BMS that are not Product-Specific Patents, at its own cost and
expense.  As between the Parties, Five Prime shall be responsible for filing,
prosecuting and maintaining all Five Prime Pipeline Patents, Patents included in
the Five Prime Platform Technology, Unilateral Patents (unless and until such
Unilateral Patents become Five Prime Licensed Patents, in which case the terms
of Section 8.3(a) or 8.3(b) above shall govern, or are Unilateral BMS Pipeline
Patents, in which case the terms of Section 8.3(d) shall govern), and
Collaboration Patents solely owned by Five Prime that are not Product-Specific
Patents, in each case at Five Prime’s own cost and expense.  

(f)Collaboration.  When a Party assumes the responsibilities for the prosecution
and maintenance of a Patent under Section 8.3(a)(ii), 8.3(b)(iii) or 8.3(c)(ii),
the other Party shall promptly transfer to such Party the patent prosecution
files for such Patent and provide reasonable assistance in the transfer of the
prosecution responsibilities.  The Party assuming such prosecution and
maintenance responsibilities shall have the right to engage its own counsel to
do so.    

8.4Patent Enforcement.

(a)Product Infringement.

(i)Each Party shall notify the other within *** of becoming aware of any alleged
or threatened infringement by a Third Party of any Five Prime Licensed Patent or
BMS Patent through the manufacture, use, offer for sale, sale or importation of
a Licensed Product or other product containing a CSF1R Antibody or such Party’s
receipt of any notice under 42 U.S.C. 262(l) (however such section may be
amended from time to time during the Term) with respect to a Licensed Product
(collectively, “Product Infringement”).

(ii)BMS shall have the first right to bring and control any legal action in
connection with the enforcement of Five Prime Licensed Patents and/or BMS
Patents in any Product Infringement at its own expense as it reasonably
determines appropriate, and Five Prime shall have the right to be represented in
any such action by counsel of its choice.  If BMS decides not to bring such
legal action or to stop pursuing such legal action, it shall so notify Five
Prime

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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promptly in writing and Five Prime shall have the right to bring and control any
legal action in connection with such Product Infringement at its own expense as
it reasonably determines appropriate after consultation with BMS.  

(iii)In the event of any alleged or threatened infringement by a Third Party of
a Five Prime Pipeline Patent through the development, use, offer for sale or
sale of the applicable Five Prime Pipeline Asset for use together with a
Licensed Product or other product containing a CSF1R Antibody and such Third
Party is also engaged in Product Infringement, then the Parties will confer in
good faith as to how to address such infringement and Product Infringement. For
clarity, Five Prime retains all rights to enforce the Five Prime Pipeline
Patents with respect to any and all infringements and Five Prime does not have
any obligations to BMS with respect thereto other than the obligation to confer
with BMS in good faith as specified in the preceding sentence.

(iv)Five Prime shall have the exclusive right to enforce the Five Prime Licensed
Patents for any infringement that is not a Product Infringement at its own
expense as it reasonably determines appropriate, after reasonable consultation
with BMS.  BMS shall have the exclusive right to enforce the BMS Patents for any
infringement that is not a Product Infringement at its own expense as it
reasonably determines appropriate.  

(v)At the request and expense of the Party bringing the action, the other Party
shall provide reasonable assistance in connection therewith, including by
executing reasonably appropriate documents, cooperating in discovery and joining
as a party to the action if required.  

(vi)In connection with any such proceeding, the Party bringing the action shall
not enter into any settlement admitting the invalidity of, or otherwise
impairing the other Party’s rights in, the Five Prime Licensed Patents or BMS
Patents without the prior written consent of the other Party.  

(vii)Any recoveries resulting from enforcement action relating to a claim of
Product Infringement shall be first applied against payment of each Party’s
costs and expenses in connection therewith.  Any such recoveries in excess of
such costs and expenses (the “Remainder”) shall be shared by the Parties as
follows: *** of such Remainder shall be retained by (or if received by the other
Party, paid to) the Party bringing such action, and *** of such Remainder shall
be paid to the other Party.  

(b)Joint Patents that are not Product-Specific Patents or Five Prime Licensed
Patents.

(i)Each Party shall notify the other within *** of becoming aware of any alleged
or threatened infringement by a Third Party of any Joint Patent that is not a
Product-Specific Patent or a Five Prime Licensed Patent (collectively, “Joint
Patent Infringement”).

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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(ii)BMS shall have the first right to bring and control any legal action in
connection with any Joint Patent Infringement at its own expense as it
reasonably determines appropriate, and to join Five Prime as a party plaintiff;
provided that at Five Prime’s discretion, Five Prime shall have the right to
join such action, in which case the Parties shall jointly enforce such Joint
Patent, using the same counsel as agreed by the Parties or separate counsel
reasonably acceptable to the other Party.  All decisions in such jointly
enforced suit shall be made jointly.

(iii)If BMS is the sole enforcing Party, Five Prime shall cooperate with BMS in
any such suit as reasonably requested by BMS and at BMS’s expense and shall have
the right to consult with BMS and to participate in and, if appropriate, be
represented by independent counsel in such litigation at its own expense.  BMS
shall not, without Five Prime’s prior written consent, enter into any settlement
or consent decree that requires any payment by or admits or imparts any other
liability to Five Prime or admits the invalidity or unenforceability of any such
Joint Patents, which consent shall not be unreasonably withheld. If BMS has not
taken steps to obtain a discontinuance of such Joint Patent Infringement or
filed suit against any such Third Party infringer of such Joint Patents within
*** from the date of notice of the Joint Patent Infringement, then Five Prime
shall have the right to take action against such Third Party infringer.  BMS
shall cooperate with Five Prime in any such suit for Joint Patent Infringement
(including joining as a party plaintiff) at Five Prime’s request and expense,
and shall have the right to consult with Five Prime and to participate in and be
represented by independent counsel in such litigation at its own expense.  Five
Prime shall not, without BMS’s prior written consent, which consent shall not be
unreasonably withheld, enter into any settlement or consent decree that requires
any payment by or admits or imparts any other liability to BMS or admits the
invalidity or unenforceability of any such Joint Patents. The enforcing Party
under this Section 8.4(b) shall keep the other Party reasonably informed of all
material developments in connection with any such suit.

(iv)If the Parties are jointly enforcing Joint Patents under this
Section 8.4(b), then the Parties shall share equally all expenses incurred in
connection with such activities.  If one Party is enforcing such Joint Patents,
such Party shall be solely responsible for all expenses incurred in connection
with such activities by both Parties.

(v)Any recoveries obtained by either Party as a result of any proceeding against
a Third Party Infringer under this Section 8.4(b) shall be allocated as follows:

(1)If the Parties are jointly enforcing the applicable Joint Patents, then such
recovery shall first be used to reimburse the Parties for all out-of-pocket
litigation costs in connection with such litigation paid by the Parties, so that
each Party bears the same amount of such costs (if the recoveries are
insufficient to reimburse all costs), and any remaining portion of such
recoveries shall be shared equally.

(2)If one Party is the enforcing Party, such recovery shall first be used to
reimburse the enforcing Party for all out-of-pocket litigation costs in
connection with

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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such litigation paid by that Party, and then to reimburse out-of-pocket
litigation costs paid by the other Party, and with respect to any remaining
portion of such recoveries:

(a)If BMS is the enforcing Party, Five Prime shall receive an amount equal to
*** of such amount, and BMS shall receive any remaining portion of such
recovery; and

(b)If Five Prime is the enforcing Party, BMS shall receive an amount equal to
*** of such amount, and Five Prime shall receive any remaining portion of such
recovery.

8.5Defense Against Claims of Infringement of Third Party Patents.  If a Third
Party asserts that a Patent or other right owned or otherwise controlled by it
is or has been infringed by the manufacture, use, sale, offer for sale or import
of a Licensed Antibody, Licensed Product, or the CSF1R Target, the Party first
obtaining knowledge of such a claim shall promptly provide the other Party
written notice of such claim along with the related facts in reasonable
detail.  In such event, unless either Party has an indemnification obligation
pursuant to Article 12 or the Parties otherwise agree, as between the Parties
BMS shall have the first right, but not the obligation, at its expense, to
control the defense of such claim.  If BMS does not wish to defend such claim,
or wishes to cease defending such claim, and it is not obligated to indemnify
Five Prime with respect to such claim pursuant to Section 12.2, it shall notify
Five Prime of such decision at least *** before any deadline for any action or
filing that is required in order to preserve any rights.  Thereafter, Five Prime
shall have the right, but not the obligation, at its expense, to control the
defense of such claim.  Each Party shall cooperate with the defending Party, at
the defending Party’s reasonable request and expense, and shall have the right
to be represented separately by counsel of its own choice, but at its own
expense.  The defending Party shall also control settlement of such claim;
provided, however, that no settlement shall be entered into without the prior
consent of the other Party if such settlement would adversely affect the rights
and benefits of, or impose or adversely affect any obligations on, the other
Party, such consent not to be unreasonably withheld, delayed or conditioned.  In
the event of any conflict between the terms and conditions of this Section 8.5
and terms and conditions of Article 12, the terms and conditions of Article 12
shall prevail.

8.6Trademarks.  

(a)BMS shall have the right to brand the Licensed Products using BMS related
trademarks and any other trademarks and corporate/trade names it determines in
its sole discretion are appropriate to use in connection with the Licensed
Products, which may vary by country or within a country (“Product Marks”);
provided, however, that BMS shall provide Five Prime with a reasonable
opportunity to review and provide comments on each proposed Product Mark, and
BMS shall give due consideration to Five Prime’s comments before selecting any
Product Mark.  BMS shall own all rights in the Product Marks and shall register
and maintain the

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Product Marks in the countries and regions that it determines reasonably
necessary, at BMS’s cost and expense.  

(b)Neither Party shall, without the other Party’s prior written consent, use any
trademarks or other marks of the other Party (including the other Party’s
corporate name), trademarks, advertising taglines or slogans confusingly similar
thereto, in connection with such Party’s marketing or promotion of Licensed
Products under this Agreement or for any other purpose related to this
Agreement, except (i) in connection with Five Prime’s Co-Promotion activities as
contemplated in Section 6.5, (ii) as may be expressly authorized in writing in
connection with activities under this Agreement, (iii) to the extent permitted
by Applicable Laws, BMS shall note on all packaging, labeling and promotional
materials for Licensed Products that the Licensed Products are being sold under
a license from Five Prime, (iv) to the extent required to comply with Applicable
Laws and (v) as permitted in Section 9.6(b).

(c)Each Party shall, upon the reasonable request and expense of the other Party,
provide such assistance and execute such documents as are reasonably necessary
for such Party to exercise its rights and/or perform its obligations pursuant to
this Section 8.6; provided, however, that neither Party shall be required to
take any action pursuant to Section 8.6 that such Party reasonably determines in
its sole judgment and discretion conflicts with or violates any applicable court
or government order or decree or Applicable Laws.

8.7Patent Term Extension. Five Prime and BMS shall each cooperate with each
another and shall use commercially reasonable efforts to obtain patent term
extension (including any pediatric exclusivity extensions as may be available)
or supplemental protection certificates or their equivalents in any country with
respect to Patents covering the Licensed Products. If elections with respect to
obtaining such patent term extensions are to be made, Five Prime and BMS shall
discuss and make reasonable efforts to agree upon such elections; provided that
BMS shall have final decision-making authority with respect any such elections
to seek patent term extension or supplemental protection, provided that each
such election shall be made so as to maximize the period of marketing
exclusivity for the Licensed Product.  If BMS elects to extend a BMS patent in
lieu of a Five Prime Licensed Patent or Collaboration Patent, then the Royalty
Term set forth in Section 7.3(b) shall be extended for the period of time that
the relevant Five Prime Licensed Patent or Collaboration Patent would have been
extended had BMS elected to extend such Five Prime Licensed Patent or
Collaboration Patent.

8.8Joint Research Agreement. This Agreement shall be understood to be a joint
research agreement in accordance with 35 U.S.C. §102(c) for inventions arising
under its scope.

Article 9

CONFIDENTIALITY; PUBLICATION

9.1Duty of Confidence.  Subject to the other provisions of this Article 9:

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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(a)Except to the extent expressly authorized by this Agreement, all Confidential
Information of a Party (the “Disclosing Party”) shall be maintained in
confidence and otherwise safeguarded, and not published or otherwise disclosed,
by the other Party (the “Receiving Party”) and its Affiliates for the Term and
*** thereafter;

(b)the Receiving Party may only use any Confidential Information of the
Disclosing Party for the purposes of performing its obligations or exercising
its rights under this Agreement, provided that the foregoing shall not be
interpreted as permitting BMS or its Affiliates to use or disclose any
Confidential Information of Five Prime with respect to the research, development
or commercialization of any known CSF1R antagonist molecule (including
Antibodies, peptides and chemical compounds) that is not a Licensed Antibody,
whether during or after the Restricted Period; and

(c)a Receiving Party may disclose Confidential Information of the Disclosing
Party to: (i) such Receiving Party’s Affiliates and sublicensees; and (ii)
employees, directors, agents, contractors, consultants and advisers of the
Receiving Party and its Affiliates and sublicensees, in each case to the extent
reasonably necessary for the purposes of, and for those matters undertaken
pursuant to, this Agreement; provided that such Persons are bound by legally
enforceable obligations to maintain the confidentiality of the Disclosing
Party’s Confidential Information in a manner consistent with the confidentiality
provisions of this Agreement; provided that each Party shall remain responsible
for any failure by its Affiliates, licensees and sublicensees, and its and its
Affiliates’ and licensees’ and sublicensees’ respective employees, directors,
agents, consultants, advisors, and contractors, to treat such Confidential
Information as required under this Section 9.1 (as if such Affiliates,
licensees, sublicensees employees, directors, agents, consultants, advisors and
contractors were Parties directly bound to the requirements of this Section
9.1).  

9.2Exceptions.  The foregoing obligations as to particular Confidential
Information of a Disclosing Party shall not apply to the extent that the
Receiving Party can demonstrate through competent evidence that such
Confidential Information:

(a)is known by the Receiving Party or any of its Affiliates at the time of its
receipt without an obligation of confidentiality, and not through a prior
disclosure by or on behalf of the Disclosing Party, as documented by the
Receiving Party’s business records;

(b)is in the public domain before its receipt from the Disclosing Party;

(c)became generally available to the public or otherwise part of the public
domain after its disclosure and other than through any act or omission of the
Receiving Party or any of its Affiliates or disclosees in breach of this
Agreement;

(d)is subsequently disclosed to the Receiving Party or any of its Affiliates
without obligation of confidentiality by a Third Party who may rightfully do so
and is not under an obligation of confidentiality to the Disclosing Party; or

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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(e)is developed by the Receiving Party or any of its Affiliates independently
and without use of or reference to any Confidential Information received from
the Disclosing Party, as documented by the Receiving Party’s business records.

No combination of features or disclosures shall be deemed to fall within the
foregoing exclusions merely because individual features are published or
available to the general public or in the rightful possession of the Receiving
Party, unless the combination itself and principle of operation are published or
available to the general public or in the rightful possession of the Receiving
Party.

9.3Authorized Disclosures.  Notwithstanding the obligations set forth in
Sections 9.1 and 9.5, a Party may disclose the other Party’s Confidential
Information (including this Agreement and the terms herein) to the extent such
disclosure is reasonably necessary in the following situations:

(a)(i) filing or prosecuting Five Prime Licensed Patents, Five Prime Pipeline
Patents or Collaboration Patents as contemplated by this Agreement; (ii)
regulatory filings and other filings with Governmental Authorities (including
Regulatory Authorities), as necessary for the Development or Commercialization
of a Licensed Product; (iii) prosecuting or defending litigation or arbitration
as contemplated by Sections 12.1-12.5 (Indemnification) or Section 13.6 (Dispute
Resolution); or (iv) subject to Section 9.6, complying with Applicable Laws,
including regulations promulgated by securities exchanges;

(b)disclosure to a Party’s Affiliates, directors, employees, agents, independent
contractors, licensors, attorneys, independent accountants or financial advisors
on a need-to-know basis for the sole purpose of performance of this Agreement or
providing advice with respect to this Agreement; provided, that in each such
case on the condition that such disclosee is bound by confidentiality and
non-use obligations substantially consistent with those contained in this
Agreement or customary for such type and scope of disclosure;

(c)disclosure of this Agreement, its terms and the status and results of
Development or Commercialization activities to actual or bona fide potential
investors, acquirors, (sub)licensees and other financial or commercial partners
solely for the purpose of evaluating or carrying out an actual or potential
investment, acquisition or collaboration; provided, that in each such case on
the condition that such Persons are bound by confidentiality and non-use
obligations customary for such type and scope of disclosure;

(d)such disclosure is required by judicial or administrative process, provided
that in such event such Party shall promptly notify the other Party in writing
of such required disclosure and provide the other Party an opportunity to
challenge or limit the disclosure obligations.  Confidential Information that is
disclosed by judicial or administrative process shall remain otherwise subject
to the confidentiality and non-use provisions of this Article 9, and the Party
disclosing Confidential Information pursuant to Applicable Laws or court order
shall take

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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all steps reasonably necessary, including seeking of confidential treatment or a
protective order, to ensure the continued confidential treatment of such
Confidential Information; and

(e)disclosure pursuant to Section 9.5 and 9.6.

Notwithstanding the foregoing, in the event a Party is required or permitted to
make a disclosure of the other Party’s Confidential Information pursuant to
Sections 9.3(a)(i), 9.3(a)(iii) or 9.3(a)(iv), it will, except where
impracticable, give reasonable advance notice to the other Party of such
disclosure and use reasonable efforts to secure confidential treatment of such
information.  In any event, each Party agrees to take all reasonable action to
avoid disclosure of Confidential Information of the other Party hereunder.

Nothing in Sections 9.1 or 9.3 shall limit either Party in any way from
disclosing to any Third Party such Party’s U.S. or foreign income tax treatment
and the U.S. or foreign income tax structure of the transactions relating to
such Party that are based on or derived from this Agreement, as well as all
materials of any kind (including opinions or other tax analyses) relating to
such tax treatment or tax structure, except to the extent that nondisclosure of
such matters is reasonably necessary in order to comply with applicable
securities laws.

9.4Publications. Neither Party shall publicly present or publish results of
studies carried out under this Agreement (each such presentation or publication,
a “Publication”) without providing written notice of, a copy of such proposed
Publication, and the opportunity for prior review to the other Party as set
forth in this Section 9.4, except to the extent otherwise required by Applicable
Laws, in which case Section 9.6 shall apply with respect to disclosures required
by the SEC or other Governmental Authorities or stock exchanges and/or for
regulatory filings.  The submitting Party shall provide the other Party the
opportunity to review any proposed Publication at least *** prior to the earlier
of its presentation or intended submission for publication; provided, that in
the case of abstracts, this period shall be *** and in the case of posters and
oral presentations, *** (such applicable period, the “Review Period”).  The
submitting Party agrees that it will not submit or present any Publication until
(i) the other Party has provided written comments, during such Review Period, on
the material in such Publication or (ii) until the applicable Review Period has
elapsed without written comments from the other Party, in which case the
submitting Party may proceed and the Publication will be considered approved in
its entirety.  If the submitting Party receives written comments from the other
Party during the applicable Review Period, it shall consider the comments of the
other Party in good faith, but will retain the sole authority to submit the
manuscript for Publication; provided, that the submitting Party agrees to (i)
delete any Confidential Information of the other Party that is specifically
identified for deletion in such other Party’s written comments during the Review
Period, and which the submitting Party does not otherwise have the right to
rightfully disclose, and (ii) to delay such Publication for a period of up to an
additional *** after the end of the applicable Review Period to enable the other
Party to draft and file a Patent with respect to any subject matter to be made
public in such Publication and to which the other Party has the applicable
intellectual property rights to file such Patent.  The submitting Party shall
provide the

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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other Party a copy of the Publication at the time of the submission or
presentation.  Each Party agrees to acknowledge the contributions of the other
Party, and the employees of the other Party, in all publications as
scientifically appropriate.  This Section 9.4 shall not limit, and shall be
subject to, Section 9.5.

Nothing contained in this Section 9.4 shall prohibit the inclusion of
information in a patent application that is contemplated by the provisions of
Article 8 of this Agreement, claiming, and in furtherance of, the manufacture,
use, sale or formulation of a Licensed Antibody, provided, that the non-filing
Party is given a reasonable opportunity to review, comment upon and/or approve
the information to be included prior to submission of such patent application,
where and to the extent required by Article 8 hereof, and further provided, that
the foregoing shall not permit a Party to include in a patent application
Confidential Information of the other Party that such other Party desires to
maintain in confidence unless such including Party determined (i) such other
Party’s Confidential Information is reasonably necessary in such patent
application and (ii) relates solely to the relevant Licensed Antibody for the
patent application.  Notwithstanding the foregoing, the Parties recognize that
independent investigators have been engaged, and will be engaged in the future,
to conduct Clinical Trials of Licensed Products.  The Parties recognize that
such investigators operate in an academic environment and may release
information regarding such studies in a manner consistent with academic
standards; provided that each Party will use commercially reasonable efforts to
prevent publication prior to the filing of relevant patent applications and to
ensure that no Confidential Information of either Party is disclosed.

9.5Publication and Listing of Clinical Trials and Compliance with other
Policies, Orders and Agreements.  Each Party agrees to comply, with respect to
the Licensed Antibodies and Licensed Products and to the extent applicable to
its activities conducted under this Agreement, with (a) the Pharmaceutical
Research and Manufacturers of America (PhRMA) Guidelines on the listing of
Clinical Trials and the Publication of Clinical Trial results, (b) any
applicable court order, stipulations, consent agreements and settlements entered
into by such Party, and (c) BMS’s Research and Development policy (a current
version of which has been provided to Five Prime in writing as of the Effective
Date) concerning Clinical Trials Registration and Disclosure of Results as
amended from time to time and other BMS policies or other policies adopted by it
for the majority of its other pharmaceutical products with regard to the same
(to the extent the same either are not in direct conflict with the documents
referred to in clauses (a) and (b) above and, in the case of Five Prime, its
Affiliates and sublicensees, to the extent such policies (i) are provided by BMS
to Five Prime in writing prior to requiring their implementation under this
Agreement and (ii) are not in direct conflict with pre-existing obligations of
Five Prime, its Affiliates and sublicensees as of the date *** after such
written policies or their amended versions are received by Five Prime from BMS).
BMS will provide all new policies or amended policies under this Section 9.5 to
Five Prime within *** after their first implementation or adoption by BMS.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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9.6Publicity; Use of Names.  

(a)The Parties agree that the material terms of this Agreement are the
Confidential Information of both Parties, subject to the special authorized
disclosure provisions set forth in Section 9.3 and this Section 9.6.  The
Parties have agreed on language of a joint press release announcing this
Agreement, which is attached hereto as Exhibit G, to be issued by the Parties on
such date and time as may be agreed by the Parties.  No other disclosure of the
existence or the terms of this Agreement may be made by either Party or its
Affiliates except as provided in Section 9.3 and this Section 9.6.  Five Prime
shall not use the name, trademark, trade name or logo of BMS, its Affiliates or
their respective employees in any publicity, promotion, news release or
disclosure relating to this Agreement or its subject matter, except as provided
in this Section 9.6 or with the prior express written permission of BMS, except
as may be required by Applicable Laws.  BMS will use Five Prime’s corporate name
in all publicity relating to this Agreement, including the initial press release
and all subsequent press releases, and disclosures of key results and clinical
data from each Clinical Trial conducted under the Development Plan as set forth
in Section 9.6(b), and accompanied explanatory text such as “Licensed from Five
Prime Therapeutics, Inc.”; provided, that BMS will use Five Prime’s corporate
name only in such manner that the distinctiveness, reputation, and validity of
any trademarks and corporate/trade names of Five Prime shall not be impaired,
and consistent with best practices used by BMS for its other collaborators.

(b)Notwithstanding Section 9.6(a), the Parties have the following express rights
to make public disclosures regarding the existence and term of this Agreement:
(i) Five Prime has the right to publicly disclose (A) the achievement of
milestones under this Agreement by either Party; (B) the amount of related
milestone payments; and (C) the commencement, completion, material data and key
results of Clinical Trials conducted under the Development Plan by either Party,
or outside of the Development Plan by Five Prime and (ii) BMS has the right to
publicly present and disclose, and will use Commercially Reasonable Efforts to
present and disclose, key results and clinical data from each Clinical Trial
conducted under the Development Plan, in a manner consistent with BMS’s
treatment of similarly situated products.  After a Publication has been made
available to the public, each Party may post such Publication or a link to it on
its corporate web site without the prior written consent of the other Party.

(c)A Party may disclose this Agreement in securities filings with the Securities
and Exchange Commission (the “SEC”) or equivalent foreign agency to the extent
required by Applicable Laws.  In such event, the Party seeking such disclosure
shall prepare a draft confidential treatment request and proposed redacted
version of this Agreement to request confidential treatment for this Agreement,
and the other Party agrees to promptly (and in any event, no more than *** after
receipt of such confidential treatment request and proposed redactions) give its
input in a reasonable manner in order to allow the Party seeking disclosure to
file its request within the time lines prescribed by Applicable Laws.  The Party
seeking such disclosure shall reasonably consider any comments thereto provided
by the other Party within such *** period.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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(d)Each Party acknowledges that the other Party may be legally required to make
public disclosures (including in filings with Governmental Authorities) of
certain terms of or material developments or material information generated
under this Agreement and agrees that each Party may make such disclosures as
required by Applicable Laws, provided that the Party seeking such disclosure (i)
receives advice from counsel that it is legally required to make such public
disclosure and (ii) if practicable and permitted by Applicable Laws, first
provides the other Party a copy of the proposed disclosure, and reasonably
considers any comments thereto provided by the other Party within *** after the
receipt of such proposed disclosure.  

(e)Other than the press release set forth in Exhibit G, and the public
disclosures permitted by Section 9.6(b), the Parties agree that the portions of
any other news release or other public announcement relating to this Agreement
or the performance hereunder, including the conduct or results of any Five Prime
Development Activities, that would disclose information other than that already
in the public domain, shall first be reviewed and approved by both Parties (with
such approval not to be unreasonably withheld or delayed), except as required by
Applicable Laws;

(f)The Parties agree that after a disclosure pursuant to Section 9.6(d) or
issuance of a press release (including the initial press release) or other
public announcement pursuant to Section 9.6(a) that has been reviewed and
approved by the other Party, the disclosing Party may make subsequent public
disclosures reiterating such information without having to obtain the other
Party’s prior consent and approval.

(g)Subject to BMS’s written consent, not to unreasonably withheld or delayed,
Five Prime shall have the right to use BMS’s name and logo in presentations, its
website, collateral materials and corporate overviews to describe the
collaboration relationship, as well as in taglines of press releases issued
pursuant to this Section 9.6.  BMS shall have the right to, and shall use Five
Prime’s name, in such manner; provided, that BMS will use Five Prime’s corporate
name only in such manner that the distinctiveness, reputation, and validity of
any trademarks and corporate/trade names of Five Prime shall not be impaired,
and consistent with best practices used by BMS for its other collaborators.

9.7Disclosure to Ono.  Notwithstanding any other provision of this Agreement,
Five Prime hereby expressly authorizes BMS to disclose to Ono, solely to the
extent necessary for BMS to fulfill its obligations to Ono under the Ono-BMS
Agreements, (i) the existence (but not the terms) of this Agreement and the
Development Plan and any Five Prime Development Activities and (ii) any Five
Prime Confidential Information or study data relating to the conduct of any
Clinical Trial; provided, in each case, that Ono is under confidentiality
obligations at least as restrictive as set forth herein.

9.8Attorney-Client Privilege.  Neither Party is waiving, nor shall be deemed to
have waived or diminished, any of its attorney work product protections,
attorney-client privileges or similar protections and privileges or the like as
a result of disclosing information pursuant to this

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Agreement, or any of its Confidential Information (including Confidential
Information related to pending or threatened litigation) to the Receiving Party,
regardless of whether the Disclosing Party has asserted, such privileges and
protections.  The Parties: (a) share a common legal and commercial interest in
such disclosure that is subject to such privileges and protections; (b) are or
may become joint defendants in proceedings to which the information covered by
such protections and privileges relates; (c) intend that such privileges and
protections remain intact should either Party become subject to any actual or
threatened proceeding to which the Disclosing Party’s Confidential Information
covered by such protections and privileges relates; and (d) intend that after
the Execution Date both the Receiving Party and the Disclosing Party shall have
the right to assert such protections and privileges. Notwithstanding the
foregoing, nothing in this Section 9.8 shall apply with respect to a dispute
between the Parties (including their respective Affiliates).

Article 10

TERM AND TERMINATION

10.1Term.  The term of this Agreement shall commence upon the Effective Date and
continue in full force and effect, on a Licensed Product-by-Licensed Product and
country-by-country basis, until the expiration of the payment obligations of BMS
under Article 7 in such country with respect to the applicable Licensed Product,
unless earlier terminated as set forth in Section 10.2 below (the “Term”).  

10.2Termination.

(a)Termination by BMS.  

(i)At Will.  BMS may terminate this Agreement for convenience in its entirety or
on a Region-by-Region basis with respect to all Licensed Products by providing
written notice of termination to Five Prime, which notice includes an effective
date of termination at least *** after the date of the notice; provided however,
that: (1) this Agreement will terminate in its entirety if BMS’s rights with
respect to any *** Regions are terminated (whether simultaneously or at
different times, and regardless which provision(s) of Section 10.2 are the basis
for such termination(s)); and (2) BMS shall continue to be responsible, for a
period of *** after the effective date of such termination, for all costs of
Clinical Trials under the Development Plan in or with respect to the terminated
Region(s) that were Commenced prior to the date of the notice of termination.
Following any such notice of termination under this Section 10.2(a)(i), no
milestone payments under Section 7.2 will be due on milestones achieved during
the period between the notice of termination and the effective date of
termination.  As used herein, “Region” means each of: (A) the United States; (B)
the Major European Countries; (C) Japan; and (D) the world other than the United
States, the Major European Countries and Japan; and “Commenced” means, with
respect to a Clinical Trial, that (x) the first dosing of a human

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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subject in such Clinical Trial has occurred or (y) a written agreement for the
conduct of such Clinical Trial has been executed by BMS or its Affiliate or
sublicensee.

(ii)Termination by BMS for Safety Reasons.  BMS may terminate this Agreement in
its entirety (or on a Licensed Product-by-Licensed Product basis) upon written
notice to Five Prime based on Safety Reasons, which determination shall not be
subject to arbitration or any other dispute resolution process hereunder, except
with respect to the question of whether such decision was made by BMS in good
faith.  Upon such termination for Safety Reasons, BMS shall be responsible, at
its expense, for the wind-down of all Development of Licensed Products
(including all Clinical Trials being conducted by or on behalf of BMS or its
Affiliates or sublicensees) and all Commercialization activities for Licensed
Products.  Such termination shall become effective upon the date that BMS
notifies Five Prime in writing that such wind-down is complete.  Following any
such notice of termination under this Section 10.2(a)(ii), no milestone payments
under Section 7.2 will be due on milestones achieved for the terminated Licensed
Products with respect to the terminated countries, as applicable, during the
period between the notice of termination and the effective date of
termination.  

(b)Termination for Material Breach.  

(i)If either Party believes in good faith that the other is in material breach
of its obligations hereunder, then the non-breaching Party may deliver notice of
such breach to the other Party stating the cause and proposed remedy.  For all
breaches other than a failure to make a payment as set forth in this Agreement,
the allegedly breaching Party shall have *** from such notice to dispute or cure
such breach.  For any breach arising from a failure to make a payment set forth
in this Agreement, the allegedly breaching Party shall have *** from the receipt
of the notice to dispute or cure such breach.  If the Party receiving notice of
breach fails to cure, or fails to dispute, that breach within the applicable
period set forth above, then the Party originally delivering the notice of
breach may terminate this Agreement effective on written notice of termination
to the other Party.  If the allegedly breaching Party in good faith disputes
such material breach and provides written notice of that dispute to the other
Party within the applicable period set forth above, the matter shall be
addressed under the dispute resolution provisions in Section 13.6(b), and the
termination shall not become effective unless and until it has been determined
under Section 13.6(b) that the allegedly breaching Party is in material breach
of this Agreement.  It is understood and acknowledged that during the pendency
of such a dispute, all of the terms and conditions of this Agreement shall
remain in effect and the Parties shall continue to perform all of their
respective obligations hereunder.  Section 10.2(b)(i)  shall not apply to or
encompass a breach (or alleged breach) of BMS’s obligations pursuant to Section
4.1(b) or Section 6.2, which shall be governed solely by Section 10.2(b)(ii).

No milestone payments by BMS will be due under Section 7.2 on milestones
achieved during the period between the notice of termination under this Section
10.2(b)(i) and the effective date of termination; provided, however, if the
allegedly breaching Party provides notice of a dispute pursuant to Section
10.2(b)(i)  and such dispute is resolved in a manner in which no termination

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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of this Agreement occurs, then upon such resolution BMS will promptly pay to
Five Prime the applicable milestone payment for each milestone achieved during
the period between the notice of termination under this Section 10.2(b)(i) and
the resolution of such dispute.

(ii)(1)Subject to the provisions of this Section 10.2(b)(ii), Five Prime shall
have the right to terminate this Agreement in its entirety if BMS is in material
breach of its obligations pursuant to Section 4.1(b) and Five Prime shall have
the right to terminate this Agreement on a Region-by-Region basis with respect
to all Licensed Products in such Region if BMS is in material breach of its
obligations pursuant to Section 6.2 with respect to such Region; provided,
however, this Agreement shall not so terminate unless (A) Five Prime provides
BMS with written notice of Five Prime’ intent to terminate, stating the reasons
and justification for such termination and recommending steps which Five Prime
believes BMS should take to cure such alleged breach, and (B) BMS, or its
Affiliates or sublicensee, has not (1) during the *** period following such
notice, provided Five Prime with a plan for curing such breach and (2) during
the *** period following such notice carried out such plan and cured such
alleged breach.

(2)If BMS disputes in good faith the existence or materiality of an alleged
breach specified in a notice provided by Five Prime pursuant to Section
10.2(b)(ii)(1), and if BMS provides notice to Five Prime of such dispute within
the *** following such notice provided by Five Prime, Five Prime shall not have
the right to terminate this Agreement unless and until the existence of such
material breach or failure by BMS has been determined in accordance with Section
13.6(b) and BMS fails to cure such breach within *** following such
determination.  Except as set forth in Section 10.2(b)(ii)(3), it is understood
and acknowledged that during the pendency of such a dispute, all of the terms
and conditions of this Agreement shall remain in effect and the Parties shall
continue to perform all of their respective obligations hereunder.  

(3)No milestone payments by BMS will be due under Section 7.2 on milestones
achieved, with respect to the applicable Major Markets for which termination is
sought if termination is being sought under Section 10.2(b)(ii)(1), during the
period between the notice of termination under Section 10.2(b)(ii)(1) and the
effective date of termination; provided, however, if BMS provides notice of a
dispute pursuant to Section 10.2(b)(ii)(2) and such dispute is resolved in a
manner in which no termination of this Agreement with respect to such
country(ies) occurs, then upon such resolution BMS will promptly pay to Five
Prime the applicable milestone payment for each milestone achieved during the
period between the notice of termination under this Section 10.2(b)(ii)(1) and
the resolution of such dispute.

(c)Termination by Either Party for Insolvency.  A Party shall have the right to
terminate this Agreement upon written notice to the other Party if the other
Party incurs an Insolvency Event; provided, however, in the case of any
involuntary bankruptcy proceeding, such right to terminate shall only become
effective if the Party that incurs the Insolvency Event consents to the
involuntary bankruptcy or if such proceeding is not dismissed or stayed within
*** after the filing thereof.  “Insolvency Event” means circumstances under
which a Party (i)

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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has a receiver or similar officer appointed over all or a material part of its
assets or business; (ii) passes a resolution for winding-up of all or a material
part of its assets or business (other than a winding-up for the purpose of, or
in connection with, any solvent amalgamation or reconstruction) or a court
enters an order to that effect; (iii) has entered against it an order for relief
recognizing it as a debtor under any insolvency or bankruptcy laws (or any
equivalent order in any jurisdiction); or (iv) enters into any composition or
arrangement with its creditors with respect to all or a material part of its
assets or business (other than relating to a solvent restructuring).

10.3Effect of Termination by BMS under Section 10.2(a) or by Five Prime under
Section 10.2(b) or 10.2(c).  Upon the (i) termination of this Agreement by BMS
under Section 10.2(a)(i) or by Five Prime under Section 10.2(b) or 10.2(c), the
following shall apply to such terminated Licensed Antibody(s)/Licensed
Product(s) and to the terminated Region(s) (in addition to any other rights and
obligations under this Agreement with respect to such termination) and (ii)
termination of this Agreement by BMS under Section 10.2(a)(ii), the following
shall apply with respect to all Non-Exempted Indications for such terminated
Licensed Antibody(s)/Licensed Product(s) (in addition to any other rights and
obligations under this Agreement with respect to such termination):

(a)Licenses.  The licenses granted to BMS in Section 3.1 (and all sublicenses
granted thereunder by BMS, including to Ono if the Other Region is terminated)
shall terminate solely with respect to the Region(s) in which the termination
becomes effective.  BMS shall grant to Five Prime an exclusive, royalty-bearing
(as set forth in Section 10.3(h)) license, with the right to sublicense, to
develop, make and have made (in the form and as manufactured as of the date of
termination), use, sell, offer for sale, export and import the Licensed
Antibodies and Licensed Products in the terminated Regions under all
Collaboration Intellectual Property owned by BMS and under all other Patents and
Know-How Controlled by BMS and its Affiliates that, at the time of such
termination, are then, had been or were contemplated to be practiced or used by
BMS to Develop, make, have made, use, sell, offer for sale and import any
Licensed Antibody or Licensed Product, provided that Five Prime shall be able to
develop, make and have made Licensed Antibodies and Licensed Products outside of
the terminated Regions solely for the purpose of sale within the terminated
Regions.  To the extent such obligations existed prior to such termination, BMS
shall not have any Commercially Reasonable Efforts obligations thereafter with
respect to the Development and Commercialization of Licensed Antibodies and
Licensed Products in the terminated Region(s).  

(b)Inventory.  At Five Prime’s election and request, BMS shall transfer to Five
Prime or its designee some or all inventory of Licensed Antibodies and Licensed
Products (including all final product, bulk drug substance, intermediates,
works-in-process, formulation materials, reference standards, drug product
clinical reserve samples, packaged retention samples, and the like) then in the
possession or control of BMS, its Affiliates or sublicensees; provided that Five
Prime shall pay BMS a price equal to BMS’s fully burdened cost of goods of such
transferred Licensed Antibodies and Licensed Products.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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(c)Patent Prosecution and Enforcement.  

(i)Five Prime shall have the first right, but not any obligation, to file,
prosecute and maintain, at Five Prime’s sole expense, the Patents that are
exclusively licensed to Five Prime under Section 10.3(a).  The foregoing right
of Five Prime shall include the right to perform all actions of a reference
product sponsor set forth in 42 USC 262(l). Five Prime shall keep BMS reasonably
informed of the status of such prosecution and shall promptly provide BMS with
copies of material correspondence received from or filed with any patent
authorities in connection therewith.  Five Prime shall notify BMS in writing of
any decision not to file, or to cease prosecution and/or maintenance, in any
country, Patents that are exclusively licensed to Five Prime under Section
10.3(a).  Five Prime shall provide such notice at least *** prior to any filing
or payment due date, or any other due date that requires action in order to
avoid loss of rights, in connection with such Patent.  In such event, Five Prime
shall permit BMS, at its discretion and expense, to continue prosecution or
maintenance of such Patent in such country. BMS’s prosecution or maintenance of
such Five Prime Prosecuted Patent shall not change the Parties’ respective
rights and obligations under this Agreement with respect to such Five Prime
Prosecuted Patent other than those expressly set forth in this Section
10.3(c)(i).

(ii)Five Prime shall have the first right, but not any obligation, to enforce
the Patents that are exclusively licensed to Five Prime under Section 10.3(a)
against any infringement through the manufacture, use, offer for sale, sale or
importation of Licensed Products (including as part of a Five Prime Combination
Therapy) and to retain all recoveries resulting from such enforcement action. At
the request and expense of Five Prime, BMS shall provide reasonable assistance
in connection with such enforcement, including by executing reasonably
appropriate documents, cooperating in discovery and joining as a party to the
action if required.

(d)Regulatory Materials.  Upon Five Prime’s written request, BMS shall provide
Five Prime with copies of all Regulatory Materials for Licensed Products for
such terminated Region.  BMS shall either assign to Five Prime or provide Five
Prime with a right of reference with respect to such Regulatory Materials, as
BMS determines at its reasonable discretion.  In addition, upon Five Prime’s
written request, BMS shall provide to Five Prime copies of all material related
documentation, including material non-clinical, preclinical and clinical data
that are held by or reasonably available to BMS, its Affiliates or
sublicensees.  The Parties shall discuss and establish appropriate arrangements
with respect to safety data exchange, provided that Five Prime will assume all
safety and safety database activities no later than *** after
termination.    Five Prime shall reimburse BMS for all out-of-pocket costs and
FTEs (at the then-current FTE Rate) incurred by BMS pursuant to this Section
10.3(d).  

(e)Trademarks.  BMS shall transfer and assign, and shall ensure that its
Affiliates transfer and assign, to Five Prime, at no cost to Five Prime, all
Product Marks relating to any Licensed Product and any applications therefor
(excluding any such marks that include, in whole or part, any corporate name or
logos of BMS or its Affiliates or sublicensees) with respect

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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to any terminated Region.  Five Prime and its Affiliates and licensees shall
have the right to use other identifiers specific to any Licensed Product (e.g.,
BMS compound identifiers).  BMS shall also transfer to Five Prime any in-process
applications for generic names for any Licensed Product.

(f)Return of Confidential Information.  At Five Prime’s election, BMS shall
return (at Five Prime’s expense) or destroy, all Tangible Materials and all
tangible items comprising, bearing or containing any Confidential Information of
Five Prime that are in BMS’s or its Affiliates’ or sublicensees’ possession or
control, and provide written certification of such destruction; provided that
BMS may retain one copy of such Confidential Information for its legal archives,
and provided further that BMS shall not be required to destroy electronic files
containing Confidential Information that are made in the ordinary course of its
business information back-up procedures pursuant to its electronic record
retention and destruction practices that apply to its own general electronic
files and information.

(g)Transition Assistance.  BMS agrees to cooperate with Five Prime and its
designee(s), at Five Prime’s expense, to facilitate an orderly and prompt
transition of the Development (and as applicable, Commercialization) activities
relating to Licensed Antibodies or Licensed Product(s) in the terminated
Region(s) to Five Prime and/or its designee(s) following such
termination.  Without limiting the foregoing, at Five Prime’s request, BMS
shall: (i) manufacture and supply Five Prime with Licensed Antibody and/or
Licensed Product (paid by Five Prime at BMS’s fully burdened cost of goods)
until the earlier of (x) *** after such termination or (y) Five Prime is able to
source the same materials itself or through a Third Party manufacturer; and/or
(ii) to the extent assignable and if requested by Five Prime, assign to Five
Prime any manufacturing agreement between BMS and a Third Party contract
manufacturer with respect to such Licensed Antibody and/or Licensed Product.

(h)Royalty to BMS.  Unless this Agreement was terminated by Five Prime pursuant
to Section 10.2(b) or by BMS under Section 10.2(a)(ii) (in which case no royalty
shall be owed by Five Prime with respect to the Exempted Indication, but the
royalty set forth in this Section 10.3(h) would be owed on the applicable
Non-Exempted Indications that meet the requirements below), Five Prime shall pay
BMS a royalty rate to be agreed by the Parties on net sales of Licensed Products
in the applicable terminated Region by Five Prime or Five Prime’s Affiliates,
licensees or sublicensees, as follows:

Highest phase of development, regulatory filing or approval completed by BMS,
its Affiliates or Sublicensees

Royalty on Quarterly Net Sales of Licensed Product

Prior to the date *** after the Effective Date and prior to ***

***

After the date *** after the Effective Date and prior to ***

***

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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After *** but before ***

***

After ***

***

 

For purposes of this Section 10.3(h), “net sales” shall be calculated in the
same manner Net Sales are defined for sales made by BMS, substituting “Five
Prime, its Affiliates and (sub)licensees” for each reference to Seller in the
definition of “Net Sales”, and the provisions of Article 7 of this Agreement
shall apply to Five Prime (as royalty payor) and BMS (as royalty recipient) with
respect to such royalties in the same manner as such provisions had applied to a
Seller (as royalty payor) and Five Prime (as royalty recipient).  

(i)Clinical Trials.  If at the time of such termination, BMS or its Affiliates
are conducting any Clinical Trials for a Licensed Product in a terminated
Region, then, at Five Prime’s election on a trial-by-trial basis: (i) BMS shall
cooperate, and shall ensure that its Affiliates cooperate, with Five Prime to
transfer the conduct of all such Clinical Trials to Five Prime effective as of
*** after the termination effective date, and Five Prime shall assume any and
all liability for the conduct of such transferred Clinical Trials after the
effective date of such transfer (except to the extent arising prior to the
transfer date or from any negligent act or omission by BMS, its Affiliates or
their respective employees, agents and contractors); or (ii) BMS shall, at its
expense, orderly wind-down the conduct of any such Clinical Trial which is not
assumed by Five Prime under clause (i) above.  

(j)No Exclusivity. Upon the effective date of the termination of this Agreement,
neither Party shall have any obligations under Section 3.5 or 3.6.

10.4Effects of Termination by BMS under Section 10.2(a)(ii).  Upon termination
of this Agreement by BMS under Section 10.2(a)(ii) the following shall apply
with respect to the terminated Licensed Antibodies/Licensed Products and
terminated countries (in addition to any other rights and obligations under this
Agreement (including pursuant to Section 10.3 with respect to the Non-Exempted
Indications) with respect to such termination).

(a)Licenses.  The licenses granted to BMS in Section 3.1 shall terminate upon
such effective date of termination, solely with respect to the Licensed
Antibodies/Licensed Products and countries in which the termination becomes
effective, and BMS, its Affiliates and sublicensees (including Ono) shall cease
all Development and Commercialization of such terminated Licensed
Antibodies/Licensed Products in such terminated countries.  The rights and
obligations of the Parties as to the remaining non-terminated Licensed
Antibodies/Licensed Products and countries, as applicable, shall be unaffected
by such termination.

(b)Regulatory Materials.  BMS shall provide Five Prime with all relevant
material data, documentation and information for the terminated Licensed
Antibodies/Licensed Products and the terminated countries, but shall not be
required to assign or provide a right of

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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reference to Five Prime for any Regulatory Materials relating to such terminated
Licensed Antibodies/Licensed Products and terminated countries in the Exempted
Indication.

(c)Return of Confidential Information.  BMS shall return or destroy, at Five
Prime’s election, all Tangible Materials and all tangible items comprising,
bearing or containing any Confidential Information of Five Prime that are in
BMS’s or its Affiliates’ or sublicensees’ possession or control, and provide
written certification of such destruction; provided that BMS may retain one copy
of such Confidential Information for its legal archives, and provided further
that BMS shall not be required to destroy electronic files containing
Confidential Information that are made in the ordinary course of its business
information back-up procedures pursuant to its electronic record retention and
destruction practices that apply to its own general electronic files and
information.

(d)No Exclusivity. Upon the effective date of the termination of this Agreement,
neither Party shall have any obligations under Section 3.5.

10.5Termination Press Releases.  In the event of termination of this Agreement
for any reason and subject to the provisions of Section 9.6, the Parties shall
cooperate in good faith to coordinate public disclosure of such termination and
the reasons therefor, and shall not, except to the extent required by Applicable
Laws, disclose such information without the prior approval of the other
Party.  The principles to be observed in such disclosures shall be accuracy,
compliance with Applicable Laws and regulatory guidance documents, and
reasonable sensitivity to potential negative investor reaction to such news.

10.6Survival.  Expiration or termination of this Agreement shall not relieve the
Parties of any obligation accruing prior to such expiration or
termination.  Without limiting the foregoing, the provisions of Sections
3.1(c)(ii), 7.4, 7.5, 7.6, 7.7, 8.1, 8.2, 8.3(c), 8.4(b), 9.1, 9.2, 9.3, 9.6,
9.8, 10.3, 10.4, 10.5, 10.6, 10.7, 11.6, 12.1, 12.2, 12.3, 12.4, 12.5 and
13.2-13.13 shall survive the expiration or termination of this Agreement.

10.7Termination Not Sole Remedy.  Termination is not the sole remedy under this
Agreement and, whether or not termination is effected and notwithstanding
anything contained in this Agreement to the contrary, all other remedies shall
remain available except as agreed to otherwise herein.

Article 11

REPRESENTATIONS AND WARRANTIES

11.1Representations and Warranties of Each Party. Each Party represents and
warrants to the other Party that as of the Execution Date:

(a)it has the full right, power and authority to enter into this Agreement, to
perform its obligations hereunder; and

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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(b)this Agreement has been duly executed by it and is legally binding upon it,
enforceable in accordance with its terms, and does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a party
or by which it may be bound, nor violate any material Applicable Laws or
regulation of any court, governmental body or administrative or other agency
having jurisdiction over it.

11.2Representations and Warranties by Five Prime.  Five Prime represents and
warrants to BMS as of the Execution Date as follows:  

(a)Five Prime has sufficient legal and/or beneficial title, ownership or license
under the Five Prime Licensed Technology existing as of the Execution Date
necessary for the purposes contemplated by this Agreement, including to grant
the licenses to BMS as purported to be granted pursuant to this Agreement.  The
Five Prime Licensed Technology existing as of the Execution Date is free and
clear from any Liens.  As of the Execution Date, except for the Five Prime
Licensed Patents annotated in Exhibit C as being co-owned with BMS, Five Prime
is the sole owner of all right, title and interest in and to (free and clear
from any Liens of any kind) the Five Prime Licensed Patents listed in Exhibit
C.  All fees required to maintain any issued Patents within such Five Prime
Licensed Patents have been paid to date.  

(b)Five Prime has not received any written notice from any Third Party asserting
or alleging that the discovery, research and/or Development of Licensed
Antibodies and Licensed Products by Five Prime prior to the Execution Date
infringes or misappropriates the intellectual property rights of such Third
Party.  The Five Prime Licensed Technology existing as of the Execution Date was
not obtained in violation of any contractual or fiduciary obligation owed by
Five Prime or its employees or agents to any Third Party or through the
misappropriation of the intellectual property rights (including any trade
secrets) from any Third Party.

(c)There are no pending, and to Five Prime’s Knowledge no threatened, actions,
suits or proceedings against Five Prime involving the Five Prime Licensed
Technology.

(d)To Five Prime’s Knowledge, there are no activities by Third Parties as of the
Execution Date that constitute infringement or misappropriation of the Five
Prime Licensed Technology as it relates to Licensed Antibodies and Licensed
Products (in the case of pending claims, evaluating them as if issued as of the
Execution Date).

(e)Five Prime has no Knowledge from which it would have reason to conclude that
the Five Prime Licensed Patents issued as of the Execution Date are invalid.  To
Five Prime’s Knowledge, the claims included in any issued Five Prime Licensed
Patents are valid and in full force and effect as of the Execution Date.

(f)There is no agreement currently in effect under which Five Prime has granted
any license or any option for a license under the Five Prime Licensed Technology
to any Third Party to make, use or sell any Licensed Product in any country in
the Territory, other than

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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for the performance of services on Five Prime’s behalf or the performance of
specified research using materials provided by Five Prime.   Five Prime has not
granted to any Third Party any right or license or option to enforce or obtain
any patent term extension for any of the Product Specific Patents.

(g)Five Prime has disclosed or made available to BMS’s patent counsel all
unpublished patent applications requested by BMS’s patent counsel within the
Five Prime Licensed Patents existing as of the Execution Date that claim
Licensed Antibodies existing as of the Execution Date.

(h)No person, other than former or current employees of or consultants to Five
Prime who are obligated in writing to assign his/her inventions to Five Prime,
is an inventor of any of the inventions claimed in the Five Prime Licensed
Patents filed or issued as of the Execution Date, except for those Third Party
inventors of those inventions that fall within the Five Prime Licensed
Technology Controlled by Five Prime and as to which Five Prime has obtained an
assignment as of the Execution Date.  All inventors of any inventions included
within the Five Prime Licensed Technology that exist as of the Execution Date
and are purported to be owned by Five Prime have assigned or have a contractual
obligation to assign or license their entire right, title and interest in and to
such inventions and the corresponding Patents to Five Prime.  No present or
former employee or consultant of Five Prime owns or has any proprietary,
financial or other interest, direct or indirect, in the Five Prime Licensed
Technology, other than through ownership of shares or options to acquire shares
of Five Prime.  No claims have been asserted in writing challenging the
inventorship of the Five Prime Licensed Patents.

(i)The research and Development of FPA008 has been conducted prior to the
Execution Date by Five Prime, its Affiliates, its licensors, its licensees, and
its independent contractors, in compliance in all material respects with all
Applicable Laws, including all public health, environmental, and safety
provisions thereof, and all permits, governmental licenses, registrations,
approvals, concessions, franchises, authorizations, orders, injunctions and
decrees that apply to Five Prime.

(j)All FPA008 used in Clinical Trials has been manufactured in compliance with
cGMPs.

(k)(i) All Regulatory Materials filed by Five Prime with respect to FPA008
(including the INDs therefor) were, at the time of filing, true, complete and
accurate in all material respects, (ii) no serious adverse event information has
come to the attention of Five Prime that is materially different in terms of the
incidence, severity or nature of such serious adverse events than that which was
filed as safety updates to the IND for FPA008 and (iii) all written data
summaries prepared by Five Prime that were included in such Regulatory Materials
and that are based on clinical studies conducted or sponsored by Five Prime
accurately summarize in all material respects the corresponding raw data
underlying such summaries.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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(l)Five Prime has not received any written notice which has, or reasonably
should have, led it to believe that any of the INDs for FPA008 are not currently
in good standing with the FDA.  Five Prime has filed with the FDA all required
notices, supplemental applications and annual or other reports or documents,
including adverse experience reports, with respect to each IND that are material
to the continued Development of FPA008.

(m)Five Prime has not received any written notice that any United States
governmental or regulatory agency (including the FDA) has commenced, nor, to its
Knowledge, has any United States governmental or regulatory agency (including
the FDA) threatened in writing to initiate, any action to withdraw an IND, or,
to enjoin production of FPA008 at Five Prime’s or any of its supplier’s
facilities.

(n)Five Prime has made available to BMS copies of all material (i) reports of
inspection observations, if any, relating to FPA008, (ii) establishment
inspection reports relating to FPA008, and (iii) warning letters, if any, as
well as any other documents, if any, received by Five Prime or any of its
Affiliates, or to its Knowledge, its suppliers, from the FDA relating to FPA008
or arising out of the Development of FPA008 that assert past or ongoing material
lack of compliance with any Applicable Laws or regulatory requirements
(including those of the FDA) by Five Prime or its Affiliates, and to its
Knowledge, its suppliers relating to clinical Development of FPA008.

(o)To Five Prime’s Knowledge, neither it, any of its Affiliates, nor any of its
or their respective officers, employees, or agents has made an untrue statement
of material fact or fraudulent statement to FDA or any other Regulatory
Authority with respect to the Development of FPA008, failed to disclose a
material fact required to be disclosed to the FDA or any other Regulatory
Authority with respect to the Development of FPA008, or committed an act, made a
statement, or failed to make a statement with respect to the Development of
FPA008 that could reasonably be expected to provide a basis for the FDA to
invoke its policy respecting “Fraud, Untrue Statements of Material Facts,
Bribery, and Illegal Gratuities”, set forth in 56 Fed. Reg. 46191 (September 10,
1991) and any amendments thereto.

(p)Five Prime has disclosed to BMS all material information of which it has
Knowledge with respect to the safety and efficacy of FPA008.

(q)In the course of the Development of Licensed Antibodies and Licensed
Products, to Five Prime’s Knowledge Five Prime has not used prior to the
Execution Date, any employee, agent or independent contractor who was debarred
by any Regulatory Authority at the time of such Development.

(r)To the Knowledge of Five Prime, all information provided by Five Prime to BMS
for due diligence purposes in relation to this Agreement is accurate in all
material respects. To the Knowledge of Five Prime, Five Prime has not omitted to
supply BMS with any

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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material information in Five Prime’s possession and Control concerning any Five
Prime Licensed Patent or FPA008.

11.3Representations and Warranties by BMS.  BMS represents and warrants to Five
Prime as of the Execution Date that:

(a)it has the full right, power and authority to grant the licenses and rights
herein to Five Prime and it has not granted any license, right or interest in,
to or under the BMS Technology to any Third Party that is inconsistent with the
licenses granted to Five Prime under Section 3.3 or entered into any other
agreement with a Third Party that is or would be in conflict with its
performance under this Agreement;

(b)to the Knowledge of BMS, no claim, suit, action or governmental proceeding is
pending or threatened against it that would, if adversely determined, materially
impair the ability of BMS to perform its obligations under this Agreement or the
Development Plan;

(c)to the Knowledge of BMS, it is not aware of any material safety or toxicity
issue with respect to Nivolumab that is not reflected in the investigator’s
brochure for Nivolumab existing as of the Execution Date.

11.4Mutual Covenants.

(a)No Debarment.  In the course of the Research of the Licensed Antibodies, and
the Development and Commercialization of the Licensed Products neither Party nor
its Affiliates shall knowingly use any employee or consultant or Third Party
contractor (including of any (sub)licensee) who has been debarred or
disqualified by any Regulatory Authority, or, to such Party’s or its Affiliates’
knowledge, is the subject of debarment or disqualification proceedings by a
Regulatory Authority.  Each Party shall notify the other Party promptly upon
becoming aware that any of its or its Affiliates’ employees or consultants
performing on its behalf under this Agreement has been debarred or is the
subject of debarment or disqualification proceedings by any Regulatory Authority
and will prohibit such employee or consultant from performing on its behalf
under this Agreement.

(b)Compliance.  Each Party and its Affiliates shall comply in all material
respects with all Applicable Laws (including all anti-bribery laws) in the
Research of the Licensed Antibodies, the Development and Commercialization of
the Licensed Products and the performance of its obligations under this
Agreement.

11.5Compliance with Ono Agreements.  BMS shall not breach its obligations under
the Ono-BMS Agreements or voluntarily terminate or amend the Ono-BMS Agreements
if such breach, termination or amendment would adversely affect the Parties’
ability to perform this Agreement or the Development Plan or Five Prime’s rights
and benefits under this Agreement.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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11.6No Other Warranties.  EXCEPT AS EXPRESSLY STATED IN THIS ARTICLE 11, (A) NO
REPRESENTATION, CONDITION OR WARRANTY WHATSOEVER IS MADE OR GIVEN BY OR ON
BEHALF OF FIVE PRIME OR BMS; AND (B) ALL OTHER CONDITIONS AND WARRANTIES WHETHER
ARISING BY OPERATION OF LAW OR OTHERWISE ARE HEREBY EXPRESSLY EXCLUDED,
INCLUDING ANY CONDITIONS AND WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR NON-INFRINGEMENT.  

Article 12

INDEMNIFICATION; LIABILITY; INSURANCE

12.1Indemnification by Five Prime for Third Party Claims.  Five Prime shall
defend, indemnify and hold BMS, its Affiliates and their respective officers,
directors, agents and employees (“BMS Indemnitees”) harmless from and against
any all damages or other amounts payable to a Third Party claimant, as well as
any reasonable attorneys’ fees and costs of litigation incurred by such BMS
Indemnitees (collectively, “BMS Damages”), all to the extent resulting from any
claims, suits, proceedings or causes of action brought by such Third Party
(collectively, “BMS Claims”) against such BMS Indemnitee that arise out of or
result from (or are alleged to arise out of or result from):  

(a)the negligence, recklessness or willful misconduct of any of the Five Prime
Indemnitees;

(b)the breach of any of the warranties or representations made by Five Prime to
BMS under this Agreement;

(c)the breach by Five Prime of its covenants and obligations pursuant to this
Agreement;

(d)the research or Development of Licensed Antibodies by or on behalf of Five
Prime before the Effective Date other than pursuant to the Current Combination
Trial;

(e)any injury to a subject in the Current Combination Trial before the Effective
Date to the extent caused by the development, use or manufacture of FPA008
before the Effective Date;

(f)any injury to a subject in the Current Combination Trial before the Effective
Date where it ultimately cannot be or is not determined if such injury is the
direct result of the development, use or manufacture of Nivolumab on the one
hand or the development, use or manufacture of FPA008 before the Effective Date
on the other hand, provided that, in the case of this clause (f), Five Prime
shall only indemnify the BMS Indemnitees for fifty percent (50%) of any such BMS
Damages;

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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(g)the conduct of the Five Prime Development Activities (other than the Current
Combination Trial), except to the extent of an injury to a subject caused by (i)
the development, use or manufacture of Nivolumab or another Proprietary
Immuno-Oncology agent of BMS or (ii) the manufacture of Licensed Antibody or
Licensed Product by or on behalf of BMS; or

(h)an injury to a subject in a clinical trial conducted or on behalf of BMS or
any of its Affiliates, licensees, or sublicensees pursuant to the Development
Plan to the extent such injury was caused by the manufacture of a Five Prime
Pipeline Asset by or on behalf of Five Prime.

The foregoing indemnity obligation shall not apply to the extent that any BMS
Claim is subject to indemnity pursuant to Section 12.2.

12.2Indemnification by BMS for Third Party Claims. BMS shall defend, indemnify
and hold Five Prime, its Affiliates and their respective officers, directors,
agents and employees (“Five Prime Indemnitees”) harmless from and against any
all damages or other amounts payable to a Third Party claimant, as well as any
reasonable attorneys’ fees and costs of litigation incurred by such Five Prime
Indemnitees (collectively, “Five Prime Damages”), all to the extent resulting
from any claims, suits, proceedings or causes of action brought by such Third
Party (collectively, “Five Prime Claims”) against such Five Prime Indemnitee
that arise out of or result from (or are alleged to arise out of or result
from):

(a)the research, Development, Commercialization or manufacture of any Licensed
Antibody or Licensed Product by or on behalf of BMS or any of its Affiliates,
licensees, or sublicensees, except to the extent of an injury to a subject in a
clinical trial conducted or on behalf of BMS or any of its Affiliates,
licensees, or sublicensees pursuant to the Development Plan wherein such injury
was caused by the manufacture of a Five Prime Pipeline Asset by or on behalf of
Five Prime;

(b)any injury to a subject in the Current Combination Trial before the Effective
Date to the extent caused by the development, use or manufacture of Nivolumab;

(c)any injury to a subject in the Current Combination Trial before the Effective
Date where it ultimately cannot be or is not determined if such injury is the
direct result of the development, use or manufacture of Nivolumab on the one
hand or the development, use or manufacture of FPA008 before the Effective Date
on the other hand, provided that, in the case of this clause (c), BMS shall only
indemnify the Five Prime Indemnitees for *** of any such Five Prime Damages;

(d)any injury to a subject in the Five Prime Development Activities (other than
the Current Combination Trial) to the extent caused by (i) the development, use
or manufacture of Nivolumab or another Proprietary Immuno-Oncology agent of BMS
or (ii) the manufacture of Licensed Antibody or Licensed Product by or on behalf
of BMS;

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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(e)the negligence, recklessness or willful misconduct of any of the BMS
Indemnitees;

(f)the breach of any of the warranties or representations made by BMS to Five
Prime under this Agreement; or

(g)any breach by BMS of its obligations pursuant to this Agreement.

The foregoing indemnity obligation shall not apply to the extent that any Five
Prime Claim is subject to indemnity pursuant to Section 12.1.

12.3Indemnification Procedure.  If either Party is seeking indemnification under
Sections 12.1 or 12.2 (the “Indemnified Party”), it shall inform the other Party
(the “Indemnifying Party”) of the Claim giving rise to the obligation to
indemnify pursuant to such Section within *** after receiving notice of the
Claim (it being understood and agreed, however, that the failure or delay by an
Indemnified Party to give such notice of a Claim shall not affect the
indemnification provided hereunder except to the extent the Indemnifying Party
shall have been prejudiced as a result of such failure or delay to give
notice).  The Indemnifying Party shall have the right to assume the defense of
any such Claim for which it is obligated to indemnify the Indemnified
Party.  The Indemnified Party shall cooperate with the Indemnifying Party and
the Indemnifying Party’s insurer as the Indemnifying Party may reasonably
request, and at the Indemnifying Party’s cost and expense.  The Indemnified
Party shall have the right to participate, at its own expense and with counsel
of its choice, in the defense of any Claim that has been assumed by the
Indemnifying Party.  Neither Party shall have the obligation to indemnify the
other Party in connection with any settlement made without the Indemnifying
Party’s written consent, which consent shall not be unreasonably withheld or
delayed.  If the Parties cannot agree as to the application of Section 12.1 or
12.2 as to any Claim, pending resolution of the dispute pursuant to Section
13.6(b), the Parties may conduct separate defenses of such Claims, with each
Party retaining the right to claim indemnification from the other Party in
accordance with Section 12.1 or 12.2 upon resolution of the underlying Claim.  

12.4Mitigation of Loss.  Each Indemnified Party shall take and shall procure
that its Affiliates take all such reasonable steps and action as are reasonably
necessary or as the Indemnifying Party may reasonably require in order to
mitigate any Claims (or potential losses or damages) under this Article
12.  Nothing in this Agreement shall or shall be deemed to relieve any Party of
any common law or other duty to mitigate any losses incurred by it.

12.5Limitation of Liability.  NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY
SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES (INCLUDING
LOST ROYALTIES) ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT,
REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.  NOTWITHSTANDING
THE FOREGOING, NOTHING IN THIS SECTION 12.5 IS INTENDED TO OR SHALL LIMIT OR
RESTRICT

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY PARTY UNDER SECTION 12.1 OR
12.2, OR DAMAGES AVAILABLE FOR A PARTY’S BREACH OF ITS OBLIGATIONS HEREUNDER
RELATING TO CONFIDENTIALITY OR A PARTY’S BREACH OF ITS OBLIGATIONS UNDER SECTION
3.5 or 3.6.

12.6Insurance.  BMS shall maintain a program of self-insurance and Five Prime
shall procure and maintain insurance, including product liability insurance,
each with respect to its activities hereunder and which is consistent with
normal business practices of prudent companies similarly situated at all times
during which any Licensed Product is being clinically tested in human subjects
or commercially distributed or sold.  Five Prime shall provide BMS with evidence
of such insurance upon request and shall provide the BMS with written notice at
least *** prior to the cancellation, non-renewal or material changes in such
insurance.  Such insurance shall not be construed to create a limit of either
Party’s liability with respect to its indemnification obligations under this
Article 12.  

Article 13

GENERAL PROVISIONS

13.1Force Majeure.  Neither Party shall be held liable to the other Party nor be
deemed to have defaulted under or breached this Agreement for failure or delay
in performing any obligation under this Agreement to the extent such failure or
delay is caused by or results from causes beyond the reasonable control of the
affected Party, potentially including embargoes, war, acts of war (whether war
be declared or not), acts of terrorism, insurrections, riots, civil commotions,
strikes, lockouts or other labor disturbances (except for a strike, lockout or
labor disturbance with respect to the non-performing Party’s respective
employees or agents), fire, floods, earthquakes or other acts of God, or acts,
generally applicable action or inaction by any governmental authority (but
excluding any government action or inaction that is specific to such Party, its
Affiliates or sublicensees, such as revocation or non-renewal of such Party’s
license to conduct business), or omissions or delays in acting by the other
Party.  The affected Party shall notify the other Party in writing of such force
majeure circumstances as soon as reasonably practical, and shall promptly
undertake and continue diligently all reasonable efforts necessary to cure such
force majeure circumstances or to perform its obligations in spite of the
ongoing circumstances.

13.2Assignment.  This Agreement may not be assigned or otherwise transferred,
nor may any right or obligation hereunder be assigned or transferred, by either
Party without the prior written consent of the other Party.  Notwithstanding the
foregoing, Five Prime may assign its rights to receive payments under this
Agreement to one or more Entities without consent of BMS, and either Party may,
without consent of the other Party, assign this Agreement and its rights and
obligations hereunder (a) in whole or in part to an Affiliate of such Party, or
(b) in whole to its successor-in-interest in connection with the sale of all or
substantially all of its assets, whether in a merger, acquisition, or similar
transaction.  Any attempted assignment not in

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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accordance with this Section 13.2 shall be null and void and of no legal
effect.  Any permitted assignee shall assume all assigned obligations of its
assignor under this Agreement.  The terms and conditions of this Agreement shall
be binding upon, and shall inure to the benefit of, the Parties and their
respected successors and permitted assigns.  

13.3Severability. If any one or more of the provisions contained in this
Agreement is held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby, unless the absence
of the invalidated provision(s) adversely affects the substantive rights of the
Parties.  The Parties shall in such an instance use their best efforts to
replace the invalid, illegal or unenforceable provision(s) with valid, legal and
enforceable provision(s) which, insofar as practical, implement the purposes of
this Agreement.

13.4Notices.  All notices which are required or permitted hereunder shall be in
writing and sufficient if delivered personally, sent by facsimile (and promptly
confirmed by personal delivery, registered or certified mail or overnight
courier), sent by nationally-recognized overnight courier or sent by registered
or certified mail, postage prepaid, return receipt requested, addressed as
follows:

 

if to Five Prime, to:

Five Prime Therapeutics, Inc.

2 Corporate Drive

South San Francisco, CA  94080

Attention: President & CEO

Facsimile No.: 415-365-5602

 

 

 

and:

Five Prime Therapeutics, Inc.

2 Corporate Drive

South San Francisco, CA  94080

Attention: Legal Department

Facsimile No.: 415-520-9567

 

With a copy (which shall not constitute notice) to:

Cooley LLP

3175 Hanover Street

Palo Alto, CA  94304-1130
Attention: Barbara Kosacz and Marya Postner, Ph.D.

Facsimile No.: 650-849-7400

 

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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if to BMS, to:

Bristol-Myers Squibb Company

P.O. Box 4000 Route 206 and Province Line Road

Princeton, NJ 08543-4000

Attention:  VP, Business Development

 

With a copy to:

Bristol-Myers Squibb Company

P.O. Box 4000 Route 206 and Province Line Road

Princeton, NJ 08543-4000

Attention: VP & Assistant General Counsel, Licensing and Business Development

 

or to such other address(es) as the Party to whom notice is to be given may have
furnished to the other Party in writing in accordance herewith.  Any such notice
shall be deemed to have been given: (a) when delivered if personally delivered
or sent by facsimile on a Business Day (or if delivered or sent on a
non-Business Day, then on the next Business Day); (b) on the Business Day after
dispatch if sent by nationally-recognized overnight courier; or (c) on the ***
following the date of mailing, if sent by mail.

13.5Governing Law. This Agreement and all claims arising out of this Agreement
or the breach thereof shall be governed by and construed in accordance with the
laws of the State of New York and the patent laws of the United States without
reference to any rules of conflict of laws.

13.6Dispute Resolution.  

(a)The Parties shall negotiate in good faith and use reasonable efforts to
settle any dispute, controversy or claim arising from or related to this
Agreement or the breach thereof.  Either Party shall have the right to refer any
dispute to the Executive Officers who shall attempt in good faith to resolve
such dispute over a period of ***.  If the Parties do not fully settle, and a
Party wishes to pursue the matter, each such dispute, controversy or claim that
is not a matter this Agreement provides will be addressed pursuant to Section
13.6(b) shall be finally resolved through an action brought in the United States
District Court for the Southern District of New York, and each Party hereby
submits to the jurisdiction and venue of such court.  

(b)Expedited Arbitration.

(i)In the event of a dispute between the Parties specified in this Agreement to
be resolved under this Section 13.6(b), which dispute cannot be resolved between
the Parties or the Executive Officers as set forth in Section 13.6(a), either
Party shall be free to institute binding arbitration with respect to such
dispute in accordance with this Section 13.6(b) upon written notice to the other
Party (an “Arbitration Notice”) and seek remedies as may be available. Any
dispute unresolved under this Section 13.6(b) shall be settled by binding

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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arbitration administered by JAMS (or any successor entity thereto) and in
accordance with the Comprehensive Arbitration Rules and Procedures then in
effect and the Expedited Procedures contained therein, as modified in this
paragraph (the “Rules”), except (i) to the extent such rules are inconsistent
with this Section 13.6(b), in which case, this Section 13.6(b) shall control.
The proceedings and decisions of the arbitrator shall be confidential, final and
binding on the Parties, and judgment upon the award of such arbitrator may be
entered in any court having jurisdiction thereof.

(ii)Upon receipt of an Arbitration Notice by a Party, the applicable dispute
shall be resolved by final and binding arbitration before a panel of ***
arbitrators (the “Arbitrators”), with each arbitrator having not less than ***
years of experience in the biotechnology or pharmaceutical industry and subject
matter expertise with respect to the matter subject to arbitration.  Any
Arbitrator chosen hereunder shall have educational training and industry
experience sufficient to demonstrate a reasonable level of scientific,
financial, medical and industry knowledge relevant to the particular
dispute.  Each Party shall promptly select *** Arbitrator each, which selections
shall in no event be made later than *** after receipt of the Arbitration
Notice.  The *** Arbitrator shall be chosen promptly by mutual agreement of the
Arbitrators chosen by the Parties, but in no event later than *** after the date
that the last of such Arbitrators was appointed.  

(iii)The Arbitrators’ decision and award shall be made within *** of the filing
of the arbitration demand, and the Arbitrators shall agree to comply with this
schedule before accepting appointment. However, this time limit may be extended
by agreement of the Parties or by the Arbitrators.  The Arbitrators shall be
authorized to award compensatory damages, but shall not be authorized to reform,
modify or materially change this Agreement.  The Arbitrators shall, within ***
after the conclusion of the hearing, issue a written award and statement of
decision describing the material facts and the grounds for the conclusions on
which the award is based, including the calculation of any damages awarded.  The
decision of the Arbitrators shall be final, conclusive and binding on the
Parties and enforceable by any court of competent jurisdiction.  

(iv)Each Party shall bear its own costs and expenses (including legal fees and
expenses) relating to the arbitration proceeding, except that the fees of the
Arbitrators and other related costs of the arbitration shall be shared equally
by the Parties, unless the Arbitrators determine that a Party has incurred
unreasonable expenses due to vexatious or bad faith positions taken by the other
Party, in which event the Arbitrators may make an award of all or any portion of
such expenses (including legal fees and expenses) so incurred.

(v)The Arbitrators shall be required to render the decision in writing and to
comply with, and the award shall be limited by, any express provisions of this
Agreement relating to damages or the limitation thereof.  No Arbitrator shall
have the power to award punitive damages under this Agreement regardless of
whether any such damages are contained in a proposal, and such award is
expressly prohibited.  

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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(vi)Unless the Parties otherwise agree in writing, during the period of time
that any arbitration proceeding is pending under this Agreement, (A) the Parties
shall continue to comply with all those terms and provisions of this Agreement
that are not the subject of the pending arbitration proceeding; and (B) in the
event that the subject of the dispute relates to the exercise by a Party of a
termination right hereunder, including in the case of a material breach of this
Agreement, the effectiveness of such termination shall be stayed until the
conclusion of the proceedings under this Section 13.6(b).  

(vii)All arbitration proceedings and decisions of the Arbitrators under this
Section 13.6(b) shall be deemed Confidential Information of both Parties under
Article 9. The arbitration proceedings shall take place in San Francisco,
California, in the English language. Notwithstanding the foregoing, any dispute,
controversy or claim relating to the scope, validity, enforceability or
infringement of any patent rights or trademark rights shall be submitted to a
court of competent jurisdiction in the country in which such patent rights or
trademark rights were granted or arose.  Nothing in this Section 13.6(b) will
preclude either Party from seeking equitable relief or interim or provisional
relief from a court of competent jurisdiction, including a temporary restraining
order, preliminary injunction or other interim equitable relief, concerning a
dispute either prior to or during any arbitration if necessary to protect the
interests of such Party or to preserve the status quo pending the arbitration
proceeding.

13.7Termination of Existing Clinical Agreement; Entire Agreement; Amendments.  

(a)The Parties hereby acknowledge and agree that the Existing Clinical Agreement
shall be deemed terminated as of the Effective Date, and no provisions of the
Existing Clinical Agreement shall survive such termination, notwithstanding
Section 12.6 of the Existing Clinical Agreement.  For clarity, the existing
Joint Development Committee and any existing working groups under the Existing
Clinical Agreement shall be disbanded upon the Effective Date and shall be
superseded by the JDC and Working Groups hereunder.  For clarity and without
limiting the foregoing, Section 7.1(b) of the Existing Clinical Agreement shall
not survive such termination.  

(b)This Agreement, together with the Exhibits hereto, contains the entire
understanding of the Parties with respect to the collaboration and the licenses
granted hereunder.  Any other express or implied agreements and understandings,
negotiations, writings and commitments, either oral or written, in respect to
the collaboration and the licenses granted hereunder are superseded by the terms
of this Agreement.  The Exhibits to this Agreement are incorporated herein by
reference and shall be deemed a part of this Agreement.  This Agreement may be
amended, or any term hereof modified, only by a written instrument duly executed
by authorized representative(s) of both Parties hereto.  The Parties agree that,
effective as of the Effective Date, that certain Mutual Non-Disclosure Agreement
between BMS and Five Prime dated as of March 11, 2015 (“Confidentiality
Agreement”) shall be superseded by this

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Agreement, and that disclosures made prior to the Effective Date pursuant to the
Confidentiality Agreement shall be subject to the confidentiality and non-use
provisions of this Agreement.  The foregoing shall not be interpreted as a
waiver of any remedies available to either Party or its Affiliates as a result
of any breach, prior to the Effective Date, by the other Party or its Affiliates
of such Party’s or its Affiliate’s obligations pursuant to the Confidentiality
Agreement.

13.8Headings.  The captions to the several Articles, Sections and subsections
hereof are not a part of this Agreement, but are merely for convenience to
assist in locating and reading the several Articles and Sections hereof.

13.9Independent Contractors. Five Prime and BMS are independent contractors and
that the relationship between the two Parties shall not constitute a
partnership, joint venture or agency.  Neither Five Prime nor BMS shall have the
authority to make any statements, representations or commitments of any kind, or
to take any action, which shall be binding on the other Party, without the prior
written consent of the other Party.

13.10Waiver.  The waiver by either Party hereto of any right hereunder, or of
any failure of the other Party to perform, or of any breach by the other Party,
shall not be deemed a waiver of any other right hereunder or of any other breach
by or failure of such other Party whether of a similar nature or otherwise.

13.11Cumulative Remedies.  No remedy referred to in this Agreement is intended
to be exclusive, but each shall be cumulative and in addition to any other
remedy referred to in this Agreement or otherwise available under Applicable
Laws.

13.12Waiver of Rule of Construction.  Each Party has had the opportunity to
consult with counsel in connection with the review, drafting and negotiation of
this Agreement.  Accordingly, no ambiguity in this Agreement shall be strictly
construed against either Party.

13.13Business Day Requirements. In the event that any notice or other action or
omission is required to be taken by a Party under this Agreement on a day that
is not a Business Day then such notice or other action or omission shall be
deemed to be required to be taken on the next occurring Business Day.

13.14Further Actions.  Each Party agrees to execute, acknowledge and deliver
such further instruments, and to do all such other acts, as necessary or
appropriate in order to carry out the purposes and intent of this Agreement.

13.15Counterparts. This Agreement may be executed in two or more counterparts by
original signature, facsimile or PDF files, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

13.16Compliance with Sunshine Laws

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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(a)To the extent that Five Prime becomes subject to one or more Sunshine Laws
during the term of this Agreement, Five Prime will report payments or other
transfers of value (“POTV”) made by Five Prime related to its Development
activities hereunder in compliance with such applicable Sunshine Laws.
Interpretation of the Sunshine Laws for purposes of reporting any POTV by a
Party shall be in such Party’s sole discretion so long as the interpretation
complies with Applicable Laws.

(b)Five Prime (i) will provide (to the extent in the possession of Five Prime),
or will utilize Commercially Reasonable Efforts to obligate and ensure that
applicable Third Party contractors for the Current Combination Trial provide,
BMS with any information requested by BMS with respect to costs and expenses
related to the Current Combination Trial with respect to which BMS reimburses
Five Prime pursuant to Section 4.3(b)(iii) as BMS may reasonably determine to be
necessary for BMS to comply with its reporting obligations under Sunshine Laws
(with such amounts paid to, or at the direction of, each Recipient to be
reported to BMS within a reasonable time period specified by BMS) and (ii) will
reasonably cooperate with, and will utilize Commercially Reasonable Efforts to
obligate and ensure that applicable Third Party contractors for the Current
Combination Trial reasonably cooperate with, BMS in connection with its
compliance with such Sunshine Laws. The form in which Five Prime provides any
such information shall be mutually agreed but sufficient to enable BMS to comply
with its reporting obligations and BMS may disclose any information that it
believes is necessary to comply with Sunshine Laws.  Without limiting the
foregoing, BMS shall have the right to allocate payments or other transfers of
value in connection with this Agreement in any required reporting under Sunshine
Laws in accordance with its normal business practices. These obligations shall
survive the expiration and termination of the agreement to the extent necessary
for BMS to comply with Sunshine Laws.

(c)For purposes of this Section 13.16, “Sunshine Laws” means Applicable Laws
requiring collection, reporting and disclosure of POTVs to certain healthcare
providers, entities and individuals.  These Applicable Laws may include,
relevant provisions of the Patient Protection and Affordable Health Care Act of
2010 and implementing regulations thereunder.  “Recipients” means healthcare
providers, teaching hospitals and/or any other persons for whom transfers of
value or payments must be reported under Sunshine Laws.

13.17Rights in Bankruptcy.

(a)All rights and licenses granted under or pursuant to this Agreement by one
Party to the other are, for all purposes of Section 365(n) of Title 11 of the
United States Code (“Title 11”), licenses of rights to “intellectual property”
as defined in Title 11, and, in the event that a case under Title 11 is
commenced by or against either Party (the “Bankrupt Party”), the other Party
shall have all of the rights set forth in Section 365(n) of Title 11 to the
maximum extent permitted thereby.  During the Term, each Party shall create and
maintain current copies to the extent practicable of all such intellectual
property.  Without limiting the Parties’ rights under Section 365(n) of Title
11, if a case under Title 11 is commenced by or against the

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Bankrupt Party, the other Party shall be entitled to a copy of any and all such
intellectual property and all embodiments of such intellectual property, and the
same, if not in the possession of such other Party, shall be promptly delivered
to it in each case (i) before this Agreement is rejected by or on behalf of the
Bankrupt Party, within *** after the other Party’s written request, unless the
Bankrupt Party, or its trustee or receiver, elects within *** to continue to
perform all of its obligations under this Agreement, or (ii) after any rejection
of this Agreement by or on behalf of the Bankrupt Party, if not previously
delivered as provided under clause (i) above.  All rights of the Parties under
this Section 13.17 and under Section 365(n) of Title 11 are in addition to and
not in substitution of any and all other rights, powers, and remedies that each
Party may have under this Agreement, Title 11, and any other Applicable Laws.  

(b)Any intellectual property provided pursuant to the provisions of this Section
13.17 shall be subject to the licenses set forth elsewhere in this Agreement and
the payment obligations of this Agreement, which shall be deemed to be royalties
for purposes of Title 11.

13.18Antitrust Filings.

(a)Each of Five Prime and BMS agrees to prepare and make appropriate filings
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(“HSR”), and other antitrust requirements relating to this Agreement and the
transactions contemplated hereby as soon as reasonably practicable after the
Execution Date (but no later than *** after the Execution Date), and BMS shall
bear the filing fees associated with any HSR filing, but each Party shall
otherwise bear its own costs in connection with such filings.  The Parties agree
to cooperate in the antitrust clearance process and to furnish promptly to the
Federal Trade Commission (FTC), the Antitrust Division of the Department of
Justice (DOJ) and any other agency or authority, any information reasonably
requested by them in connection with such filings.  With respect to the HSR and
other filings made pursuant to this Section 13.18(a), each of Five Prime and BMS
shall, to the extent practicable: (i) promptly notify the other Party of any
material communication to that Party from the FTC, the DOJ, or any other agency
or authority and, subject to Applicable Laws, discuss with and permit the other
Party to review in advance any proposed written communication to any of the
foregoing; (ii) not agree to participate in any substantive meeting or
discussion with the FTC, the DOJ or any other agency or authority in respect of
any filings, investigation or inquiry concerning this Agreement unless it
consults with the other Party in advance and, to the extent permitted by such
the FTC, the DOJ or any other agency or authority, give the other Party the
opportunity to attend and participate thereat; and (iii) furnish the other Party
with copies of all correspondence and communications (and memoranda setting
forth the substance thereof) between them and their Affiliates and their
respective representatives on the one hand, and the FTC, the DOJ or any other
agency or authority or members of their respective staffs on the other hand,
with respect to this Agreement.  

(b)Other than the provisions of this Section 13.18 and Article 9
(Confidentiality) and Section 13.5, the rights and obligations of the Parties
under this Agreement

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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shall not become effective until (a) the waiting period (and any extension
thereof) applicable to the transactions contemplated by this Agreement under HSR
shall have expired or earlier been terminated; (b) no injunction (whether
temporary, preliminary or permanent) prohibiting consummation of the
transactions contemplated by this Agreement or any material portion hereof shall
be in effect; and (c) no judicial or administrative proceeding opposing
consummation of all or any part of this Agreement shall be pending (the date
these conditions are satisfied being the “Effective Date” of this
Agreement).  Upon the occurrence of the Effective Date, all provisions of this
Agreement shall become effective automatically without the need for further
action by the Parties.

(c)If the Effective Date has not occurred within *** after the Execution Date,
this Agreement may be terminated by either Party on written notice to the other.

13.19Non-Solicitation of Employees.  After the Effective Date and during the
Term, each Party agrees that neither it nor any of its Affiliates shall recruit,
solicit or induce any employee of the other Party that such Party knew was
directly and substantially involved in the Development or Commercialization
activities under this Agreement to terminate his or her employment with such
other Party and become employed by or consult for such Party, whether or not
such employee is a full-time employee of such other Party, and whether or not
such employment is pursuant to a written agreement or is at-will.  For purposes
of the foregoing, “recruit”, “solicit” or “induce” shall not be deemed to mean
(a) circumstances where an employee of a Party (i) initiates contact with the
other Party or any of its Affiliates with regard to possible employment; or (ii)
responds to general solicitations of employment not specifically targeted at
employees of a Party or any of its Affiliates, including responses to general
advertisements or postings, and (b) discussions, interviews, negotiations,
offers or acceptances of employment or similar activities that arise as a result
of circumstances described in (a).

<REMAINDER OF PAGE INTENTIONALLY LEFT BLANK>

 

 

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Confidential

In Witness Whereof, the Parties intending to be bound have caused this Agreement
to be executed by their duly authorized representatives as of the Execution
Date.

Five Prime Therapeutics, Inc.

By:/s/ Lewis T. Williams

 

Name:Lewis T. Williams, MD, PhD

 

Title:President and Chief Executive Officer

 

Bristol-Myers Squibb Company

By:/s/ Michael Burgess

 

Name:Michael Burgess

 

Title:Senior Vice President, Exploratory Clinical and Translational Research

 

 

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

Signature Page to License and Collaboration Agreement

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Confidential

 

LIST OF EXHIBITS AND SCHEDULES

 

Exhibit A: BMS Reserved Pipeline Targets

Exhibit B: Licensed Antibodies

Exhibit C: Five Prime Licensed Patents

Exhibit D: Current Five Prime Non-I-O Studies

Exhibit E: BMS’s Initial Development Plan

Exhibit F: Examples of Royalty Calculations

Exhibit G: Press Release

Exhibit H: Net Sales Calculation

Exhibit I: Potential Countries

 

Schedule 4.3(k): Five Prime Responsibilities for Current Combination Trial
Schedule 5.1: Inventory Allocation
Schedule 5.2: Planned Costs for FPA008 Manufacture

 

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Confidential

Exhibit A:  BMS Reserved Pipeline Targets

 

 

***

 

*** INDICATES ONE PAGE OF MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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Confidential

Exhibit B: Licensed Antibodies

 

***

 

 

*** INDICATES ONE PAGE OF MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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Confidential

 

Exhibit C: Five Prime Licensed Patents

 

***

 

*** INDICATES TEN PAGES OF MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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Confidential

 

Exhibit D: Current Five Prime Non-I-O Studies

 

***

 

*** INDICATES ONE PAGE OF MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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Confidential

 

Exhibit E: BMS’s Initial Development Plan

 

***

*** INDICATES THREE PAGES OF MATERIAL THAT WAS OMITTED AND FOR WHICH
CONFIDENTIAL TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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Exhibit F

Royalty Calculation Example – No Co-Promote Option Exercised

Example:  

If Five Prime has not exercised its Co-Promote Option with respect to a
particular Licensed Product and the total quarterly Net Sales of such Licensed
Product in the Territory in a particular Calendar Quarter are $***, Licensed
Product royalties under Section 7.3(a)(i) shall be calculated as:

***

Royalty Calculation Example – Co-Promote Option Exercised

Example:  

If Five Prime has exercised its Co-Promote Option with respect to a particular
Licensed Product and the total Net Sales of such Licensed Product in the
Co-Promotion Territory in a particular Calendar Quarter are $***, Licensed
Product royalties under Section 7.3(a)(ii) shall be calculated as:

(a) Royalties for Co-Promotion Territory:

***

 

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Confidential

 

Exhibit G: Press Release

 

[g2016031121084233911388.jpg][g2016031121084233911389.jpg]

Bristol-Myers Squibb Enters into Exclusive Worldwide License and Collaboration
Agreement with Five Prime Therapeutics for Colony Stimulating Factor 1 Receptor
(CSF1R) Antibody Program

Strategic immuno-oncology collaboration focused on development of CSF1R antibody
(FPA008) in combination with Opdivo (nivolumab) and other therapies with the
goal of bringing new treatment options to patients

 

Five Prime to receive up to $1.74 billion for FPA008, inclusive of $350 million
upfront and potential development and regulatory milestone payments; additional
double-digit royalties on future sales and option to co-promote in the U.S.

 

Five Prime to continue development of FPA008 in pigmented villonodular synovitis
(PVNS) and in potential combinations with its own immuno-oncology candidates

  (NEW YORK and SOUTH SAN FRANCISCO, CA – October 15, 2015) - Bristol-Myers
Squibb Company (NYSE:BMY) and Five Prime Therapeutics, Inc. (Nasdaq:FPRX) today
announced that they have entered into an exclusive worldwide license and
collaboration agreement for the development and commercialization of Five
Prime’s colony stimulating factor 1 receptor (CSF1R) antibody program, including
FPA008 which is in Phase 1 development for immunology and oncology indications.
This agreement replaces the companies’ existing clinical collaboration agreement
to evaluate the safety, tolerability and preliminary efficacy of combining
Opdivo (nivolumab), Bristol-Myers Squibb’s programmed-death 1 (PD-1) immune
checkpoint inhibitor, with FPA008 in six tumor types.

“By blocking a key mediator of immunosuppression in the tumor microenvironment,
CSF1R inhibition with FPA008 represents a potentially important complementary
immuno-oncology mechanism of action to the T-cell directed antibodies and
co-stimulatory molecules in our pipeline,” said Francis Cuss, MB BChir, FRCP,
executive vice president and chief scientific

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officer of Bristol-Myers Squibb.  “This agreement, which builds upon our
existing relationship with Five Prime in immuno-oncology, is another important
example of our commitment to expanding our presence in this space and to
researching novel combination regimens.”

“We believe this transformational collaboration with Bristol-Myers Squibb for
our CSF1R antibody program represents the best of both worlds in terms of
maximizing the potential of FPA008,” said Lewis T. “Rusty” Williams, M.D.,
Ph.D., president and chief executive officer of Five Prime Therapeutics.
“Bristol-Myers Squibb has undisputed leadership in the immuno-oncology
landscape, deep clinical development and regulatory expertise, and an
established commercial infrastructure to deliver important new therapies to
patients. Bristol-Myers Squibb also has a rich pipeline of clinical candidates
and approved products, a number of which may have therapeutic synergy when
coupled with FPA008, given the potential of CSF1R inhibition to suppress the
activity and survival of tumor associated macrophages. At the same time, Five
Prime will continue to conduct trials in pigmented villonodular synovitis (PVNS)
and immuno-oncology with FPA008, which is a product of our proprietary protein
platform and our discovery of IL-34, one of the two ligands for CSF1R that
FPA008 blocks.”

Under the terms of the license and collaboration agreement, Bristol-Myers Squibb
will make an upfront payment of $350 million to Five Prime. Bristol-Myers Squibb
will be responsible for development and manufacturing of FPA008 for all
indications, subject to Five Prime’s option to conduct, at its own cost, certain
future studies including registrational studies to support approval of FPA008 in
PVNS and FPA008 in combination with Five Prime’s internal pipeline assets in
immuno-oncology. Five Prime will continue to conduct the current Phase 1a/1b
trial evaluating the combination of Opdivo and FPA008 in six tumor settings,
which was announced as part of the companies’ initial clinical collaboration in
November 2014, through to completion. Bristol-Myers Squibb will be responsible
for global commercialization, and Five Prime will retain rights to a U.S.
co-promotion option. In addition to the upfront payment, Five Prime will be
eligible to receive up to $1.05 billion in development and regulatory milestone
payments per anti-CSF1R product for oncology indications (including combinations
with Opdivo and any other agent), and up to $340 million in development and
regulatory milestone payments

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per anti-CSF1R product for non-oncology indications, as well as double digit
royalties, such royalties to be enhanced in the U.S. in the event that Five
Prime exercises its co-promotion option.

The effectiveness of the agreement is subject to clearance under the
Hart-Scott-Rodino Antitrust Improvements Act.

About FPA008

FPA008 is an investigational antibody that inhibits CSF1R and has been shown in
preclinical models to block the activation and survival of monocytes and
macrophages. Early data have shown that inhibition of CSF1R in inflamed RA
joints blocks the production of inflammatory cytokines by macrophages and
inhibits osteoclasts, monocyte-lineage cells that can cause bone erosions and
joint destruction. Inhibition of CSF1R in preclinical models of
several cancers reduces the number of immunosuppressive tumor-associated
macrophages (TAMs) in the tumor microenvironment, thereby facilitating an immune
response against tumors. FPA008 is currently in phase 1 clinical trials in
several immunology and oncology indications.

About Opdivo

Opdivo was the first PD-1 immune checkpoint inhibitor to receive regulatory
approval anywhere in the world in July 2014, and currently has regulatory
approval in more than 37 countries including the United States, Japan, and in
the European Union.

In the U.S., Opdivo is indicated for patients with unresectable or metastatic
melanoma and disease progression following Yervoy (ipilimumab) and, if BRAF V600
mutation positive, a BRAF inhibitor. Opdivo is also approved for use in
combination with Yervoy, for the treatment of patients with BRAF V600 wild-type
unresectable or metastatic melanoma. These indications are approved under
accelerated approval based on tumor response rate and durability of
response. Continued approval for this indication may be contingent upon
verification and description of clinical benefit in confirmatory trials. Opdivo
is also indicated in the U.S. for the

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treatment of patients with metastatic non-small cell lung cancer (NSCLC) with
progression on or after platinum-based chemotherapy.

Bristol-Myers Squibb has a broad, global development program to study Opdivo in
multiple tumor types consisting of more than 50 trials – as a monotherapy or in
combination with other therapies – in which more than 8,000 patients have been
enrolled worldwide.

IMPORTANT SAFETY INFORMATION

WARNING: IMMUNE-MEDIATED ADVERSE REACTIONS

YERVOY can result in severe and fatal immune-mediated adverse reactions due to
T-cell activation and proliferation. These immune-mediated reactions may involve
any organ system; however, the most common severe immune-mediated adverse
reactions are enterocolitis, hepatitis, dermatitis (including toxic epidermal
necrolysis), neuropathy, and endocrinopathy. The majority of these
immune-mediated reactions initially manifested during treatment; however, a
minority occurred weeks to months after discontinuation of YERVOY.

Assess patients for signs and symptoms of enterocolitis, dermatitis, neuropathy,
and endocrinopathy and evaluate clinical chemistries including liver function
tests (LFTs) and thyroid function tests at baseline and before each dose.

Permanently discontinue YERVOY and initiate systemic high-dose corticosteroid
therapy for severe immune-mediated reactions.

Immune-Mediated Pneumonitis

Immune-mediated pneumonitis or interstitial lung disease, including fatal cases,
occurred with OPDIVO treatment. Across the clinical trial experience with solid
tumors, fatal immune-mediated pneumonitis occurred in 0.5% (5/978) of patients
receiving OPDIVO as a single agent. In Checkmate 037, pneumonitis, including
interstitial lung disease, occurred in 3.4% (9/268) of patients receiving OPDIVO
and none of the 102 patients receiving chemotherapy. Immune-mediated pneumonitis
occurred in 2.2% (6/268) of patients receiving OPDIVO; Grade 3 (n=1) and Grade 2
(n=5). In Checkmate 057, immune-mediated pneumonitis, including interstitial
lung disease, occurred in 3.4% (10/287) of patients receiving OPDIVO as a single
agent: Grade 3 (n=5), Grade 2 (n=2), and Grade 1 (n=3). Across the clinical
trial experience in 188 patients with melanoma who received OPDIVO in
combination with YERVOY, in Checkmate 069 (n=94) and an additional dose-finding
study (n=94), fatal immune-mediated pneumonitis occurred in 0.5%

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(1/188) of patients. In Checkmate 069, there were six additional patients who
died without resolution of abnormal respiratory findings. Monitor patients for
signs with radiographic imaging and symptoms of pneumonitis. Administer
corticosteroids for Grade 2 or greater pneumonitis. Permanently discontinue for
Grade 3 or 4 and withhold until resolution for Grade 2. In Checkmate 069,
pneumonitis, including interstitial lung disease, occurred in 10% (9/94) of
patients receiving OPDIVO in combination with YERVOY and 2.2% (1/46) of patients
receiving YERVOY. Immune-mediated pneumonitis occurred in 6% (6/94) of patients
receiving OPDIVO in combination with YERVOY: Grade 5 (n=1), Grade 3 (n=2) and
Grade 2 (n=3).

Immune-Mediated Colitis

Immune-mediated colitis can occur with OPDIVO treatment. Monitor patients for
signs and symptoms of colitis. Administer corticosteroids for Grade 2 (of more
than 5 days duration), 3, or 4 colitis. As a single agent, withhold OPDIVO for
Grade 2 or 3 and permanently discontinue for Grade 4 or recurrent colitis upon
restarting OPDIVO. In combination with YERVOY, withhold OPDIVO for Grade 2 and
permanently discontinue for Grade 3 or 4 or recurrent colitis upon restarting
OPDIVO. In Checkmate 037, diarrhea or colitis occurred in 21% (57/268) of
patients receiving OPDIVO and 18% (18/102) of patients receiving chemotherapy.
Immune-mediated colitis occurred in 2.2% (6/268) of patients receiving OPDIVO;
Grade 3 (n=5) and Grade 2 (n=1). In Checkmate 057, diarrhea or colitis occurred
in 17% (50/287) of patients receiving OPDIVO as a single agent. Immune-mediated
colitis occurred in 2.4% (7/287) of patients: Grade 3 (n=3), Grade 2 (n=2), and
Grade 1 (n=2). In Checkmate 069, diarrhea or colitis occurred in 57% (54/94) of
patients receiving OPDIVO in combination with YERVOY and 46% (21/46) of patients
receiving YERVOY. Immune-mediated colitis occurred in 33% (31/94) of patients
receiving OPDIVO in combination with YERVOY: Grade 4 (n=1), Grade 3 (n=16),
Grade 2 (n=9), and Grade 1 (n=5).

In a separate YERVOY Phase 3 study, severe, life-threatening, or fatal (diarrhea
of ≥7 stools above baseline, fever, ileus, peritoneal signs; Grade 3-5)
immune-mediated enterocolitis occurred in 34 (7%) patients. Across all
YERVOY-treated patients in that study (n=511), 5 (1%) developed intestinal
perforation, 4 (0.8%) died as a result of complications, and 26 (5%) were
hospitalized for severe enterocolitis.

Immune-Mediated Hepatitis

Immune-mediated hepatitis can occur with OPDIVO treatment. Monitor patients for
abnormal liver tests prior to and periodically during treatment. Administer
corticosteroids for Grade 2 or greater transaminase elevations. Withhold for
Grade 2 and permanently discontinue for Grade 3 or 4 immune-mediated hepatitis.
In Checkmate 037, there was an increased incidence of liver test abnormalities
in the OPDIVO-treated group as compared to the chemotherapy-treated group,

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with increases in AST (28% vs 12%), alkaline phosphatase (22% vs 13%), ALT (16%
vs 5%), and total bilirubin (9% vs 0). Immune-mediated hepatitis occurred in
1.1% (3/268) of patients receiving OPDIVO; Grade 3 (n=2) and Grade 2 (n=1). In
Checkmate 057, one patient (0.3%) developed immune-mediated hepatitis. In
Checkmate 069, immune-mediated hepatitis occurred in 15% (14/94) of patients
receiving OPDIVO in combination with YERVOY: Grade 4 (n=3), Grade 3 (n=9), and
Grade 2 (n=2).

In a separate YERVOY Phase 3 study, severe, life-threatening, or fatal
hepatotoxicity (AST or ALT elevations >5x the ULN or total bilirubin elevations
>3x the ULN; Grade 3-5) occurred in 8 (2%) patients, with fatal hepatic failure
in 0.2% and hospitalization in 0.4%.

Immune-Mediated Dermatitis

In a separate YERVOY Phase 3 study, severe, life-threatening, or fatal
immune-mediated dermatitis (eg, Stevens-Johnson syndrome, toxic epidermal
necrolysis, or rash complicated by full thickness dermal ulceration, or
necrotic, bullous, or hemorrhagic manifestations; Grade 3-5) occurred in 13
(2.5%) patients. 1 (0.2%) patient died as a result of toxic epidermal
necrolysis. 1 additional patient required hospitalization for severe dermatitis.

Immune-Mediated Neuropathies

In a separate YERVOY Phase 3 study, 1 case of fatal Guillain-Barré syndrome and
1 case of severe (Grade 3) peripheral motor neuropathy were reported.

Immune-Mediated Endocrinopathies

Hypophysitis, adrenal insufficiency, and thyroid disorders can occur with OPDIVO
treatment. Monitor patients for signs and symptoms of hypophysitis, signs and
symptoms of adrenal insufficiency during and after treatment, and thyroid
function prior to and periodically during treatment. Administer corticosteroids
for Grade 2 or greater hypophysitis. Withhold for Grade 2 or 3 and permanently
discontinue for Grade 4 hypophysitis. Administer corticosteroids for Grade 3 or
4 adrenal insufficiency. Withhold for Grade 2 and permanently discontinue for
Grade 3 or 4 adrenal insufficiency. Administer hormone replacement therapy for
hypothyroidism. Initiate medical management for control of hyperthyroidism.

In Checkmate 069, hypophysitis occurred in 13% (12/94) of patients receiving
OPDIVO in combination with YERVOY: Grade 3 (n=2) and Grade 2 (n=10). Adrenal
insufficiency occurred in 1% (n=555) of patients receiving OPDIVO as a single
agent. In Checkmate 069, adrenal insufficiency occurred in 9% (8/94) of patients
receiving OPDIVO in combination with YERVOY: Grade 3 (n=3), Grade 2 (n=4), and
Grade 1 (n=1). In Checkmate 069, hypothyroidism occurred in 19% (18/94) of
patients receiving OPDIVO in combination with

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YERVOY. All were Grade 1 or 2 in severity except for one patient who experienced
Grade 3 autoimmune thyroiditis. Grade 1 hyperthyroidism occurred in 2.1% (2/94)
of patients receiving OPDIVO in combination with YERVOY. In Checkmate 037, Grade
1 or 2 hypothyroidism occurred in 8% (21/268) of patients receiving OPDIVO and
none of the 102 patients receiving chemotherapy. Grade 1 or 2 hyperthyroidism
occurred in 3% (8/268) of patients receiving OPDIVO and 1% (1/102) of patients
receiving chemotherapy. In Checkmate 057, Grade 1 or 2 hypothyroidism, including
thyroiditis, occurred in 7% (20/287) and elevated TSH occurred in 17% of
patients receiving OPDIVO as a single agent. Grade 1 or 2 hyperthyroidism
occurred in 1.4% (4/287) of patients.

In a separate YERVOY Phase 3 study, severe to life-threatening immune-mediated
endocrinopathies (requiring hospitalization, urgent medical intervention, or
interfering with activities of daily living; Grade 3-4) occurred in 9 (1.8%)
patients. All 9 patients had hypopituitarism, and some had additional
concomitant endocrinopathies such as adrenal insufficiency, hypogonadism, and
hypothyroidism. 6 of the 9 patients were hospitalized for severe
endocrinopathies.

Immune-Mediated Nephritis and Renal Dysfunction

Immune-mediated nephritis can occur with OPDIVO treatment. Monitor patients for
elevated serum creatinine prior to and periodically during treatment. For Grade
2 or 3 increased serum creatinine, withhold and administer corticosteroids; if
worsening or no improvement occurs, permanently discontinue. Administer
corticosteroids for Grade 4 serum creatinine elevation and permanently
discontinue. In Checkmate 037, there was an increased incidence of elevated
creatinine in the OPDIVO-treated group as compared to the chemotherapy-treated
group (13% vs 9%). Grade 2 or 3 immune-mediated nephritis or renal dysfunction
occurred in 0.7% (2/268) of patients. In Checkmate 057, Grade 2 immune-mediated
renal dysfunction occurred in 0.3% (1/287) of patients receiving OPDIVO as a
single agent. In Checkmate 069, Grade 2 or higher immune-mediated nephritis or
renal dysfunction occurred in 2.1% (2/94) of patients. One patient died without
resolution of renal dysfunction.

Immune-Mediated Rash

Immune-mediated rash can occur with OPDIVO treatment. Monitor patients for rash.
Administer corticosteroids for Grade 3 or 4 rash. Withhold for Grade 3 and
permanently discontinue for Grade 4. In Checkmate 037 (n=268), the incidence of
rash was 21%; the incidence of Grade 3 or 4 rash was 0.4%. In Checkmate 057,
immune-mediated rash occurred in 6% (17/287) of patients receiving OPDIVO as a
single agent including four Grade 3 cases. In Checkmate 069, immune-mediated
rash occurred in 37% (35/94) of patients receiving OPDIVO in combination with
YERVOY: Grade 3 (n=6), Grade 2 (n=10), and Grade 1 (n=19).

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Immune-Mediated Encephalitis

Immune-mediated encephalitis can occur with OPDIVO treatment. Withhold OPDIVO in
patients with new-onset moderate to severe neurologic signs or symptoms and
evaluate to rule out other causes. If other etiologies are ruled out, administer
corticosteroids and permanently discontinue OPDIVO for immune-mediated
encephalitis. Across clinical trials of 8490 patients receiving OPDIVO as a
single agent or in combination with YERVOY, <1% of patients were identified as
having encephalitis. In Checkmate 057, fatal limbic encephalitis occurred in one
patient (0.3%) receiving OPDIVO as a single agent.

 

Other Immune-Mediated Adverse Reactions

Based on the severity of adverse reaction, permanently discontinue or withhold
treatment, administer high-dose corticosteroids, and, if appropriate, initiate
hormone-replacement therapy. The following clinically significant
immune-mediated adverse reactions occurred in <2% (n=555) of single-agent
OPDIVO-treated patients: uveitis, pancreatitis, abducens nerve paresis,
demyelination, polymyalgia rheumatica, and autoimmune neuropathy. Across
clinical trials of OPDIVO administered as a single agent at doses 3 mg/kg and 10
mg/kg, additional clinically significant, immune-mediated adverse reactions were
identified: facial nerve paralysis, motor dysfunction, vasculitis, diabetic
ketoacidosis, and myasthenic syndrome.  In Checkmate 069, the following
additional immune-mediated adverse reactions occurred in 1% of patients treated
with OPDIVO in combination with YERVOY: Guillain-Barré syndrome and
hypopituitarism. Across clinical trials of OPDIVO in combination with YERVOY,
the following additional clinically significant, immune-mediated adverse
reactions were identified: uveitis, sarcoidosis, duodenitis, pancreatitis, and
gastritis.

Infusion Reactions

Severe infusion reactions have been reported in <1% of patients in clinical
trials of OPDIVO as a single agent. In Checkmate 057, Grade 2 infusion reactions
occurred in 1% (3/287) of patients receiving OPDIVO as a single agent. In
Checkmate 069, Grade 2 infusion reactions occurred in 3% (3/94) of patients
receiving OPDIVO in combination with YERVOY. Discontinue OPDIVO in patients with
severe or life-threatening infusion reactions. Interrupt or slow the rate of
infusion in patients with mild or moderate infusion reactions.

Embryofetal Toxicity

Based on its mechanism of action, OPDIVO can cause fetal harm when administered
to a pregnant woman. Advise pregnant women of the potential risk to a fetus.
Advise females of

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reproductive potential to use effective contraception during treatment with
OPDIVO-containing regimen and for at least 5 months after the last dose of
OPDIVO.

Lactation

It is not known whether OPDIVO is present in human milk. Because many drugs,
including antibodies, are excreted in human milk and because of the potential
for serious adverse reactions in nursing infants from OPDIVO-containing regimen,
advise women to discontinue breastfeeding during treatment.

Serious Adverse Reactions

In Checkmate 037, serious adverse reactions occurred in 41% of patients
receiving OPDIVO. Grade 3 and 4 adverse reactions occurred in 42% of patients
receiving OPDIVO. The most frequent Grade 3 and 4 adverse drug reactions
reported in 2% to <5% of patients receiving OPDIVO were abdominal pain,
hyponatremia, increased aspartate aminotransferase, and increased lipase. In
Checkmate 057, serious adverse reactions occurred in 47% of patients receiving
OPDIVO as a single agent. The most frequent serious adverse reactions reported
in ≥2% of patients were pneumonia, pulmonary embolism, dyspnea, pleural
effusion, and respiratory failure. In Checkmate 069, serious adverse reactions
occurred in 62% of patients receiving OPDIVO; the most frequent serious adverse
events with OPDIVO in combination with YERVOY, as compared to YERVOY alone, were
colitis (17% vs 9%), diarrhea (9% vs 7%), pyrexia (6% vs 7%), and pneumonitis
(5% vs 0).

Common Adverse Reactions

In Checkmate 037, the most common adverse reaction (≥20%) reported with OPDIVO
was rash (21%). In Checkmate 057, the most common adverse reactions (≥20%)
reported with OPDIVO as a single agent were fatigue (49%), musculoskeletal pain
(36%), cough (30%), decreased appetite (29%), and constipation (23%). In
Checkmate 069, the most common adverse reactions (≥20%) reported in patients
receiving OPDIVO in combination with YERVOY vs YERVOY alone were rash (67% vs
57%), pruritus (37% vs 26%), headache (24% vs 20%), vomiting (23% vs 15%), and
colitis (22% vs 11%).

In a separate YERVOY Phase 3 study, the most common adverse reactions (≥5%) in
patients who received YERVOY at 3 mg/kg were fatigue (41%), diarrhea (32%),
pruritus (31%), rash (29%), and colitis (8%).

Please see U.S. Full Prescribing Information for OPDIVO and YERVOY,
including Boxed WARNING for YERVOY regarding immune-mediated adverse reactions.

About Bristol-Myers Squibb

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Bristol-Myers Squibb is a global biopharmaceutical company whose mission is to
discover, develop and deliver innovative medicines that help patients prevail
over serious diseases. For more information, please visit www.bms.com or follow
us on Twitter at http://twitter.com/bmsnews.

About Five Prime Therapeutics

Five Prime Therapeutics, Inc. discovers and develops innovative therapeutics to
improve the lives of patients with serious diseases. Five Prime's comprehensive
discovery platform, which encompasses virtually every medically relevant
extracellular protein, positions it to explore pathways in cancer, inflammation
and their intersection in immuno-oncology, an area of oncology with significant
therapeutic potential and a growing focus of the company's R&D activities. Five
Prime has entered into strategic collaborations with leading global
pharmaceutical companies and has promising product candidates in clinical and
late preclinical development. For more information, please visit
www.fiveprime.com.

 

Bristol-Myers Squibb Forward-Looking Statement

This press release contains “forward-looking statements” as that term is defined
in the Private Securities Litigation Reform Act of 1995 regarding the research,
development and commercialization of pharmaceutical products. Such
forward-looking statements are based on current expectations and involve
inherent risks and uncertainties, including factors that could delay, divert or
change any of them, and could cause actual outcomes and results to differ
materially from current expectations. No forward-looking statement can be
guaranteed. Among other risks, there can be no guarantee that FPA008 will be
successfully developed or approved for any of the indications described in this
release or in combination with Opdivo. Forward-looking statements in this press
release should be evaluated together with the many uncertainties that affect
Bristol-Myers Squibb's business, particularly those identified in the cautionary
factors discussion in Bristol-Myers Squibb's Annual Report on Form 10-K for the
year ended December 31, 2014 in our Quarterly Reports on Form 10-Q and our
Current Reports on Form 8-K. Bristol-Myers Squibb undertakes no obligation to
publicly update any forward-looking statement, whether as a result of new
information, future events or otherwise.

Five Prime Forward-Looking Statement

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This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Words such as "may," "will,"
"expect," "plan," "anticipate," "estimate," "intend" and similar expressions (as
well as other words or expressions referencing future events, conditions or
circumstances) are intended to identify forward-looking statements. These
forward-looking statements are based on Five Prime's expectations and
assumptions as of the date of this press release. Each of these forward-looking
statements involves risks and uncertainties. Actual results may differ
materially from these forward-looking statements. Forward-looking statements
contained in this press release include statements regarding (i) the planned
clinical development of the combination of FPA008 with nivolumab; and (ii) Five
Prime's potential receipt of upfront and milestone payments and royalties. Many
factors may cause differences between current expectations and actual results
including unexpected safety or efficacy data observed during clinical studies,
changes in expected or existing competition, changes in the regulatory, pricing
or reimbursement environment, and unexpected litigation or other
disputes.  Other factors that may cause actual results to differ from those
expressed or implied in the forward-looking statements in this press release are
discussed in Five Prime's filings with the U.S. Securities and Exchange
Commission, including the "Risk Factors" contained therein. Except as required
by law, Five Prime assumes no obligation to update any forward-looking
statements contained herein to reflect any change in expectations, even as new
information becomes available.

Contacts

Bristol-Myers Squibb

Media:

Sarah Koenig, 609-252-4145, sarah.koenig@bms.com

 

Investors:

 

Ranya Dajani, 609-252-5330, ranya.dajani@bms.com

 

Five Prime Therapeutics:

Amy Kendall, 415-365-5776, amy.kendall@fiveprime.com

 

 

 

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Confidential

 

Exhibit H: Net Sales Calculation

 

Definitions

 

For purposes of the following examples, the “Licensed Product” used in the
calculations is referred to as the “FPA008 Product,” meaning a Licensed Product
that contains FPA008.

 

For purposes of the following examples, The “BMS Combined Product” used in the
calculations is Nivolumab. The examples assume Nivolumab has received Marketing
Approval for use in combination with the FPA008 Product in the relevant country,
which for purposes of this example is Japan.

 

The calculations below would be performed for each applicable accounting period
for which Net Sales is being determined (e.g., each Calendar Quarter) in each
applicable country where (i) there are Net Sales of the relevant Licensed
Product, which include discounted sales and (ii) there are Net Sales of the
relevant BMS Combined Product approved for use in combination with such Licensed
Product, which include discounted sales.

 

Weighted-Average Percentage Basis Discount Calculation for BMS Combined Product

 

For one form of product:

 

For purposes of the following examples, assume that Nivolumab is sold in only
one form and concentration in Japan, is packaged in vials, and the gross selling
price of one vial of Nivolumab is $2800 in Japan, before any discounts.

 

BMS sells 50,000 vials of Nivolumab to Third Parties in Japan in the applicable
Calendar Quarter. If no discounts were applied, the total gross selling price in
such Calendar Quarter in Japan would equal $140 million.

 

BMS offers discounts on Nivolumab. With respect to the sales of Nivolumab during
the applicable Calendar Quarter in Japan, BMS granted, allowed, or incurred $28
million in total discounts.

 

The “Weighted-Average Percentage Basis Discount” on Nivolumab sold in Japan for
the Calendar Quarter therefore equals:

 

$28 million / $140 million x 100% = 20%

 

If BMS elects to discount sales of the FPA008 Product in Japan, for purposes of
the calculation of Net Sales, 20% is the maximum discount that could apply to
calculating such Net Sales of the FPA008 Product in Japan for the applicable
Calendar Quarter, calculated as in “Weighted-Average Percentage Basis Discount
Calculation for Licensed Product” below.

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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For multiple forms of product:

 

In the event that the BMS Combined Product is sold in multiple forms (e.g., two
or more types of vials with differing concentrations) then the calculation of
the Weighted-Average Percentage Basis Discount on such BMS Combined Product
shall be performed on each such form of the BMS Combined Product sold in the
relevant country separately, and the lowest calculated Weighted-Average
Percentage Basis Discount shall prevail.

 

For example, assume BMS also sold a more concentrated vialed form of Nivolumab
in Japan than the form of Nivolumab that, in the previous example, had a
Weighted-Average Percentage Basis Discount of 20%.

 

BMS would perform the calculation above again for such more concentrated vialed
form. If the result of such calculation were 23% for the more concentrated
vialed form, then final Weighted-Average Percentage Basis Discount for Nivolumab
in Japan in the applicable Calendar Quarter would remain 20%. If the result of
such calculation were 19% for the more concentrated vialed form, then the final
Weighted-Average Percentage Basis Discount for Nivolumab in Japan in the
applicable Calendar Quarter would be 19%.

 

Weighted-Average Percentage Basis Discount Calculation for Licensed Product

 

For purposes of the following examples, assume that the FPA008 Product is sold
in only one form and concentration in Japan, is packaged in vials, and the gross
selling price of one vial of the FPA008 Product is $2500 in Japan, before any
discounts.

 

Assume the calculations above produced a final Weighted-Average Percentage Basis
Discount for Nivolumab of 20%.

 

BMS sells 40,000 vials of the FPA008 Product in Japan in the applicable Calendar
Quarter. If no discounts were applied, the total gross selling price in such
Calendar Quarter in Japan would be $100 million.  

 

When BMS makes permitted deductions under clauses (c), (d) and (e) of the
definition of “Net Sales,” the maximum amount that would be permitted to be
deducted for discounts granted, allowed, or incurred, with respect to sales of
the FPA008 Product in Japan in the applicable Calendar Quarter, equals:

 

$100 million x 20% = $20 million

 

For example, if BMS actually granted, allowed, or incurred $30 million in
discounts on the FPA008 Product sold in Japan for the relevant Calendar Quarter,
BMS shall not deduct $30 million for such discounts, but may deduct the $20
million as calculated above. If BMS actually granted, allowed, or incurred $10
million in discounts on the FPA008 Product sold in Japan for the relevant
Calendar Quarter, then BMS may deduct the $10 million for such discounts.

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

--------------------------------------------------------------------------------

 

 

 

*** INDICATES MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT WAS
REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.

 

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Confidential

 

 

Exhibit I: Potential Countries

 

***

 

 

*** INDICATES ONE PAGE OF MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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Confidential

 

Schedule 4.3(k): Five Prime Responsibilities for Current Combination Trial

 

(i)packaging and labeling the vials provided by BMS of any Licensed Product or
BMS Pipeline Asset for use in the performance of the Current Combination Trial,
and (C) providing the relevant Working Group designated by the JDC on a monthly
basis with a clinical drug supply forecast for the applicable Licensed Product
or BMS Pipeline Asset that includes a strategy for drug supply overages, drug
supply quantity and required delivery dates;

(ii)with the cooperation of BMS, compiling, amending and filing all necessary
Regulatory Materials for the Current Combination Trial with Regulatory
Authority(ies), maintaining and acting as the sponsor of record as provided in
21 CFR 312.50 (and applicable comparable ex-US laws) with responsibility, unless
otherwise delegated in accordance with 21 CFR 312.52 (and applicable comparable
ex-US laws), for the Current Combination Trial and making all required
submissions to Regulatory Authorities related thereto on a timely basis;

(iii)with BMS cooperation, and subject to the provisions of Article 9, listing
any activities that are required to be listed on a public database on
www.clinicaltrials.gov or other public registry in any country in which the
Current Combination Trial is being conducted in accordance with applicable Law
and in accordance with BMS’s internal policies relating to clinical trial
registration;

(iv)drafting and providing to BMS (through the JDC or relevant Working Group)
for its review, each protocol and investigator’s brochure(s) (if distinct from
the investigator’s brochure(s) already being used under the Development Plan)
for the Current Combination Trial, and the related template ICF, template
clinical site agreement, bioanalysis plan and statistical analysis plan, and any
amendments to each of the foregoing;

(v)coordinating with BMS and providing to the JDC (or the relevant Working
Group) five (5) Business Days in advance of submission, drafts of any Regulatory
Materials, or portions thereof, that relate to a Licensed Product or Nivolumab,
for review and approval, and providing BMS with the opportunity to review and
comment on all other written correspondence with a Regulatory Authority relating
to the Current Combination Trial, to the extent such correspondence relates to a
Licensed Product or Nivolumab, and to approve such written correspondence;

(vi)managing the operations of the Current Combination Trial, including
overseeing compliance by any CRO with the terms of its agreement with Five Prime
relating to the Current Combination Trial;

(vii)providing to BMS a list of all proposed clinical trial sites and principal
investigator(s) for the Current Combination Trial;

(viii)providing BMS with copies of each final site template ICF (if requested by
BMS);

*** INDICATES TWO PAGES OF MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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(ix)providing BMS with minutes from any and all external drug safety monitoring
boards for the Current Combination Trial, if applicable, within two (2) Business
Days (or as soon as practicable) after receipt by Five Prime;

(x)providing BMS with updates on the status of the Current Combination Trial
upon BMS’s reasonable request, including information regarding the number and
status of study sites, the number of screened subjects (actual to target), the
number of randomized subjects (actual to target), the number of dosed, ongoing,
discontinued and completed subjects, and any safety updates as contemplated by
the JDC and/or routinely performed by Five Prime in its normal course of trial
management and reporting;

(xi)providing BMS with access to all safety information (including any updates
to the investigator’s brochure for the Licensed Product) in the safety databases
through the provision of case safety reports and listings related to the
Licensed Product or a BMS Pipeline Asset during the Current Combination Trial in
accordance with the Pharmacovigilance Agreement;

(xii)analyzing the data from the Current Combination Trial in a timely fashion
and providing BMS with access to such data as follows:

(1)pursuant to an appropriate timetable determined by the JDC: (A) sharing with
BMS for review and comment drafts of interim and/ or final clinical trial
reports (and/or statistical analyses in accordance with the statistical analysis
plan) from the Current Combination Trial and (B) providing the raw study data in
electronic or other agreed format;

(2)within ten (10) Business Days after database lock, access to safety databases
that will be used for an interim review by an external consultant (or drug
safety monitoring board, if required) to be agreed upon by the Parties;

(3)within ten (10) Business Days after database lock, access to case report
forms or patient profiles for all patients in the Current Combination Trial;

(4)within sixty (60) days of the creation of a clean database for the Current
Combination Trial, copies of the Form 1572s, financial disclosures and other
relevant documents required to meet regulatory requirements related to the
Current Combination Trial (including any data or documents that may be required
to provide safety information to a Regulatory Authority with respect to a BMS
Pipeline Asset);

(5)within five (5) Business Days of the creation of an electronic clean database
for the Current Combination Trial, an electronic copy of the clean database (it
being understood that the form and format of the clean database must be
reasonably acceptable to both Parties and shall be determined by the JDC); and

*** INDICATES ONE PAGE OF MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

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(6)providing BMS with any programs or SAS codes to be used for the statistical
analysis plan for the Current Combination Trial;

(xiii)obtaining supplies of any co-medications, to the extent any such
co-medications are required for use in the Current Combination Trial, and
providing to BMS any information related to the Current Combination Trial that
is provided to the manufacturer of any co-medication within five (5) Business
Days after the provision of the information to the manufacturer;

(xiv)providing BMS with any relevant information regarding the pharmacokinetics,
efficacy and safety of a BMS Pipeline Asset alone or in combination with a
Licensed Product; and

(xv)such other responsibilities as may be agreed to by the Parties.

*** INDICATES ONE PAGE OF MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

--------------------------------------------------------------------------------

Schedule 5.1: Inventory Allocation

***

 

*** INDICATES ONE PAGE OF MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

 

--------------------------------------------------------------------------------

Confidential

 

Schedule 5.2: Planned Costs for FPA008 Manufacture

 

***

*** INDICATES TWO PAGES OF MATERIAL THAT WAS OMITTED AND FOR WHICH CONFIDENTIAL
TREATMENT WAS REQUESTED. ALL SUCH OMITTED MATERIAL WAS FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.