instruction:
In this task, you're given a passage that represents a legal contract or clause between multiple parties. Your job is to write questions that ask the basic details corresponding to the legal contracts or clauses. Avoid questions that can be answered correctly without actually understanding the paragraph, and which might have multiple answers. The answer to each question should be unambiguous.
question:
Exhibit 10.2

EXECUTION COPY

***Text Omitted and Filed Separately with the Securities and Exchange Commission Confidential Treatment Requested Under 17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

Collaboration Agreement

This Agreement is entered into with effect as of the Effective Date (as defined below)

by and between

F. Hoffmann-La Roche Ltd

with an office and place of business at Grenzacherstrasse 124, 4070 Basel, Switzerland (Roche Basel)

and

Hoffmann-La Roche Inc.

with an office and place of business at 150 Clove Road, Suite 8, Little Falls, New Jersey 07424, U.S.A. (Roche US; Roche Basel and Roche US together referred to as Roche)

on the one hand

and

Foundation Medicine, Inc.

with an office and place of business at 150 Second Street, Cambridge, Massachusetts 02141 (FMI)

on the other hand.





Table of Contents   1. Definitions   7  1.1 Affiliate   7  1.2 Agreement   7  1.3 Agreement Term   7  1.4 [...***...] ctDNA [...***...]   7  1.5 Applicable Law   7  1.6 Approved Assay   7  1.7 Background IP   7  1.8 Business Day   8  1.9 Calendar Half   8  1.10 Calendar Quarter   8  1.11 Calendar Year   8  1.12 CDx   8  1.13 CDx Development Program   8  1.14 CLIA   8  1.15 Clinical Study   9  1.16 Commercially Reasonable Efforts   9  1.17 Confidential Information   9  1.18 Control   9  1.19 Cover  10  1.20 ctDNA  10  1.21 ctDNA Assay  10  1.22 ctDNA Platform  10  1.23 ctDNA Platform Development Program  10  1.24 ctDNA Working Group  10  1.25 Data Security Breach  10  1.26 Effective Date  10  1.27 Excepted Activities  11  1.28 Excluded Patent Rights  11  1.29 FDA  11  1.30 FDCA  11  1.31 FMI Background IP Patent Rights  11  1.32 FMI Decisions  11  1.33 FMI Development Costs  11  1.34 FMI Know-How  11  1.35 FMI Foreground Patent Rights  12  1.36 FTE  12  1.37 FTE Rate  12  1.38 Handle  12  1.39 HSR  12  1.40 Immunotherapy Testing Platform Development Program  12  1.41 Immuno-Platform Working Group  12  1.42 Initiation  12  1.43 Insolvency Event  12  1.44 Invention  13  1.45 IUO  13  1.46 JMC  13  1.47 JOC  13  1.48 Joint Know-How  13  1.49 Joint Patent Rights  13    ***Confidential Treatment Requested***

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1.50 JOT  13  1.51 JRDC  13  1.52 Know-How  13  1.53 Molecular Information Platform Program  13  1.54 Molecular Information Platform Working Group  14  1.55 Party  14  1.56 Patent Rights  14  1.57 Performance Specifications  14  1.58 Personal Data  14  1.59 Phase I Study  14  1.60 Phase II Study  14  1.61 Phase III Study  14  1.62 PMA  15  1.63 Quality Standards  15  1.64 R&D Plan  15  1.65 Regulatory Approval  15  1.66 Regulatory Authority  15  1.67 Roche Background IP Patent Rights  15  1.68 Roche Group  15  1.69 Roche Know-How  15  1.70 Roche Foreground Patent Rights  15  1.71 ROW Territory  15  1.72 RUO  15  1.73 Study Data  16  1.74 Sublicensee  16  1.75 Territory  16  1.76 Third Party  16  1.77 US  16  1.78 US$  16  1.79 Work Stream  16  1.80 Additional Definitions  16  2. Grant of License  18  2.1 Licenses  18  2.2 Sublicense  20  2.3 Right to Subcontract  20  3. Research and Development Collaboration  20  3.1 Molecular Information Platform Program  20  3.2 Immunotherapy Testing Platform Development Program  23  3.3 ctDNA Platform Development Program  25  3.4 CDx Development Program  27  3.5 Samples, Handling and Disposal  29  3.6 Records; Reports; Audits  30  4. Diligence  31  5. Most Favored Customer  31  6. Governance  31  6.1 Joint Management Committee  31  6.2 JRDC  33  6.3 JOC  34  6.4 Alliance Director  34  6.5 Limitations of Authority  34  6.6 Expenses  35  6.7 Lifetime  35    - 3 -





7. Regulatory   35  8. Payment   35  8.1 FTE Funding   35  8.2 Molecular Information Platform Program Fees   35  8.3 Immunotherapy Testing Platform Development Budget and Fees   36  8.4 ctDNA Platform Financial Terms   37  8.5 CDx Development Financial Terms   38  8.6 General Terms   38  8.7 Disclosure of Payments   39  9. Accounting and reporting   39  9.1 Timing of Payments   39  9.2 Late Payment   39  9.3 Method of Payment   39  10. Taxes   39  11. Auditing   40  11.1 Right to Audit   40  11.2 Audit Reports   41  11.3 Over or Underpayment   41  11.4 Duration of Audit Rights   41  12. Intellectual Property   41  12.1 Ownership of Inventions, data and results   41  12.2 German Statute on Employee's Inventions   43  12.3 Prosecution and Maintenance of Patent Rights Claiming FMI Inventions   43  12.4 Prosecution and Maintenance of Roche Foreground Patent Rights and Joint Patent Rights   44  12.5 Joint Patent Team   44  12.6 CREATE Act   44  12.7 Infringement   44  12.8 Defense   46  12.9 Common Interest Disclosures   46  13. Representations and Warranties   47  13.1 Mutual Representations and Warranties   47  13.2 Activities   48  13.3 Safety Data   48  13.4 Third Party Patent Rights   48  13.5 Inventors   48  13.6 Grants   48  13.7 Ownership and Validity of Know-How   48  13.8 Data Protection (Privacy) and Security   48  13.9 No Other Representations   50  14. Indemnification   50  14.1 Indemnification by Roche   50  14.2 Indemnification by FMI   51  14.3 Procedure   51  15. Liability   51  16. Obligation Not to Disclose Confidential Information   51  16.1 Non-Use and Non-Disclosure   51  16.2 Permitted Disclosure &sbsp;52  16.3 Press Releases   52  16.4 Publications   52  16.5 Commercial Considerations   53    - 4 -





17. Term and Termination  53  17.1 Commencement and Term  53  17.2 Termination  53  17.2.1 Termination for Breach  53  17.2.2 Insolvency  53  17.2.3 Termination by Roche without Cause  54  17.2.4 Termination by Roche for Frustration of Purpose  54  17.3 Consequences of Termination  54  17.3.1 Termination in General  54  17.3.2 Termination by FMI for Breach by Roche or Roche's Insolvency; Termination by Roche Without Cause or for Frustration of Purpose  54  17.3.3 Termination by Roche for Breach by FMI or FMI Insolvency  56  17.3.4 Direct License  57  17.4 Other Obligations  57  17.5 Survival  57  18. Bankruptcy  57  19. Miscellaneous  58  19.1 Governing Law  58  19.2 Disputes  58  19.3 Arbitration  58  19.4 Assignment  59  19.5 Debarment and Exclusion  59  19.6 Independent Contractor  60  19.7 Unenforceable Provisions and Severability  60  19.8 Waiver  60  19.9 Appendices  60  19.10 Entire Understanding  61  19.11 Amendments  61  19.12 Invoices  61  19.13 Notice  61    - 5 -





Collaboration Agreement

WHEREAS, FMI has or is developing platforms for use in genomic testing, including development of a molecular information platform, an immunotherapy testing platform, a circulating tumor DNA platform, and a companion diagnostics platform; and

WHEREAS, Roche has expertise in the research, development, manufacture and commercialization of pharmaceutical and diagnostic products, including development of an immunotherapy platform; and

WHEREAS, Roche and FMI want to collaborate on the development of platforms for use in molecular information, immunotherapy, circulating tumor DNA, companion diagnostics, and in vitro diagnostic tests and kits; and

WHEREAS, Roche Holdings, Inc., an Affiliate of Roche, and FMI are concurrently herewith entering into a Transaction Agreement dated as of the date hereof (as it may be amended from time to time, the Transaction Agreement) which provides, among other things, for Roche to acquire a majority ownership of FMI upon the terms and subject to the conditions set forth in the Transaction Agreement; and

WHEREAS, in connection therewith, and as an inducement to Roche's and FMI's willingness to enter into the Transaction Agreement and to consummate the transactions contemplated thereby, FMI and Roche agree that Roche will work with FMI in the United States to educate relevant persons on next generation sequencing and/or comprehensive genomic profiling technology (US Education Collaboration Agreement), Roche and FMI will collaborate on the commercialization of certain FMI products outside of the United States (Ex-US Commercialization Agreement), and Roche and FMI may collaborate on development and commercialization of decentralized in vitro diagnostic (IVD) versions of FMI tests generated by FMI (IVD Collaboration), the above mentioned agreements, including the Transaction Agreement, being referred to collectively as the Related Agreements; and

WHEREAS, FMI and Roche intend that assays and other products generated under this Agreement will be commercialized in accordance with the Ex-US Commercialization Agreement and that the governance structure under this Agreement will apply to the US Education Collaboration Agreement and the Ex-US Commercialization Agreement.   - 6 -





NOW, THEREFORE, in consideration of the mutual covenants and promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, do hereby agree as follows:

  1. Definitions

As used in this Agreement, the following terms, whether used in the singular or plural, shall have the following meanings:

  1.1 Affiliate

The term Affiliate shall mean any individual, corporation, association or other business entity that directly or indirectly controls, is controlled by, or is under common control with the Party in question. As used in this definition of Affiliate, the term control shall mean the direct or indirect ownership of more than fifty percent (>50%) of the stock having the right to vote for directors thereof or the ability to otherwise control the management of the corporation or other business entity whether through the ownership of voting securities, by contract, resolution, regulation or otherwise. Anything to the contrary in this paragraph notwithstanding, Chugai Pharmaceutical Co., Ltd, a Japanese corporation (Chugai), shall not be deemed an Affiliate of Roche unless Roche provides written notice to FMI of its desire to include Chugai as an Affiliate of Roche. Moreover, FMI and its Affiliates existing as of the Effective Date shall not be deemed Affiliates of Roche and its Affiliates existing as of the Effective Date, and Roche and its Affiliates existing as of the Effective Date shall not be deemed Affiliates of FMI and its Affiliates existing as of the Effective Date. Affiliates coming into existence after the Effective Date shall be classified by the Parties as either Roche Affiliates or FMI Affiliates for the purposes of this Agreement.

  1.2 Agreement

The term Agreement shall mean this document including any and all appendices and amendments to it as may be added and/or amended from time to time in accordance with the provisions of this Agreement.

  1.3 Agreement Term

The term Agreement Term shall mean the period of time commencing on the Effective Date and, unless this Agreement is terminated sooner as provided in Article 17, expiring on the date when all work has been completed or terminated under all R&D Plans.

  1.4 […***…] ctDNA […***…]

The term […***…] ctDNA […***…] shall mean an analytical validated clinical ctDNA Assay […***…].

  1.5 Applicable Law

The term Applicable Law shall mean any law, statute, ordinance, code, rule or regulation that has been enacted by a government authority (including without limitation, any Regulatory Authority) and is in force as of the Effective Date or comes into force during the Agreement Term, in each case to the extent that the same are applicable to the performance by the Parties of their respective obligations under this Agreement.

  1.6 Approved Assay

The term Approved Assay means any assay or test intended for use in the diagnosis or evaluation of a disease or condition, excluding any IUO, and with respect to which any necessary Regulatory Approval is received in the relevant country, including PMA approval in the US, if applicable.

  1.7 Background IP

The term Background IP shall mean all intellectual property rights, including Patent Rights and Know-How, Controlled by a Party as of the Effective Date and all intellectual property rights Controlled by a Party after the Effective Date but arising from activities other than the activities conducted under this Agreement. Roche Background IP specifically excludes the Excluded Patent Rights and no licenses are granted to FMI under such Excluded Patent Rights.   ***Confidential Treatment Requested***

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1.8 Business Day

The term Business Day shall mean 9.00am to 5.00pm local time on a day other than a Saturday, Sunday or bank or other public or federal holiday in Switzerland, New Jersey or Massachusetts.

  1.9 Calendar Half

The term Calendar Half shall mean each period of six (6) consecutive calendar months, ending June 30 and December 31.

  1.10 Calendar Quarter

The term Calendar Quarter shall mean each period of three (3) consecutive calendar months, ending March 31, June 30, September 30 and December 31.

  1.11 Calendar Year

The term Calendar Year shall mean the period of time beginning on January 1 and ending December 31, except for the first Calendar Year which shall begin on the Effective Date and end on December 31.

  1.12 CDx

The term CDx shall mean any Products or Services that require Regulatory Approval, including by any medical device Regulatory Authority, under the device authorities of the Federal Food, Drug, and Cosmetic Act (or equivalent medical device or in vitro diagnostic medical device regime in other countries) for use in connection with a decision to treat, or the specifics of the actual treatment, of person, with a specific product, as more fully described below:

  (i) identifying a person having a specific disease or condition, or a molecular genotype or phenotype that predisposes a person to such disease or condition, to support a decision to treat such person with such specific product, whether for prophylactic or therapeutic purposes;

  (ii) defining the prognosis or monitoring the progress of a disease or condition in a person to support a decision to treat, or tocontinue to treat, such person with such specific product, whether for prophylactic or therapeutic purposes;

  (iii) supporting the selection of a particular therapeutic or prophylactic regimen, wherein at least one (1) potential therapeutic orprophylactic regimen involves the use of such specific product; and/or

  (iv) confirming such specific product's biological activity and/or optimizing dosing or the scheduled administration of such specificproduct.

  1.13 CDx Development Program

The term CDx Development Program shall mean the program for development by FMI of CDx Assays for select Roche products.

  1.14 CLIA

The term CLIA shall mean Clinical Laboratory Improvement Amendments as set forth by the Centers for Medicare & Medicaid Services which regulates all laboratory testing (except research) performed on humans in the U.S. and is certified by the Division of Laboratory Services, within the Survey and Certification Group, under the Center for Clinical Standards and Quality.   - 8 -





1.15 Clinical Study

The term Clinical Study shall mean a Phase I Study, Phase II Study, Phase III Study, as applicable.

  1.16 Commercially Reasonable Efforts

The term Commercially Reasonable Efforts shall mean, with respect to the performance of an obligation under this Agreement, such quality and level of effort as is required to carry out such obligation in a sustained manner, consistent with the efforts Roche or FMI, as applicable, devotes to a similar obligation in connection with an internally developed product or service that is at the same stage of development or commercialization, as applicable, in a similar market, with similar market potential, at a similar stage of product life, taking into account the existence of other competitive products or services in the market place or under development, the proprietary position of the product or service, the regulatory structure involved, the anticipated profitability of the product or service and other relevant factors. It is understood that such quality and level if effort may change from time to time based upon changing scientific, business and marketing and return on investment considerations.

  1.17 Confidential Information

The term Confidential Information shall mean any and all information, data or know-how (including Know-How), whether technical or non- technical, oral or written, that is disclosed by one Party or its Affiliates (Disclosing Party) to the other Party or its Affiliates (Receiving Party). Confidential Information shall not include any information, data or know-how that:

  (i) was generally available to the public at the time of disclosure, or information that becomes available to the public after disclosureby the Disclosing Party other than through fault (whether by action or inaction) of the Receiving Party or its Affiliates,

  (ii) can be evidenced by written records to have been already known to the Receiving Party or its Affiliates prior to its receipt fromthe Disclosing Party,

  (iii) is obtained by the Receiving Party at any time lawfully from a Third Party under circumstances permitting its use or disclosure,

  (iv) is developed independently by the Receiving Party or its Affiliates as evidenced by written records other than throughknowledge of Confidential Information, or

  (v) is approved in writing by the Disclosing Party for release by the Receiving Party.

The terms of this Agreement shall be considered Confidential Information of the Parties.

  1.18 Control

The term Control shall mean (as an adjective or as a verb including conjugations and variations such as Controls Controlled or Controlling) (a) with respect to Patent Rights and/or Know-How, the possession by a Party of the ability to grant a license or sublicense of such Patent Rights and/or Know-How as provided herein without violating the terms of any agreement or arrangement between such Party and any other party, where such ability derives from rights other than an assignment or license granted herein and (b) with respect to proprietary materials, the possession by a Party of the ability to supply such proprietary materials to the other Party as provided herein without violating the terms of any agreement or arrangement between such Party and any other party.   - 9 -





1.19 Cover

The term Cover shall mean (as an adjective or as a verb including conjugations and variations such as Covered, Coverage or Covering) that the developing, making, using, offering for sale, promoting, selling, exporting or importing of a given product would infringe a valid claim under the Patent Rights. As used in the previous sentence, valid claim means, with respect to a particular country a claim in an issued and unexpired patent that has not lapsed or been disclaimed, revoked, held unenforceable, unpatentable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed fo appeal and that has not been admitted to be invalid or unenforceable through re-examination, re-issue, disclaimer or otherwise, or lost in an interference proceeding.

  1.20 ctDNA

The term ctDNA shall mean circulating tumor DNA.

  1.21 ctDNA Assay

The term ctDNA Assay shall mean an assay developed on or utilizing FMI's ctDNA Platform (including instruments and software) for the detection of genomic alteration in ctDNA, including an RUO, IUO and Approved Assay.

  1.22 ctDNA Platform

The term ctDNA Platform shall mean Products or Services for testing of specimens to identify genomic alterations in ctDNA as a blood-based liquid biopsy, including FMI instruments, analytical methods, algorithms, procedures, techniques, software or platforms, intended for use in genomic analysis, and related technologies and any improvements to the foregoing, in each case Controlled by FMI as of the Effective Date or during the Agreement Term.

  1.23 ctDNA Platform Development Program

The term ctDNA Platform Development Program shall mean the program for development of ctDNA analysis platform by FMI for effective genomic profiling from liquid biopsy.

  1.24 ctDNA Working Group

The term ctDNA Working Group shall mean the group of persons from both Parties who will handle the day-to-day activities associated with the ctDNA Platform Development Program a set forth herein.

  1.25 Data Security Breach

The term Data Security Breach means (a) the disclosure or misuse (by any means) of Personal Data; (b) the inadvertent, unauthorized and/or unlawful processing, access, disclosure, alteration, corruption, transfer, sale or rental, destruction or use of Personal Data; or (c) any other act or omission that compromises the security, confidentiality, and/or integrity of Personal Data.

  1.26 Effective Date

The term Effective Date shall mean the latest of (a) the date of the last signature of this Agreement, or (b) if a HSR filing is made, the second Business Day immediately following the earlier of: (i) the date upon which the waiting period under HSR expires or terminates early or (ii) the date upon which all requests to the Parties by the Federal Trade Commission or the Justice Department, as the case may be, with regard to the transaction contemplated by this Agreement   - 10 -





have been satisfactorily met and no objection on the part of the Federal Trade Commission or the Justice Department remains, or (c) the occurrence of the Acceptance Time (as defined in the Transaction Agreement).

  1.27 Excepted Activities

The term Excepted Activities shall mean […***…].

  1.28 Excluded Patent Rights

The term Excluded Patent Rights shall mean those Patent Rights listed in Appendix 1.28.

  1.29 FDA

The term FDA shall mean the Food and Drug Administration of the United States of America.

  1.30 FDCA

The term FDCA shall mean the Food, Drug and Cosmetics Act.

  1.31 FMI Background IP Patent Rights

The term FMI Background IP Patent Rights means Patent Rights that Cover Background IP that is Controlled by FMI.

  1.32 FMI Decisions

The term FMI Decisions shall mean decisions with respect to any of the following issues that come before the JMC:

  (i) […***…].

  (ii) […***…].

  (iii) […***…].

  (iv) […***…].

  1.33 FMI Development Costs

The term FMI Development Costs means all costs reasonably incurred or committed to by FMI to perform its obligations and activities hereunder, including without limitation, (i) personnel costs equal to the number of FTE's used to perform such obligations and activities multiplied by the FTE Rate, (ii) out-of-pocket costs for consultants, materials and services and (iii) facilities costs reasonably allocated to performance of such obligations and activities, including acquisition, maintenance and operation costs for such facilities.

  1.34 FMI Know-How

The term FMI Know-How shall mean the Know-How that FMI Controls at the Effective Date and during the Agreement Term.   ***Confidential Treatment Requested***

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1.35 FMI Foreground Patent Rights

The term FMI Foreground Patent Rights shall mean the Patent Rights that FMI Controls and that Cover Inventions conceived of and reduced to practice after the Effective Date in the performance of the activities under this Agreement, excluding any Joint Patent Rights and any FMI Background IP Patent Rights.

  1.36 FTE

The term FTE shall mean a full-time equivalent person-year, based upon a total of no less than one thousand eight hundred (1,800) working hours per year, undertaken in connection with the conduct of research in a Work Stream. In no circumstance can the work of any given person exceed one (1) FTE.

  1.37 FTE Rate

The term FTE Rate shall mean the amount of […***…], on a fully burdened cost basis, which amount shall be subject to increase following the […***…] anniversary of the Effective Date by an amount equal to the increase in the Consumer Price Index as published by the U.S. Department of Labor, Bureau of Labor Statistics (the CPI) between the Effective Date and such date for a new FTE Rate not to exceed […***…] per FTE, and which such new FTE Rate shall be subject to subsequent increases upon the date of each renewal or extension period comprising the Agreement Term by an amount equal to the increase in the CPI as of such date.

  1.38 Handle

The term Handle shall mean all activities associated with prosecution and maintenance of a particular patent and patent application(s) derived from such patent, including preparing, filing, prosecuting and maintaining (including interferences, reissue, re-examination, pre- and post-grant proceedings, inter-parties reviews, derivation proceedings, applications for patent term adjustment and extensions, supplementary protection certificates and oppositions and other similar proceedings).

  1.39 HSR

The term HSR shall mean the Hart-Scott-Rodino Antitrust Improvements Act.

  1.40 Immunotherapy Testing Platform Development Program

The term Immunotherapy Testing Platform Development Program shall mean the program for development of an immunotherapy testing platform.

  1.41 Immuno-Platform Working Group

The term Immuno-Platform Working Group shall mean the group of persons from both Parties who will handle the day-to-day activities associated with the Immunotherapy Testing Platform Development Program.

  1.42 Initiation

The term Initiation&1148; shall mean the date that a human is first dosed with the drug in a Clinical Study approved by the respective Regulatory Authority.

  1.43 Insolvency Event

The term Insolvency Event shall mean circumstances under which a Party (i) has a receiver or similar officer appointed over all or a material part of its assets or undertaking; (ii) passes a resolution for winding-up (other than a winding-up for the purpose of, or in connection with, any solvent amalgamation or reconstruction) or a court makes an order to that effect or a court makes an order for administration (or any equivalent order in any jurisdiction); (iii) enters into   ***Confidential Treatment Requested***

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any composition or arrangement with its creditors (other than relating to a solvent restructuring); (iv) ceases to carry on business; (v) is unable to pay its debts as they become due in the ordinary course of business.

  1.44 Invention

The term Invention shall mean an invention that is made, i.e. conceived and reduced to practice, in performance of activities under this Agreement. Under this definition, an Invention may be made by solely by individuals having an obligation to assign rights in such invention to FMI (an FMI Invention), solely by individuals having an obligation to assign rights in such invention to Roche (a Roche Invention), or jointly by individuals having an obligation to assign rights in such invention to FMI and individuals having an obligation to assign rights in such invention to Roche (a Joint Invention).

  1.45 IUO

The term IUO shall mean an assay for investigational use only that meets certain clinical and manufacturing standards and which is used in clinical studies to gather data for submission to a Regulatory Agency in support of an Approved Assay.

  1.46 JMC

The term JMC shall mean the joint management committee described in Article 6.

  1.47 JOC

The term JOC shall mean the joint operating committee as mentioned in Section 6.3 and described in the Ex-US Commercialization Agreement.

  1.48 Joint Know-How

The term Joint Know-How shall mean Know-How that is made jointly by the Parties or their Affiliates or their Sublicensees in performance of activities carried out pursuant to this Agreement.

  1.49 Joint Patent Rights

The term Joint Patent Rights shall mean all Patent Rights Covering a Joint Invention.

  1.50 JOT

The term JOT shall mean a joint operating team described in Section 6.1.7.

  1.51 JRDC

The term JRDC shall mean the joint research and development committee described in Section 6.2.

  1.52 Know-How

The term Know-How shall mean data, knowledge, algorithms, business rules and information, including manufacturing data, toxicological data, pharmacological data, preclinical data, formulations, specifications, quality control testing data, which are necessary or useful for the discovery, manufacture, development or commercialization of Products and Services.

  1.53 Molecular Information Platform Program

The term Molecular Information Platform Program shall mean the program designed to generate insights for certain of Roche's clinical development portfolio from FMI's molecular information platform, comprised of tumor sample genomic analysis, database access, and dedicated FMI clinical and genomic expertise.

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1.54 Molecular Information Platform Working Group

The term Molecular Information Platform Working Group shall mean the group of persons from both Parties who will handle the day-to-day activities associated with the Molecular Information Platform Program.

  1.55 Party

The term Party shall mean FMI or Roche, as the case may be, and Parties shall mean FMI and Roche collectively.

  1.56 Patent Rights

The term Patent Rights shall mean all rights under any patent or patent application, in any country of the Territory, including any patents issuing on such patent application, and further including any substitution, extension or supplementary protection certificate, reissue, reexamination, renewal, division, continuation or continuation-in-part of any of the foregoing.

  1.57 Performance Specifications

The term Performance Specifications shall mean a set of minimum standards and specifications related to FMI's supply and delivery of Products and Services under this Agreement as set forth in the R&D Plans for each Work Stream or Task Orders, including standards with respect to classes of alterations detected and sequencing sensitivity and specificity (based on tissue requirements); provided, however, the Performance Specifications for the Molecular Information Platform Program are attached hereto as Exhibit 1.57.

  1.58 Personal Data

The term Personal Data shall mean any information that can be used to identify, locate or contact an individual (a Data Subject), including but limited to, (a) first name or initial and last name; (b) home or other physical address; (c) telephone number; (d) email address or online identifier associated with the individual; (e) social security number or other similar identifier; (f) employment financial or health information; or (g) any other information relating to an individual that is combined with any of the above.

  1.59 Phase I Study

The term Phase I Study shall mean a human clinical trial in any country that would satisfy the requirements of 21 C.F.R. § 312.21(a) (FDCA), as amended from time to time, and the foreign equivalent thereof.

  1.60 Phase II Study

The term Phase II Study shall mean a human clinical trial, for which the primary endpoints include a determination of dose ranges and/or a preliminary determination of efficacy in patients being studied as described in 21 C.F.R. § 312.21(b) (FDCA), as amended from time to time, and the foreign equivalent thereof.

  1.61 Phase III Study

The term Phase III Study shall mean a human clinical trial that is prospectively designed to demonstrate statistically whether a product is safe and effective for use in humans in a manner sufficient to obtain regulatory approval to market such product in patients having the disease or condition being studied as described in 21 C.F.R. § 312.21(c) (FDCA), as amended from time to time, and the foreign equivalent thereof.

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1.62 PMA

The term PMA shall mean a premarket approval application as defined under section 515 of the FDCA.

  1.63 Quality Standards

The term Quality Standards shall mean CLIA or QSR requirements, each as applicable, and other Applicable Laws. If requested by Roche, the JRDC will establish which such quality standards specifically apply to Products and Services within a given Work Stream.

  1.64 R&D Plan

The term R&D Plan shall mean a plan of research and development for each Work Stream other than the Molecular Information Platform Program. The initial R&D Plans are attached as Appendix 1.64 and outline the work expected to be performed by FMI for the relevant Work Stream. Such plans may be updated from time to time as provided in this Agreement.

  1.65 Regulatory Approval

The term Regulatory Approval shall mean any approvals, licenses, registrations, authorizations, or certifications by Regulatory Authority or any CE markings, necessary for the manufacture, sale or putting into service of a product in a regulatory jurisdiction in the Territory.

  1.66 Regulatory Authority

The term Regulatory Authority shall mean any national, supranational (e.g., the European Commission, the Council of the European Union, the European Medicines Agency), regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity including the FDA, in each country involved in the granting of Regulatory Approval for a product or service.

  1.67 Roche Background IP Patent Rights

The term Roche Background IP Patent Rights means Patent Rights that Cover Background IP that is Controlled by Roche.

  1.68 Roche Group

The term Roche Group shall mean collectively Roche, its Affiliates and its Sublicensees, excluding FMI and FMI Affiliates.

  1.69 Roche Know-How

The term Roche Know-How shall mean all Know-How that Roche Controls during the Agreement Term.

  1.70 Roche Foreground Patent Rights

The term Roche Foreground Patent Rights shall mean the Patent Rights that Roche Controls (other than through licenses granted under this Agreement) and that Cover Inventions conceived of and reduced to practice after the Effective Date in the performance of the activities under this Agreement, excluding any Joint Patent Rights and the Excluded Patent Rights.

  1.71 ROW Territory

The term ROW Territory shall mean […***…].

  1.72 RUO

The term RUO shall mean an assay intended or approved for research use only.   ***Confidential Treatment Requested***

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1.73 Study Data

The term Study Data shall mean all data related to any Data Subject collected by or transferred to the Roche Group or business partners, in connection with any services that FMI may provide to Roche.

  1.74 Sublicensee

The term Sublicensee shall mean an entity to which Roche or FMI, as applicable, has licensed rights (through one or multiple tiers), other than through a Compulsory Sublicense, pursuant to this Agreement.

  1.75 Territory

The term Territory shall mean […***…].

  1.76 Third Party

The term Third Party shall mean a person or entity other than (i) FMI or any of its Affiliates or (ii) a member of the Roche Group.

  1.77 US

The term US shall mean the United States of America and its territories and possessions.

  1.78 US$

The term US$ shall mean US dollars.

  1.79 Work Stream

The term Work Stream shall mean each of the Molecular Information Platform Program, Immunotherapy Testing Platform Development Program, the ctDNA Platform Development Program, and the CDx Development Program.

  1.80 Additional Definitions

Each of the following definitions is set forth in the Section of this Agreement indicated below:   Definition   Section AAA   19.3 Accounting Period   9.1 Advanced Genomic Analyses   3.1.4 Alliance Director   6.2 Approved Markers   3.4.1 Assessment   10 Bankruptcy Code   18 Binding Orders   3.1.5 Biomarker IP   2.1.2 Breaching Party   17.2.1 CDx Assays   3.4.1 CDx Platform Working Group   3.4.2 Chairperson   6.1.1 Competent Authority Procedures   10 ctDNA Milestone Date   8.4 Create Act   12.6 Database Renewal Term   3.1.9 Database Queries   3.1.8   ***Confidential Treatment Requested***

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Definition   Section Data Subject   1.57 Decision Period   12.5 Disclosing Party   1.17 Ex-US Collaboration Agreement   Whereas Clause First ctDNA Milestone Date   8.4 FMI CDx IP   12.1.5 FMI-Derived Advanced Genomic Analysis Results   3.1.8 FMI Improvement IP   12.1.2 FMI Invention   1.44 Immuno-Biomarker Discovery Platform   3.2.1 Immuno-Clinical Study Assays   0 Immunotherapy Exclusivity Period   3.2.8 Immunotherapy Testing Platform Development Budget   8.3.1 Genomic Analyses   3.1.4 Indemnified Party   14.3 Indemnifying Party   14.3 Initial Roche ctDNA Assay   8.4 Initiating Party   12.5 Investigational Markers   3.4.1 IVD Collaboration   Whereas Clause Joint Invention   1.44 Materially Modified   8.3.2(i) Members   6.1.1 Molecular Information Database   3.1.8 Molecular Information Database Access   3.1.8 Non-Breaching Party   17.2.1 Payment Currency   9.3 Peremptory Notice Period   17.2.1 Products and Services   7 Profiling Renewal Term   3.1.9 Profiling Term   3.1.9 Publishing Notice   16.4 Publishing Party   16.4 Receiving Party   1.17 Related Agreements   Whereas Clause Reserved Capacity   3.1.4 Reserved Capacity Fees   8.2.1.1 Roche CDx Development IP   12.1.5 Roche ctDNA Sample Results   12.1.4 Roche Immunotherapy Sample Results   12.1.3 Roche Improvement IP   12.1.2 Roche Invention   1.44 Roche-Owned Advanced Genomic Analysis Results   12.1.2 Roche's Jurisdiction   10 Sample Profiling   3.1.4   - 17 -





Definition   Section Sample Results   3.1.6 Second ctDNA Milestone Date   8.4 Settlement   12.5 Signature Identification   3.2.1 Suit Notice   12.5 Task Orders   3.1.3 TPP   6.1.5.2 Transaction Agreement   Whereas Clause US Education Collaboration Agreement   Whereas Clause

  2. Grant of License

2.1 Licenses

  2.1.1 Research and Development Cross License

Each Party grants to the other Party during the time that a Work Stream is in effect, a non-exclusive right and license under Know-How and Patent Rights, including the Background IP, Controlled by such Party and that are necessary or useful solely to enable the other Party to perform the activities contemplated under this Agreement; […***…].

    2.1.2 Molecular Information Platform Licenses

Roche hereby grants to FMI a non-exclusive, royalty-free, worldwide and perpetual license, sublicensable to FMI's Affiliates, under any intellectual property rights arising directly from the Sample Results, or the correlation of the Sample Results to patient data (Biomarker IP) (i) to the extent such Biomarker IP becomes publicly known, for internal research purposes, (ii) to the extent such Biomarker IP becomes publicly known, to develop, make, have made, use, offer for sale, sell, import, and commercialize FMI's Products and Services relating to genomic analysis, and (iii) […***…].

Roche hereby grants to FMI a non-exclusive, royalty-free, worldwide and perpetual license, sublicensable to Affiliates, to use the Roche-Owned Advanced Genomic Analysis Results to develop, make, have made, use, offer for sale, sell, import and commercialize FMI's products and services relating to genomic analysis.

FMI hereby grants to Roche a non-exclusive, royalty-free, worldwide and perpetual license, sublicensable to Roche's Affiliates under any FMI Improvements for Roche's internal research purposes and to develop, make, have made, use, offer for sale, sell, import and commercialize Roche's products and services other than diagnostic products and services.

    2.1.3 Immunotherapy Testing Platform Licenses

Effective after the Immunotherapy Exclusivity Period, Roche hereby grants to FMI a non-exclusive, royalty-free, worldwide, perpetual, and sublicensable to Affiliates, license to any intellectual property arising from the Immunotherapy Testing Platform Development Program Controlled by Roche (excluding Roche Immunotherapy Sample Results) to the extent necessary   ***Confidential Treatment Requested***

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for FMI to develop, make, have made, use, offer for sale, sell, import and commercialize the Immuno-Biomarker Discovery Platform, Signature Identification services, Clinical Study assays, CDx assays, or any other FMI testing or services (including that are part of the Genomic Analysis Platform).

FMI hereby grants to Roche a non-exclusive, royalty-free, worldwide, perpetual, and sublicensable license to any intellectual property arising from the Immunotherapy Testing Platform Program Controlled by FMI for internal research purposes and to the extent necessary for Roche to research, develop, make, have made, use, offer for sale, sell, import and commercialize Roche products other than diagnostic products.

If FMI is unable or unwilling to develop and commercialize an Immuno Clinical Study assay or CDx assay resulting from the Immunotherapy Testing Platform Development Program in a given country within the Territory as specified in an R&D Plan for any reason other than a breach of this Agreement by Roche, and on the timeline agreed to in such R&D Plan, then, effective on the end of the timeline specified in such R&D Plan, FMI hereby grants to Roche a non-exclusive, royalty-free, perpetual, and sublicensable license under any intellectual property invented by FMI arising from the Immunotherapy Testing Platform Program or the Immunotherapy Testing Platform Development that is necessary for Roche to develop and commercialize such tests in such country in the Territory.

    2.1.4 ctDNA Licenses

FMI hereby grants to Roche (i) an exclusive, royalty-free, sublicensable, worldwide and perpetual license to any intellectual property rights arising from the ctDNA Development Platform Program that are necessary for Roche to develop, make, have made, use, offer for sale, sell, import and commercialize Roche products other than diagnostic products (including the use, formulation, methods of treatment, clinical data or other data, information or results relating to the Roche therapeutic product) solely for use in connection with such activities and such Roche products and (ii) a non-exclusive, royalty-free, worldwide and perpetual license, with the right to grant sublicenses solely to Roche Affiliates, to any intellectual property rights arising from the ctDNA Development Platform Program, for internal research purposes.

Roche hereby grants to FMI a non-exclusive, royalty-free, worldwide, perpetual, and sublicensable license to any IP Controlled by Roche and developed under the ctDNA Platform Development Program (excluding Roche Immunotherapy Sample Results) to the extent necessary for FMI to research, develop, make, have made, use, offer for sale, sell, import and commercialize the ctDNA Assays.

    2.1.5 CDx Development Program

FMI hereby grants to Roche a non-exclusive license under the FMI CDx IP for internal research purposes, and to the extent necessary to research, develop, make, have made, use, offer for sale, sell, import and commercialize Roche products other than diagnostic products.

If FMI is unwilling or unable to develop and commercialize a CDx Assay for a given country in the Territory as specified in the R&D Plan, and on the timeline set forth in the relevant R&D Plan, for any reason other than a breach of this Agreement by Roche, then FMI hereby grants to Roche a non-exclusive, royalty-free, sublicensable, and perpetual license under any intellectual property invented by FMI arising from the CDx Development Program that is necessary for Roche to develop and commercialize a CDx Assay equivalent in such country in the Territory.   - 19 -





2.2 Sublicense

Except as otherwise provided herein, where the right to sublicense is granted under this Agreement, the licensee shall have the right to sublicense, and subcontract (subject to Section 2.3), through multiple tiers. Each sublicense granted hereunder to a Third Party shall be pursuant to a written agreement. Each sublicense granted hereunder by a Party shall include restrictions on the disclosure of the other Party's Confidential Information that are substantially similar to the protections provided herein. Each Party shall be liable for any action or failure to act by a sublicensee under a sublicense granted by such Party to the extent such action or failure to act on the part of such Party would constitute a breach of this Agreement by such Party.

  2.3 Right to Subcontract

Each Party shall have the right to subcontract the work performed under this Agreement in accordance with the applicable R&D Plan. Each such subcontract with a Third Party shall be pursuant to a written agreement. Each such subcontract by a Party shall include restrictions on the disclosure of the other Party's Confidential Information that are substantially similar to the protections provided herein. Each Party shall be liable for any action or failure to act by a subcontractor under a subcontract entered into by such Party to the extent such action or failure to act on the part of such Party would constitute a breach of this Agreement by such Party.

  3. Research and Development Collaboration

3.1 Molecular Information Platform Program

  3.1.1 Scope

Roche and FMI shall conduct the Molecular Information Platform Program pursuant to this Agreement under the direction of the Molecular Information Platform Working Group.

    3.1.2 Molecular Information Platform Working Group

The Parties shall establish the Molecular Information Platform Working Group within sixty (60) days after the Effective Date to operationalize the Molecular Information Platform Program. The Molecular Information Platform Working Group's activities will be overseen by JRDC.

    3.1.3 Task Orders

The Parties will conduct the Molecular Information Platform Program in accordance with agreed upon task orders (Task Orders) and in compliance with Performance Specifications and Quality Standards. Each Task Order will be substantially in the form set forth in Appendix 3.1.3. To the extent any terms set forth in a Task Order conflict with the terms set forth in this Agreement, the terms of this Agreement shall control.

    3.1.4 Sample Profiling and Reserved Capacity

FMI shall provide, and shall reserve capacity to provide, Roche with comprehensive profiling, analysis and reporting (Sample Profiling) of at least […***…] during the first […***…] immediately following the Effective date, and at least […***…] samples during the next […***…]   ***Confidential Treatment Requested***

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(Reserved Capacity) using FMI's platform for molecular genomic profiling of cancer samples (the Genomic Analysis Platform). The initial laboratory and computational biology activities performed on the Samples as part of Sample Profiling are Genomic Analyses. FMI will provide Sample Profiling in accordance with the Reserved Capacity during the Profiling Term and Profiling Renewal Term, using the then-current versions of the tests included in its Genomic Analysis Platform. The Sampling Profiles shall be provided in a specified format to be mutually agreed by the Parties. The JMC will discuss and decide upon the Reserved Capacity commitment for Profiling Renewal Terms, provided that any Reserved Capacity amount in excess of […***…] that would require FMI to increase its existing capacity will require FMI approval.

Sample Profiling will include advanced genomic analyses, i.e. advanced laboratory and computational biology activities in the field of cancer genomic sequencing and analysis performed on Samples, including […***…] (collectively, Advanced Genomic Analyses). Sample Profiling includes Genomic Analyses and Advanced Genomic Analyses.

FMI may adopt modifications to the Performance Specifications without Roche's consent, so long as such modifications do not result in a material diminution in the analytical performance of the Genomic Analysis Platform as measured by the metrics set forth in Appendix 1.57 (which such material diminution would require the prior written consent of Roche). In the event […***…], and such change results in a material diminution in the analytical performance of the Genomic Analysis Platform as measured by the metrics set forth in Appendix 1.57, Roche may, at its election, and upon written notice to FMI, terminate each Party's obligations under Reserved Capacity, including Roche's obligations under Section 8.2.1.1 to pay Reserved Capacity Fees and opt out of the price per Sample fees for Sample Profiling otherwise specified in Section 8.2.1.2, in each case, from the effect of such sequencing platform change. If Roche elects to terminate the Parties' obligations under Reserved Capacity and opts out of the per Sample pricing for Sample Profiling specified in Section 8.2.1.2, Sample Profiling shall then be performed, and fees for such Sample Profiling shall then be charged, on a per Sample basis at FMI's standard rates or on pricing terms to be mutually agreed in writing by the Parties (or as otherwise mutually agreed in writing by the Parties).

    3.1.5 Forecasting and Binding Orders

Not later than the first Business Day of […***…] during the Profiling Term and Profiling Renewal Terms, Roche will provide FMI with a rolling forecast of its estimated requirements for Sample Profiling for the following […***…], the rolling forecast for the […***…] of which shall be deemed to be a binding order for sample volume (including specifications for the number of samples to be run using each of FMI's different tests) (Binding Orders). Binding Orders will not impact FMI's commitment to provide services for at least the Reserved Capacity amount, and Roche's financial commitment to pay the Reserved Capacity Fee. FMI shall use Commercially Reasonable Efforts to fulfill requests for Sample Profiling exceeding the Reserved Capacity based on forecasts provided by Roche (each a Forecast) in advance of […***…] as specified below.

    3.1.6 Samples, Sample Results, Web-Portal

Roche will provide samples to FMI for Sample Profiling as provided for in Section 3.5. The results of the Sample Profiling (Sample Results) shall be provided by FMI to Roche in a timeframe to be agreed upon by the Parties. A sample report is attached as Appendix 3.1.6.   ***Confidential Treatment Requested***

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FMI will set up and utilize a basic web-portal for Roche to access Sample Results and patient reports for Roche Clinical Studies. This web-portal shall be similar to the portal that FMI provides to its other major pharmaceutical customers.

    3.1.7 Clinical Reports

FMI will provide Roche with clinical (e.g., FoundationOne® or FoundationOne® Heme) reports from Sample Profiling on reasonable request, to be specified in applicable Task Orders, to enable Roche to provide comprehensive information to physicians and patients.

    3.1.8 Database Insights

FMI will provide molecular information insights (Database Insights) arising from FMI's database of aggregated clinical genomic analysis results, which include genomic alterations (base substitutions, insertions and deletions, copy number alterations, and rearrangements) detected by the Genomic Analysis Platform across FMI's clinical testing experience in all disease ontologies (the Molecular Information Database), in response to queries supplied by Roche (Database Queries) or generated by FMI in response to discussions between the Parties about areas of interest for Roche (e.g., […***…]), utilizing a team of […***…] FMI FTEs with requisite training and experience to generate Database Insights (Molecular Information Database Access).

Database Insights and results of Advanced Genomic Analyses performed against the Molecular Information Database (which, for clarity, does not include Roche's Sample Results) (FMI-Derived Advanced Genomic Analysis Results) shall be deemed FMI Confidential Information. Roche and its Affiliates may use the Database Query Results and FMI-Derived Advanced Genomic Analysis Results for all purposes, except that Roche may not disclose the Database Query Results to Third Parties, other than as necessary for development, approval or commercialization of a therapeutic or diagnostic product owned or controlled by Roche, or as otherwise consistent with the terms of confidentiality contained in the Definitive Agreement.

    3.1.9 Molecular Information Database Access

As set forth in Section 3.1.8, FMI will provide Roche mediated (indirect through dedicated FMI FTEs) access to the Molecular Information Database to pose Database Queries and will provide the resulting Database Insights to Roche in a format to be mutually agreed by the Parties. FMI will also provide Roche with direct access to the Molecular Information Database for Roche to perform Database Queries and generate Database Insights, when such service is made available to Third Parties by FMI in the ordinary course of business.

    3.1.10 Duration and Extension

The term for Sample Profiling set forth in Section 3.1.4 shall commence on the Effective Date and continue for five (5) years thereafter (the Profiling Term). The Profiling Term may be extended at Roche's option, upon […***…] written notice to FMI as specified in Section 19.13, for additional three (3) year periods, during any period of time in which Roche is a majority shareholder of FMI (each a Profiling Renewal Term).

The term for Database Insights under Section 3.1.8 shall commence on the Effective Date and continue for five (5) years thereafter (the Database Insights Term). The Database Insights   ***Confidential Treatment Requested***

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Term may be extended at Roche's option, upon […***…] notice to FMI as specified in Section 19.13, for additional three (3) year periods, during any period of time in which Roche is a majority shareholder of FMI (each a Database Renewal Term).

During any Profiling Renewal Term and/or Database Renewal Term, if FMI increases the fees it charges to Third Parties for Sample Profiling and/or Database Insights, then FMI will notify Roche of such adjustment(s), and the Parties shall agree upon the fees to be charged to Roche during the Profiling Renewal Term and/or Database Renewal Term, subject to Article 5, for such Profiling Renewal Term and/or Database Renewal Term prior to its commencement.

If FMI is unable to provide Roche with the Reserved Capacity, or to provide Roche with deliverables meeting Performance Specifications for the Sample Profiling or the Database Queries or fails to comply with Quality Standards, then Roche will have the right to terminate the Sample Profiling and/or Database Insights, as applicable, as set forth in Section 17.3.3, subject to the notice and cure provisions therein.

  3.2 Immunotherapy Testing Platform Development Program

  3.2.1 Scope

Roche and FMI shall conduct the Immunotherapy Testing Platform Development Program pursuant to a mutually agreed R&D Plan under the direction of the Immuno-Platform Working Group. The purpose of the Immunotherapy Testing Platform Development Program is to develop an immunotherapy testing platform meeting the specifications set forth by the Immuno-Platform Working Group for profiling of cancer immunotherapy patients (the Immuno-Biomarker Discovery Platform). The Parties hope to further deploy the platform for use in Clinical Study sample profiling to identify possible signatures for immunotherapy response (Signature Identification). Roche may also, at its option, request that FMI develop CLIA immunotherapy testing Clinical Study assays for use in selecting or differentiating patients in Roche Clinical Studies in immuno-oncology (Immuno-Clinical Study Assays).

    3.2.2 Immuno-Platform Working Group

The Parties shall establish the Immuno-Platform Working Group within sixty (60) days after the Effective Date to operationalize the Immunotherapy Testing Platform Development. The Immuno-Platform Working Group's activities will be overseen by JRDC.

The Immuno-Platform Working Group shall serve as a forum for discussion and sharing updates and information between the Parties, but shall have no decision-making authority. The Immuno-Platform Working Group shall:

(i) serve as a forum for discussing the development of the Immuno-Biomarker Discovery Platform and related Products and Services, as well as Immuno-Clinical Study Assays, if applicable;

(ii) serve as a forum for coordinating the Parties' efforts to carry out the R&D Plan;

(iii) periodically monitor progress of activities under the R&D Plan and discuss any obstacles or delays with regard to achieving the timelines set forth therein;   ***Confidential Treatment Requested***

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(iv) discuss the overall strategy, including the submission plans, for obtaining and maintaining Regulatory Approval of any of the Products and Services developed in the Immunotherapy Testing Platform Development Program; and

(v) such other responsibilities as may be assigned to the Immuno-Platform Working Group in or pursuant to this Agreement or as may be mutually agreed by the Parties in writing.

    3.2.3 R&D Plan

The Parties will conduct the Immunotherapy Testing Platform Development Program in accordance with an R&D Plan and in compliance with Performance Specifications and Quality Standards. Unless decided otherwise by the JMC, the R&D Plan will be updated […***…] by the Immuno- Platform Working Group, reviewed and recommended for approval by the JRDC and approved by the JMC. The R&D Plan will set forth (i) the scope of the Immunotherapy Testing Platform Development Program and the FTE resources that will be dedicated to the activities contemplated within the scope of the Immunotherapy Testing Platform Development Program, including the responsibilities of each Party (ii) an overall timeline and specific objectives for each year, which objectives will be updated or amended, as appropriate, by the JRDC as research progresses, and (iii) budgets for such activities. The Parties shall update the R&D Plan no later than […***…] before the first anniversary of the Effective Date. The JRDC shall review the R&D Plan on an ongoing basis and may amend the R&D Plan. Any such changes shall be reflected in written amendments to the R&D Plan.

    3.2.4 Responsibilities of the Parties

FMI will work with Roche in accordance with the R&D Plan to develop the Immuno-Biomarker Discovery Platform, perform Signature Identification, and, as requested by Roche, develop Immuno Clinical Study Assays. Except for the contracts listed on Appendix 3.2.4, the Parties will meet and discuss existing contracts for activities that are Excepted Activities, and enact a plan for winding-down such contracts, where appropriate.

Roche will work with FMI in accordance with the R&D Plan established by the Immuno-Platform Working Group, including by providing relevant samples and associated data, immuno-oncology expertise, and bioinformatics support, in each case to the extent agreed to in the R&D Plan.

    3.2.5 Budget

A budget for the anticipated work for the Immunotherapy Testing Platform Development forms a part of the R&D Plan. Any changes to this budget shall be reviewed by the JRDC and then submitted to the JMC for approval.

    3.2.6 Duration

The initial term of the Immunotherapy Testing Platform Development Program will be five (5) years beginning on the Effective Date.

    3.2.7 Extension

Roche shall have the right to extend the Immunotherapy Testing Platform Development Program, upon [...***...] written notice to FMI as specified in Section 19.13, for up to six (6)   ***Confidential Treatment Requested***

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additional one (1) year periods, during any period of time in which Roche is a majority shareholder of FMI (each a Signature Identification Renewal Term), provided, for clarity, that during any Signature Identification Renewal Term, FMI's obligations under Section 16.1 shall continue to apply to any signature identified under this Agreement but that exclusivity under Section 3.2.8 shall not apply to the Immuno-Biomarker Discovery Platform.

    3.2.8 Exclusivity

Except for Excepted Activities, for the lesser of (i) […***…] after the Effective Date or (ii) […***…] (the Immunotherapy Exclusivity Period), FMI will work exclusively with Roche with respect to […***…]. Except with regard to Excepted Activities, FMI will not (i) work directly or indirectly with any Third Party in the field of […***…], (ii) use for the benefit of any Third Party the […***…] or (iii) transfer to or otherwise enable any Third Party to make use of any data, technology or results from the Immunotherapy Testing Platform Development Program for […***…].

Following the Immunotherapy Exclusivity Period, FMI shall have the right to work with Third Parties in the field of cancer immunotherapy, and to otherwise commercialize the Immuno-Biomarker Discovery Platform, subject to the Related Agreements.

    3.2.9 Excepted Activities

For any Excepted Activities, FMI shall provide copies of proposed publications Roche for review in accordance with Section 16.4.

    […***…]

For the first […***…] following commercial launch by FMI of any Immuno Clinical Study Assay(s) created during or derived from the Immunotherapy Testing Platform Development, Roche and its Affiliates will be entitled to […***…], for the purchase of any such Immuno Clinical Study Assay(s).

  3.3 ctDNA Platform Development Program

  3.3.1 Scope

Roche and FMI shall conduct the ctDNA Platform Development Program, pursuant to a mutually agreed R&D Plan under the direction of the ctDNA Working Group. The purpose of the ctDNA Platform Development Program is to develop ctDNA Assays meeting the specifications set forth in the R&D Plan.

    3.3.2 Working Group

The Parties shall establish the ctDNA Working Group within sixty (60) days after the Effective Date to operationalize the ctDNA Platform Development. The ctDNA Working Group's activities will be overseen by JRDC.   ***Confidential Treatment Requested***

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The ctDNA Working Group shall serve as a forum for discussion and sharing updates and information between the Parties, but shall have no decision-making authority. The ctDNA Working Group shall:

  (i) serve as a forum for discussing the development of the ctDNA Platform and ctDNA Products;

  (ii) serve as a forum for coordinating the Parties' efforts to carry out the R&D Plan;

  (iii) periodically monitor progress of activities under the R&D Plan and discuss any obstacles or delays with regard to achieving thetimelines set forth therein;

  (iv) discuss the overall strategy, including the submission plans, for obtaining and maintaining Regulatory Approval of any of thectDNA Products; and

  (v) such other responsibilities as may be assigned to the ctDNA Working Group in or pursuant to this Agreement or as may bemutually agreed by the Parties in writing.

    3.3.3 R&D Plan

FMI will develop the ctDNA Assays, leveraging ongoing efforts, in accordance with the R&D Plan and in compliance with Performance Specifications and Quality Standards. Unless decided otherwise by the JMC, the R&D Plan will be updated […***…] by the ctDNA Working Group, reviewed and recommended for approval by the JRDC and approved by the JMC. The R&D Plan will set forth (i) the scope of the ctDNA Platform Development Program and the FTE resources that will be dedicated to the activities contemplated within the scope of the ctDNA Platform Development Program, including the responsibilities of each Party (ii) an overall timeline and specific objectives for each year, which objectives will be updated or amended, as appropriate, by the JRDC as research progresses, and (iii) budgets for such activities. The Parties shall update the R&D Plan no later than […***…] before the first anniversary of the Effective Date. The JRDC shall review the R&D Plan on an ongoing basis and may amend the R&D Plan subject to approval of the JMC. Any such changes shall be reflected in written amendments to the R&D Plan.

    3.3.4 Responsibilities of the Parties

FMI shall, subject to all terms and conditions of this Agreement, use Commercially Reasonable Efforts to Develop the Initial Roche ctDNA Assay and the ALK ctDNA Clinical Trial Assay in accordance with the R&D Plan. FMI will work with Roche in accordance with the R&D Plan to develop ctDNA Assays.

Roche will work with FMI in accordance with the R&D Plan, including by providing relevant Samples and associated data, in each case to the extent agreed to in the R&D Plan.

Roche assumes no liability for use of the Genomic Analyses obtained from Samples provided under this Agreement, except as and to the extent arising out of a breach by Roche of this Agreement.   - 26 -





  3.3.5 Budget

FMI will have sole control over, and responsibility for, the budget and funding for the anticipated work for the ctDNA Platform Development under the R&D Plan.

    3.3.6 Duration

The initial term of the ctDNA Platform Development Program will be twelve (12) months.

    3.3.7 Extension

The initial term of the ctDNA Platform Development Program may be extended by the mutual agreement of the Parties.

    […***…]

For the […***…] following commercial launch by FMI of any ctDNA Assay(s) created during or derived from the ctDNA Platform Development, Roche and its Affiliates will be entitled to […***…], for the purchase of any such ctDNA Assay(s).

    3.3.9 Commercialization

Subject to the Related Agreements, FMI shall have the right to commercialize the ctDNA Assays. The ctDNA Assays may be made commercially available to any customer, except that FMI shall not disclose to an Third Party the specific content of any ctDNA Assay developed specifically for Roche for use as a Clinical Study assay.

  3.4 CDx Development Program

  3.4.1 Scope

Roche and FMI shall conduct the CDx Development Program pursuant to a mutually agreed R&D Plan. The activities conducted in connection with the CDx Development Program will be overseen by the JRDC. The purpose of the CDx Development Program is to develop certain companion diagnostic tests or assays (the CDx Assays) for use in connection with certain Roche products. Such CDx Assays may include those developed at Roche's request in connection with markers that have not yet been approved by the FDA for the particular tumor type/indication for which Roche is developing the relevant therapeutic (Investigational Markers) and those developed by mutual agreement of the Parties in connection with markers that are included in one or more assays approved by the FDA for the particular tumor type/indication to indicate use of a Roche therapeutic (Approved Markers).

    3.4.2 Working Group

For each CDx Assay under development, the Parties shall establish a working group (the CDx Platform Working Group), to operationalize the CDx Development. The Parties shall establish the first CDx Platform Working Group within sixty (60) days after the Effective Date. Each CDx Platform Working Group's activities will be overseen by JRDC.   ***Confidential Treatment Requested***

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The CDx Platform Working Group shall serve as a forum for discussion and sharing updates and information between the Parties, but shall have no decision-making authority. The CDx Platform Working Group shall:

(i) serve as a forum for discussing the development of CDx Assays and related Products and Services;

(ii) serve as a forum for coordinating the Parties' efforts to carry out the R&D Plan;

(iii) periodically monitor progress of activities under the R&D Plan and discuss any obstacles or delays with regard to achieving the timelines set forth therein;

(iv) discuss the overall strategy, including the submission plans, for obtaining and maintaining Regulatory Approval of any of the Products and Services developed in the CDx Development Program; and

(v) such other responsibilities as may be assigned to the CDx Platform Working Group in or pursuant to this Agreement or as may be mutually agreed by the Parties in writing.

    3.4.3 R&D Plan

The Parties will conduct the CDx Development Program in accordance with the R&D Plan and in compliance with Performance Specifications and Quality Standards. Unless decided otherwise by the JMC, the R&D Plan will be updated […***…] by the CDx Platform Working Group, reviewed and recommended for approval by the JRDC and approved by the JMC. The R&D Plan will set forth (i) the scope of the CDx Development Program and the resources that will be dedicated to the activities contemplated within the CDx Development Program, including the responsibilities of each Party (ii) specific objectives for each year, which objectives will be updated or amended, as appropriate, by the JRDC as research progresses, and (iii) budgets for such activities. The Parties shall prepare a plan for activities to be conducted no later than […***…] before the first anniversary of the Effective Date. The JMC shall review the R&D Plan on an ongoing basis and may amend the R&D Plan. Any such changes shall be reflected in written amendments to the R&D Plan.

    3.4.4 Responsibilities of the Parties

FMI will provide CDx development and testing services, including, as required by the R&D Plan, providing FDA QSR laboratory capacity to support such testing. The CDx services will be based on individual CDx R&D Plans for specific Roche assets that will be agreed upon, signed by the Parties and thereby made a part of this Agreement as Appendices 3.4.4(a), 3.4.4(b) and so on. All CDx services will be performed with appropriate systems and documentation to support eventual FDA approval of a PMA or 510(k) or, if agreed by the Parties, approval from the relevant regulatory authorities for an ROW Territory in which FMI will deliver a CDx Assay for Roche therapeutics.

FMI will be responsible for performing the development work for the CDx Assays according to the individual CDx R&D Plans. Unless otherwise expressly agreed between the Parties, FMI will be responsible for seeking regulatory approval (including PMAs, 510(k)s or equivalent) for the CDx Assays. FMI will provide Roche with cross-reference letters, and shall otherwise coordinate regulatory submissions and related information, with Roche.   - 28 -





Roche is responsible for supplying FMI with the information and materials necessary for each CDx Assay to be developed under the CDx Development Program in accordance with the R&D Plan. Roche will be solely responsible for seeking regulatory approval for the associated Roche asset. Roche will provide FMI with cross-reference letters, and shall otherwise coordinate regulatory submissions and related information with FMI.

    3.4.5 Budget

Roche and FMI shall agree on a budget for each CDx Assay. The initial budget forms a part of the initial R&D Plan.

    3.4.6 Duration

The term of the CDx Development Program shall be five (5) years.

    3.4.7 Extension

Roche shall have the right to extend the term of the CDx Development Program, upon […***…] prior written notice to FMI as specified in Section 19.13, for additional three (3) year periods, during any period of time in which Roche is a majority shareholder of FMI.

    3.4.8 Continuing Obligations

If work under an individual CDx R&D Plan is initiated during the initial term of the CDx Development Program or an extension thereof, then such work shall be completed as set forth in the applicable individual CDx R&D Plan after the initial term or extension, as applicable, in accordance with the terms set forth therein and herein (including with respect to funding obligations).

    3.4.9 Commercialization

Subject to the Related Agreements, FMI shall have the right to commercialize the CDx Assays.

  3.5 Samples, Handling and Disposal

  3.5.1 Samples

Roche will provide samples to FMI that meet the FMI specimen requirements attached hereto as Appendix 3.5.1 and in accordance with the applicable R&D Plan. FMI shall not transfer the Samples or other materials obtained or received in connection with this Agreement, or any derivatives thereof, to any Third Party without Roche's prior written approval. FMI shall use the Samples and material obtained or received in connection with this Agreement solely for the performance of activities permitted under this Agreement in FMI's laboratories under suitable containment conditions in accordance with all Applicable Law. FMI shall not analyze the Samples other than as expressly provided for in this Agreement. FMI may use such Samples in accordance with the applicable R&D Plan without any obligation of compensation to the subjects from whom such Samples were obtained or any other Third Party for the intellectual property associated with, or any use of, such Samples.   ***Confidential Treatment Requested***

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  3.5.2 Sample Handling and Disposal

All Samples provided to FMI by or on behalf of Roche shall have been collected or shall be collected, handled, and transferred in compliance with Applicable Law and any applicable policies of any institutional review board, privacy board, or ethics committee with jurisdiction over the collection, handling, and transfer of such material or information. Upon termination of the Agreement or the Work Stream requiring the use of the Samples, or upon completion of those activities requiring use of the Samples, FMI shall promptly return to Roche unused or remaining Samples, or, at FMI's option, securely dispose of all unused or remaining Samples and provide Roche with a written notice of such disposal.

Roche has authorization and all consents required for FMI to use the Samples in accordance with the R&D Plans and the Agreement. FMI shall use, store and handle all Samples in accordance with the R&D Plans and all Applicable Laws. In the event of withdrawal of a subject's consent, Roche will promptly notify FMI and FMI will destroy the corresponding unused Samples (as documented by written confirmation) or return such Samples to Roche for destruction.

  3.6 Records; Reports; Audits

  3.6.1 Progress Reports

At least […***…] during the time a Work Stream remains in effect, unless otherwise agreed by the Parties, FMI shall have the obligation to prepare and provide to the JRDC a summary presentation on the progress of the work performed by FMI in the course of each Work Stream during the preceding […***…]. Promptly upon expiry of such Work Stream, other than the Molecular Information Platform Program, FMI shall provide a final written report summarizing its activities under such Work Stream and the results thereof.

    3.6.2 Research Records

Each Party shall maintain records of each Work Stream (or cause such records to be maintained), except Roche shall not have such obligation for the Molecular Information Platform Program, in sufficient detail and in good scientific manner as will properly reflect all work done and results achieved by or on behalf of such Party in the performance of such Work Stream. All laboratory notebooks shall be maintained for no less than the term of any Patent Rights issuing therefrom.

In addition, during the Agreement and for […***…] thereafter, FMI shall maintain all data provided to FMI by Roche, the Genomic Results, the FMI Advanced Genomic Analysis Results, Database Insights Database Query Results, and documentation necessary to demonstrate FMI's compliance with the terms of this Agreement, including computerized records and files, in a secure area reasonably protected from fire, theft and destruction; provided, however, that with respect to raw genomic data, FMI shall only be required to retain the original, unprocessed BAM file generated from its sequencing process and no other raw genomic data or intermediate BAM files created in processing to generate the Results.

    3.6.3 Regulatory Inspections and Audit

Roche shall be entitled, upon reasonable notice and during FMI's regular business hours, to visit FMI's facility (and those facilities of its subcontractors), including FMI's CLIA-compliant   ***Confidential Treatment Requested***

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facilities, to audit for quality assurance purposes its facilities, documentation and procedures used in conducting its activities pursuant to this Agreement. Such audits may be conducted up to […***…] and Roche shall use reasonable effort not to disrupt ongoing operations during such audits. FMI shall provide Roche with prompt notice of any governmental or regulatory review, audit or inspection of any of its facilities involved in the development of the Molecular Information Platform, Immunotherapy Testing Platform, ctDNA Platform, or CDx Assays, and all Products and Services resulting therefrom, and FMI's CLIA-compliant facilities. FMI shall provide Roche with (a) the results of any such review, audit or inspection (including a copy of the relevant sections of the report) to the extent such results pertain to any activities under this Agreement; and (b) the opportunity to provide assistance to FMI in responding to any such review, audit or inspection.

  4. Diligence

Roche and FMI shall use Commercially Reasonable Efforts to perform their respective activities contemplated by this Agreement.

  5. Most Favored Customer

FMI agrees that the pricing terms for Products and Services provided by FMI to Roche herein, and services provided under the Molecular Information Platform Program, are, and will be, at least as favorable as the pricing terms granted by FMI to any existing customer or collaborator for such (or substantially similar) products or services. If FMI enters into any subsequent agreement with another customer or collaborator which provides for pricing terms for substantially the same product or services at substantially the same (or a lesser) scale, which pricing terms are more favorable than those contained herein, then FMI shall notify Roche and Roche will have the right to modify this agreement to provide Roche with those more favorable pricing terms. […***…].

  6. Governance

6.1 Joint Management Committee

Within sixty (60) days after the Effective Date, the Parties shall establish a JMC to ensure the smooth operation of the arrangements and activities envisaged under this Agreement.

    6.1.1 Members

The JMC shall be composed of six (6) persons (Members). Roche and FMI each shall be entitled to appoint three (3) Members with appropriate seniority and functional expertise. Each Party may replace any of its Members and appoint a person to fill the vacancy arising from each such replacement. A Party that replaces a Member shall notify the other Party at least ten (10) days prior to the next scheduled meeting of the JMC. Both Parties shall use reasonable efforts to keep an appropriate level of continuity in representation. Both Parties may invite a reasonable number of additional experts and/or advisors to attend part or the whole JMC meeting with prior notification to the JMC. Members may be represented at any meeting by another person designated by the absent Member. One JMC representative from a Party shall chair (Chairperson) the JMC on a rotating annual calendar year basis, with the initial chairperson to be from Roche. The JMC will be made up of senior representatives from FMI and Roche, including alliance directors. The JMC may create and/or dissolve joint teams tasked with oversight of specific programs or projects, subject to overall governance by the JMC. The role of the alliance directors will be to facilitate communication and collaboration between the Parties.   ***Confidential Treatment Requested***

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  6.1.2 Responsibilities of the JMC

The JMC shall have the responsibility and authority to:

a) approve the R&D Plans;

b) establish, disband and set expectations and mandates for JRDC, JOC, JPT and JOTs, if applicable;

c) oversee the JRDC, JOC, JPT and JOTs, if applicable;

d) provide financial oversight for the Immunotherapy Testing Platform Development Program and the CDx Development Program; and

e) attempt to resolve any disputes escalated from the JRDC or JOC.

The JMC shall have no responsibility and authority other than that expressly set forth in this section.

    6.1.3 Meetings

The Chairperson or his/her delegate is responsible for sending invitations and agendas for all JMC meetings to all Members at least ten (10) days before the next scheduled meeting of the JMC. The venue for the meetings shall be agreed by the JMC. The JMC shall hold meetings at least twice per calendar year, either in person or by tele-/video-conference, and in any case as frequently as the Members of the JMC may agree shall be necessary, but not more than four times a year. The Alliance Director of each Party may attend the JMC meetings as a permanent participant.

    6.1.4 Minutes

The Chairperson is responsible for designating a Member to record in reasonable detail and circulate draft minutes of JMC meetings to all members of the JMC for comment and review within twenty (20) days after the relevant meeting. The Members of the JMC shall have ten (10) days to provide comments. The Party preparing the minutes shall incorporate timely received comments and distribute finalized minutes to all Members of the JMC within thirty-five (35) days of the relevant meeting. The Chairperson approves the final version of the minutes before its distribution.

    6.1.5 Decisions

  6.1.5.1 Decision Making Authority

The JMC shall decide matters within its responsibilities set forth in Section 6.1.2.

    6.1.5.2 ctDNA Platform

FMI will have final decision-making rights at the JMC with respect to the ctDNA Platform Development, provided that FMI may not change the timelines agree in Section 8.4, and any change to the Roche specifications (TPP) for a ctDNA Assay specifically requested by Roche as part of the R&D Plan will require Roche's prior approval.   - 32 -





  6.1.5.3 Consensus; Good Faith

The Members of the JMC shall act in good faith to cooperate with one another and seek agreement with respect to issues to be decided by the JMC. The Parties shall endeavor to make decisions by consensus with each Party having one (1) vote.

    6.1.5.4 Failure to Reach Consensus

If the JMC is unable to decide a matter by consensus, then the escalation procedure in Section 6.1.5.5 shall be applied.

    6.1.5.5 Escalation

If the JMC is unable to decide a matter by consensus, then such matter shall be referred to the Chief Executive Officer of FMI or equivalent position or his/her nominee and the Chief Executive Officer of Roche or equivalent position or his/her nominee for resolution, who together shall use reasonable and good faith efforts to reach a decision by consensus within […***…] after the date such matter is referred to them. If the Parties still fail to reach a decision within such […***…]. Any such decision shall constitute a decision of the JMC. Notwithstanding the foregoing, neither Party may exercise deciding authority (i) to impose resource or financial burdens on the other Party for a Work Stream beyond the scope set forth in an agreed upon R&D Plan for such Work Stream or Reserved Capacity under the Molecular Information Platform Program, or (ii) that would violate or amend the terms of this Agreement. The JMC will exist for the Agreement Term.

    6.1.6 Information Exchange

FMI and Roche shall exchange the information in relation to its activities under this Agreement through the JMC and FMI and Roche may ask reasonable questions in relation to the above information and offer advice in relation thereto and Roche shall give due consideration to FMI's input. The JMC may determine other routes of information exchange.

    6.1.7 Subcommittees and Joint Operational Teams

The JMC has the right to establish sub-committees or JOTs. The JRDC shall be established within thirty (30) days after the JMC is established. The JOC shall be established as soon as the JMC deems it necessary.

  6.2 JRDC

The JRDC shall oversee the implementation of the Work Streams and to more generally identify opportunities for value creation in research and development activities between the Parties. The JDRC shall be composed of an equal number of persons from each Party, each person having appropriate seniority and functional expertise. Each Party may replace any a person and appoint another person to fill the vacancy arising from each such replacement. The JRDC will strive to reach consensus on any matters within the committee's authority with each Party having one (1) vote. Unresolved dispute at the JRDC will be escalated to the JMC.

    6.2.1 Responsibilities of the JRDC

The JRDC shall have the responsibility and authority to:

a) recommend the R&D Plans for approval by the JMC;

b) review and recommend for approval any revisions to the R&D Plans;   ***Confidential Treatment Requested***

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c) review and oversee the execution of the R&D Plans;

d) establish timelines and criteria for decision points;

e) determine whether criteria have been met, including whether the criteria as to whether milestones or events have been achieved;

f) review the efforts of the Parties and allocate those resources for the R&D Plans (including their budgets);

g) identify appropriate resources necessary to conduct the R&D Plans;

h) oversee the progress of the Work Streams;

j) monitor the development costs and manage reimbursement for FMI activities under this Agreement;

k) determine for Products and Services Performance Specifications and identify Quality Standards applicable to respective Work Streams; and

l) attempt to resolve any disputes.

The JRDC shall have no responsibility and authority other than that expressly set forth in this section.

  6.3 JOC

The JOC shall plan and oversee the commercial, co-marketing, educational, and/or promotion activities between the Parties and to serve as a forum for communicating generally about FMI's products and strategies for global commercialization, as such activities are further described in the US Education Collaboration Agreement and the Ex-US Commercialization Agreement. The JOC shall be composed of an equal number of persons from each Party, each person having appropriate seniority and functional expertise. A description of the roles, responsibilities, and workings of the JOC are described in the Ex-US Commercialization Agreement. Through the JOC, Roche may share with FMI knowledge and experience related to countries and markets outside the United States, and will support the design and implementation of a global expansion plan for FMI products. The JOC will strive to reach consensus on any matters within the committee's authority, with each Party having one (1) vote. Unresolved disputes at the JOC will be escalated to the JMC.

  6.4 Alliance Director

Each Party shall appoint one person to be the point of contact within each Party with responsibility for facilitating communication and collaboration between the Parties (each, an Alliance Director). The Alliance Directors shall be permanent participants of the JMC meetings (but not members of the JMC) and may attend JDRC, JOC and JOT meetings as appropriate. The Alliance Directors shall facilitate resolution of potential and pending issues and potential disputes to enable the JMC to reach consensus and avert escalation of such issues or potential disputes.

  6.5 Limitations of Authority

No committee, working group or individual shall have the authority to amend or waive any terms of this Agreement.   - 34 -





6.6 Expenses

Each Party shall be responsible for its own expenses including travel and accommodation costs incurred in connection with the JMC.

  6.7 Lifetime

The JMC shall exist during the Agreement Term.

  7. Regulatory

Subject to the Related Agreements, FMI, […***…], shall use Commercially Reasonable Efforts to pursue all regulatory affairs related to its products and services developed under this Agreement (collectively, Products and Services) in the Territory including the preparation, filing and maintenance of applications for regulatory approval, as well as any or all governmental approvals required to develop, have developed, make, have made, use, have used, manufacture, have manufactured, import, have imported, sell and have sold such Products and Services. Subject to the Related Agreements, FMI shall be responsible for pursuing, compiling and submitting all regulatory filing documentation, and for interacting with regulatory agencies, for all Products and Services in all countries in the Territory. Subject to the Related Agreements, FMI or its Affiliates shall own and file in their discretion all regulatory filings and Regulatory Approvals for all Products and Services in all countries of the Territory. FMI shall supply Roche with a copy of all material communications related to Products and Services to or from the Regulatory Authorities. Upon request of Roche, FMI shall supply Roche with a copy of all such communications to or from the Regulatory Authorities.

Subject to the Ex-US Commercialization Agreement, FMI, […***…], shall report to appropriate Redulatory Authorities in accordance with local requirements all adverse events related to use of the Products and Services in the Territory.

  8. Payment

8.1 FTE Funding

Roche will be responsible for funding the FTEs in accordance with the R&D Plans and budgets at the FTE Rate for performance of the research and other activities for which FMI is responsible under the R&D Plans and for the database queries. Each individual included in the funded FTEs shall possess a bachelor's degree or higher in a relevant scientific discipline and shall be experienced in the type of research or other activities to be performed by such individual under this agreement.

  8.2 Molecular Information Platform Program Fees

  8.2.1 Sample Profiling Fees

  8.2.1.1 Reserved Capacity Fees

In consideration for the Reserved Capacity and provision of the Sample Results associated with the Reserved Capacity, and subject to any reduction resulting from the application of Article 5, Roche shall pay to FMI an amount equal to […***…] for […***…] of the Profiling Term [… ***…] for the […***…] of the Profiling Term (Reserved Capacity Fees). The Reserved Capacity Fees are paid as follows:

[…***…] equal installments of […***…] payable within […***…] of receipt by Roche of an invoice from FMI, beginning with receipt by Roche of a first invoice from FMI issued following the Effective Date and followed by […***…] additional invoices at […***…] intervals thereafter.   ***Confidential Treatment Requested***

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[…***…] equal installments of […***…] payable within […***…] of receipt by Roche of an invoice from FMI, beginning […***…] of the Effective Date and followed by […***…] additional invoices at […***…] intervals thereafter.

For renewal terms, the agreed upon Reserved Capacity Fee shall be paid within […***…] of receipt by Roche of an invoice from FMI at […***…] intervals.

The Reserved Capacity Fee payments shall be […***…] against Roche's Binding Order for such period, the amount of the Reserved Capacity Fee being […***…]. Actual Sample Profiling costs, based on delivery of Sample Results during the […***…] to which the Reserved Capacity Fee applies, shall be […***…]. If actual Sample Profiling exceeds the amount of Sample Profiling paid by the Reserved Capacity Fees, then […***…]. Roche shall pay FMI for […***…]. If a Binding Order causes Roche to […***…]. Fees for Binding Orders shall […***…].

    8.2.1.2 Per Sample Profiling Fees

The per Sample Profiling fees (notwithstanding the Reserved Capacity Fee) shall be as follows:

[…***…].

    8.2.2 Molecular Information Database Access and Database Queries Fees

For Molecular Information Database Access and performance of Database Queries by FMI, Roche will pay FMI a total of […***…] of the Database Term, (the Database Access Fee), which is comprised of funding for […***…] FTEs, each at the FTE Rate, for performance of such Database Queries and delivery of Database Insights, and a Database Access Fee of […***…]. Roche shall pay to FMI the Database Access Fee […***…] installments of […***…], each payable every […***…] of the Database term and within […***…] after receipt by Roche of an invoice from FMI.

  8.3 Immunotherapy Testing Platform Development Budget and Fees

  8.3.1 R&D Plan Budget

Roche shall be solely responsible for Roche's costs under the Immunotherapy Testing Platform Development Budget.

Roche will pay FMI […***…] of FMI Development Cost as agreed in the Immunotherapy Testing Platform Budget for development of the Immuno- Biomarker Discovery Platform.

Roche will pay […***…] of FMI Development Cost as agreed in the Immunotherapy Testing Platform Budget for Signature Identification.   ***Confidential Treatment Requested***

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Such reimbursement of FMI Development Cost shall be paid […***…] in arrears. Each […***…], FMI shall invoice Roche for its share of FMI Development Cost incurred in the previous […***…]. Invoices shall be payable within […***…] after receipt by Roche of an invoice from FMI.

    8.3.2 Payments for Achieving Certain Immunotherapy Testing Platform Development Events

In addition to payment of the Immunotherapy Testing Platform Development Budget as specified above, Roche shall pay FMI:

  (i) […***…] on Initiation of the first Roche Clinical Study utilizing a Clinical Study assay, […***…].

  (ii) […***…] on Initiation of the first Roche Clinical Study utilizing a Clinical Study assay, […***…].

  (iii) […***…] on Initiation of the first Roche Clinical Study utilizing a Clinical Study assay, […***…].

    8.3.3 Immuno Clinical Study Assays requested by Roche

Roche will pay […***…] of FMI's Development Costs for development of Immuno Clinical Study Assays as may be requested by Roche, subject to an agreed upon budget for such development as provided for in Section 3.2.5.

    8.3.4 Immunotherapy CDx Assays

If the Parties chose to develop an Immunotherapy CDx Assay, they the Parties shall agree to Roche paying certain costs and milestones for such Immunotherapy CDx assay.

  8.4 ctDNA Platform Financial Terms

FMI will be responsible for all FMI Development Cost for the ctDNA Platform Development. As part of the agreed upon ctDNA R&D Plan, FMI will provide sample testing performed under such ctDNA R&D Plan at no cost to Roche (other than Roche's cost in supplying FMI the Samples specified in the ctDNA R&D Plan).

Roche will pay FMI […***…] if FMI successfully […***…] set forth in the R&D Plan (Initial Roche ctDNA Assay) within […***…] from [… ***…] (the First ctDNA Milestone Date). Payment by Roche shall be made within […***…] after achieving the First ctDNA Milestone Date and the receipt by Roche of an invoice from FMI.

In addition, Roche will pay FMI […***…] if FMI successfully […***…] as agreed to in the R&D Plan; provided that […***…] (the Second ctDNA Milestone Date). Payment by Roche shall be made within […***…] after achieving the Second ctDNA Milestone Date and the receipt by Roche of an invoice from FMI.

The Parties may develop additional ctDNA Assays for use as Clinical Study assays, subject to an agreed financial structure for such work under the R&D Plan. Such additional development work will be conducted, if at all, pursuant to an amendment to this Agreement or a separate written agreement between the Parties.   ***Confidential Treatment Requested***

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8.5 CDx Development Financial Terms

  8.5.1 CDx Development Costs

Roche shall pay FMI […***…] of FMI Development Cost for CDx Development of Investigational markers in compliance with the investigational CDx budget that forms part of the R&D Plan.

FMI shall pay […***…] of the FMI Development Cost for Approved Markers.

Such reimbursement of FMI Development Cost shall be paid […***…] in arrears. Each […***…], FMI shall invoice Roche for its share of the FMI Development Cost incurred in the […***…]. Invoices shall be payable within […***…] after receipt by Roche of an invoice from FMI.

    8.5.2 PMA Event Payments

For each PMA approval corresponding to a Roche product, Roche shall pay FMI […***…], within […***…] after the occurrence of such event and receipt by Roche of an invoice from FMI.

    8.5.3 Commercial Success Event Payments

Roche shall pay FMI the following milestone payments upon achievement of CDx Assay report volumes by tissue type within the first […***…] after […***…] of the associated CDx Assay as specified below:

  (i) CDx Assays Including Investigational/Approved Marker(s) for […***…]:

    […***…].

  (ii) CDx Assays Including Investigational/Approved Marker(s) for […***…]:

    […***…].

Upon achievement of each of the CDx Assay volumes under this Section 8.5.3, FMI shall timely notify Roche and payment shall be made by Roche within […***…] after achieving the applicable event and the receipt by Roche of an invoice from FMI.

In the event the Parties wish to develop another CDx Assay other than those specified above for […***…] and […***…] pursuant to a CDx R&D Plan, the Parties shall mutually agree to […***…] milestones and payments for achieving them.

  8.6 General Terms

All rates and costs set forth herein shall remain firm for the Agreement Term and the services to be performed under each Work Stream, unless otherwise agreed to in writing, shall be at the FTE Rate. FMI has an affirmative obligation to use Commercially Reasonable Efforts to negotiate favorable terms for all FMI Development Cost that will be passed through FMI to Roche. FMI shall extend to Roche the benefit of any and all discounts and savings provided to FMI in connection with FMI Development Cost that will be passed through to Roche. Roche shall […***…], any amounts in excess of the agreed upon budget.   ***Confidential Treatment Requested***

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8.7 Disclosure of Payments

FMI acknowledges that Roche may be obligated to disclose this financial arrangement, including all fees, payments and transfers of value, as may be advisable or required under Applicable Law, including the US Sunshine Act.

  9. Accounting and reporting

9.1 Timing of Payments

Payments shall be made during the time periods set forth in this Agreement. If not stated explicitly, payments shall be made by Roche within [… ***…] after Roche receives an invoice from FMI.

  9.2 Late Payment

Any payment under this Agreement that is not paid on or before the date such payment is due shall bear interest, to the extent permitted by Applicable Law, at […***…] points above the average one-month Euro Interbank Offered Rate (EURIBOR), as reported by Reuters from time to time, calculated on the number of days such payment is overdue.

  9.3 Method of Payment

All amounts payable hereunder shall be paid in US dollars (the Payment Currency) to account(s) designated by FMI.

  10. Taxes

FMI shall pay all sales, turnover, income, revenue, value added, and other taxes levied on account of any payments accruing or made to FMI under this Agreement.

If provision is made in law or regulation of any country for withholding of taxes of any type, levies or other charges with respect to any royalty or other amounts payable under this Agreement to FMI, then Roche or its relevant Affiliates shall promptly pay such tax, levy or charge for and on behalf of FMI to the proper governmental authority, and shall promptly furnish FMI with receipt of payment. Roche shall be entitled to deduct any such tax, levy or charge actually paid from royalty or other payment due FMI or be promptly reimbursed by FMI if no further payments are due FMI. Each Party agrees to reasonably assist the other Party in claiming exemption from such deductions or withholdings under double taxation or similar agreement or treaty from time to time in force and in minimizing the amount required to be so withheld or deducted.   ***Confidential Treatment Requested***

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It is understood between the Parties that the agreed upon and/or applied remunerations and other payments under this Agreement for all transactions between (a) FMI and (b) Roche are based on arm's length and good faith considerations. Should such remunerations for products and services or other payments nevertheless be challenged by any Governmental Authority including any tax authority in the US, or in Switzerland or other jurisdiction of Roche or its relevant Affiliates (Roche's Jurisdiction):



(a) FMI and Roche or its relevant Affiliates shall fully co-operate with each other with the objective to convince the challenging authority that such remunerations for products and services and other payments are appropriate, including providing each other with copies of third party agreements if necessary to utilize as comparables to support the arm's length nature of transactions between FMI and Roche. In the event that the challenging authority is not convinced, the Parties shall request that the tax authorities in the US and in Roche's Jurisdiction initiate government-to-government procedures pursuant to the applicable bi- lateral convention for the avoidance of double taxation or similar treaty or convention (if any) between the US and Roche's Jurisdiction (Competent Authority Procedures).



(b) In the event that the US tax authorities determine that such remunerations for products and services or other payments are not appropriate and levy an assessment on FMI, and such assessment results in a refund (or similar payment or credit) by or from the tax authorities in Roche's Jurisdiction to Roche or its relevant Affiliate, then Roche shall pay (or shall ensure that Roche shall pay) the amount of such refund to FMI. In the event that the tax authorities in Roche's Jurisdiction determine that such remunerations for products and services or other payments are not appropriate and levy an assessment on Roche, and such assessment results in a refund (or similar payment or credit) by or from the US tax authorities to FMI then FMI shall pay (or shall ensure that FMI shall pay) the amount of such refund to Roche. Each Party shall use its reasonable efforts to obtain such refund (or similar payment or credit).

  (c) In the event of such an assessment by either tax authority (an Assessment), the Parties agree to making adjustments to the relevant remunerations for products and services or other payments to levels agreed to by the tax authorities in both the US and Roche's Jurisdiction as the result of Competent Authority Procedures.

  11. Auditing

11.1 Right to Audit

Each Party shall keep, and shall require its Affiliates and Sublicensees to keep, full, true and accurate books of account containing all particulars that may be necessary for the purpose of calculating all payments payable under this Agreement, including, for Roche, the right to audit materials necessary to ensure compliance with the most favored customer provisions of Article 5. Such books of accounts shall be kept at their principal place of business. At the expense of the auditing Party, the auditing Party shall have the right to engage an internationally recognized, independent public accountant reasonably accept able to the other Party to perform, on behalf of such Party an audit of such books and records of the audited Party and its Affiliates, its licensees and Sublicensees, that are deemed necessary for the period or periods requested by the auditing Party and the correctness of any financial report or payments made under this Agreement, including with respect to benefits and terms complying with the most favored   - 40 -





customer provisions of Article 5. For avoidance of doubt, all audits under this Section shall be conducted solely by an independent public accountant as described in the foregoing sentence.

Upon timely request and at least […***…] prior written notice from the auditing Party, such audit shall be conducted in the countries specifically requested by the auditing Party, during regular business hours in such a manner as to not unnecessarily interfere with the audited Party's normal business activities, and shall be limited to results in the […***…] prior to audit notification.

Such audit shall not be performed more frequently than […***…] nor more frequently than […***…] with respect to records covering, or impacting in accordance with Article 5, any specific period of time.

All information, data documents and abstracts herein referred to shall be used only for the purpose of verifying payment obligations, shall be treated as the audited Party's Confidential Information subject to the obligations of this Agreement and need neither be retained more than [… ***…] after completion of an audit hereof, if an audit has been requested; nor more than […***…] from the end of the […***…] to which each shall pertain; nor more than […***…] after the date of termination of this Agreement.

  11.2 Audit Reports

The auditors shall only state factual findings in the audit reports and shall not interpret the agreement. The auditors shall share all draft audit reports with the auditing Party before the draft report is shared with the audited Party and before the final document is issued. The final audit report shall be shared with the auditing Party at the same time it is shared with the audited Party.

  11.3 Over or Underpayment

If the audit reveals an overpayment by Roche, FMI shall reimburse Roche for the amount of the overpayment within […***…]. If the audit reveals an underpayment by Roche, Roche shall make up such underpayment with the next payment or, if no further payments are owed by Roche, Roche shall reimburse FMI for the amount of the underpayment within […***…]. The audited Party shall pay for the audit costs if the underpayment of the audited Party exceeds […***…] of the aggregate amount of royalty payments owed with regard to the period subject of the audit. Section 9.2 shall apply to this Section 11.3.

  11.4 Duration of Audit Rights

The failure of a Party to request verification of any calculation within the period during which corresponding records must be maintained under this Article 11 will be deemed to be acceptance of the payments and reports.

  12. Intellectual Property

12.1 Ownership of Inventions, data and results

  12.1.1 In General

Except as specifically set forth herein, FMI shall own all FMI Inventions, Roche shall own all Roche Inventions, and FMI and Roche shall jointly own all Joint Inventions. FMI and Roche each shall require all of its employees to assign all inventions related to Products and Services made by them to Roche and FMI, as the case may be.   ***Confidential Treatment Requested***

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The determination of ownership of Inventions shall be determined in accordance with US inventorship laws as if such Inventions were made in the US.

Except as otherwise expressly set forth herein, each Party shall retain full ownership and control of, and all rights in, its Background IP and any improvements or modifications thereto (Roche Improvement IP and FMI Improvement IP respectively). Roche Improvement IP shall mean any improvements or modifications to Roche's Background IP discovered, conceived or reduced to practice after the Effective Date in the performance of activities under this Agreement. FMI Improvement IP shall mean any improvements or modifications to FMI's Background IP discovered, conceived or reduced to practice after the Effective Date in the performance of activities under this Agreement. All materials, information, data and writings provided to FMI by or on behalf of Roche, in any form whatsoever, which were Controlled by Roche prior to being provided to FMI, shall remain the property of Roche; FMI shall acquire no right, title or interest in such materials, information, data and writings as the result of its activities under this Agreement.

Except as specifically set forth herein, this Agreement shall not be construed, by implication, necessity or otherwise as (i) giving any of the Parties any license, right, title, interest in or ownership to the Confidential Information; (ii) granting any license or right under any intellectual property rights; or (iii) representing any commitment by either Party to enter into any additional agreement.

    12.1.2 For the Molecular Information Platform Program

Subject to the license granted to FMI under Section 2.1.2, Roche shall exclusively own all right title and interest to any information, results, and intellectual property from any Clinical Study undertaken or supported by Roche, including, without limitation, the Sample Results and information and results from any Sample Profiling. FMI shall assign to Roche its rights to any intellectual property in or arising from the Sample Results (except for FMI Improvements).

Except as otherwise set forth herein, FMI shall exclusively own all right, title, and interest to any improvements or modifications to the FMI Genomic Analysis Platform that arise in connection with the performance of the work under the Molecular Information Platform Program.

Roche shall exclusively own all information, results, and intellectual property from Advanced Genomic Analyses performed on Roche samples (Roche-Owned Advanced Genomic Analysis Results), and any inventions arising from the Roche-Owned Advanced Genomic Analysis Results, and FMI will assign all rights to any such inventions to Roche (except for FMI Improvements).

    12.1.3 For the Immunotherapy Testing Platform Program

Subject to the license granted to FMI under Section 2.1.3, Roche shall exclusively own all data, results, and intellectual property therein arising from profiling samples provided by Roche to FMI for testing in the Immunotherapy Testing Platform Development (except for FMI Improvements) (Roche Immunotherapy Sample Results), and FMI shall assign to Roche all such intellectual property. FMI shall not disclose Roche Immunotherapy Sample Results to third parties or use such results in work with Third Parties.   - 42 -





Roche shall exclusively own, and FMI shall assign to Roche, all intellectual property arising from the Immunotherapy Testing Platform Development that Covers methods of treatment, stratifying patients, or identifying patients that would benefit from a particular treatment, and all other methods useful in connection with the therapeutic treatment of a patient.

To the extent third-party intellectual property must be licensed for the Immunotherapy Testing Platform Development, Roche and FMI shall jointly decide on an appropriate in-licensing strategy and negotiate a fair cost sharing between the Parties in good faith; provided however, that FMI shall retain the right to take such a license at its own cost on such terms as it shall determine if the Parties cannot reach a timely agreement on how to proceed.

    12.1.4 For the ctDNA Program

Subject to the license granted to FMI under Section 2.1.4, Roche shall exclusively own all data, results, and intellectual property arising from the profiling of Roche samples in the ctDNA Platform Development Program (Roche ctDNA Sample Results). FMI shall not disclose Roche ctDNA Sample Results to third parties or use such results in work with third parties.

    12.1.5 For the CDx Development Program

Subject to the license granted to Roche under Section 2.1.5, FMI shall exclusively own all intellectual property arising from the CDx Development that Covers the CDx Assays (FMI CDx IP).

Roche shall exclusively own all data, results, and intellectual property arising from analysis of its samples in the relevant CDx Development as well as all intellectual property arising from the CDx Development Program to the extent that it is reasonably related to or Covers the relevant Roche product including the use, formulation, and methods of treatment for the relevant Roche product (Roche CDx Development IP).

To the extent third-party intellectual property must be licensed for the Investigational CDx Development or commercialization of the Investigational CDx Assays, Roche and FMI shall jointly decide on an appropriate in-licensing strategy and negotiate a fair cost sharing between the Parties in good faith.

  12.2 German Statute on Employee's Inventions

In accordance with the German Statute on Employees' Inventions, each Party agrees to claim the unlimited use of any Invention conceived, reduced to practice, developed, made or created in the performance of, or as a result of, any Research Program by employees of any German Affiliates or any other persons acting on behalf of such German Affiliates. For the avoidance of doubt, each Party is responsible for fulfilling the obligations towards their employees under the German Statute of Employee's Inventions.

  12.3 Prosecution and Maintenance of Patent Rights Claiming FMI Inventions

FMI shall, at its own expense and discretion, (i) control and Handle all FMI Foreground Patent Rights, (ii) consult with Roche as to the Handling of such FMI Foreground Patent Rights, and (iii) furnish to Roche copies of all material documents relevant to any such Handling. FMI shall furnish such documents and consult with Roche in sufficient time before any action by FMI is due to allow Roche to provide comments thereon, which comments FMI must consider. At FMI's

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expense and reasonable request, Roche shall cooperate, in all reasonable ways with the Handling of all FMI Foreground Patent Rights. If FMI elects not to Handle any FMI Foreground Patent Rights under this Section 12.3, then FMI shall provide at least […***…] prior written notice to Roche. Thereafter, Roche shall have the right, but not the obligation to Handle any such notified FMI Foreground Patent Rights, at its sole expense and its sole discretion. Notwithstanding the foregoing, and for clarity, FMI shall have no obligations to Roche under this Section 12.3 in regard to FMI Foreground Patent Rights relating to the Genomic Analysis Platform or the Molecular Information Database (including, without limitation, methods, procedures, and algorithms related to or embodied in each) that do not incorporate or rely on the continued use of Roche Confidential Information.

  12.4 Prosecution and Maintenance of Roche Foreground Patent Rights and Joint Patent Rights

Roche shall, at its own expense and discretion, control and Handle (including abandon) all Roche Foreground Patent Rights and Joint Patent Rights. If Roche elects not to Handle any Patent Rights under this Section 12.4, then Roche shall provide at least […***…] prior written notice to FMI. Thereafter, FMI shall have the right, but not the obligation to Handle any such notified Patent Rights, at its sole expense and its sole discretion.

  12.5 Joint Patent Team

Where the Parties need to consult with each other on the Handling of Patent Rights, the Parties shall establish a joint patent team (JPT) and shall adopt procedures for interacting on patent matters. The JPT shall be subject to the oversight of the JMC. The JPT shall also serve as a forum for promptly notifying the other Party when an Invention is made by a Party.

  12.6 CREATE Act

It is the intention of the Parties that this Agreement is a joint research agreement as that phrase is defined in Public Law 108-53 (Create Act) and applied in 35 USC §103(c)(3). If either Party intends to overcome a rejection of a claimed invention within the FMI Foreground Patent Rights or Roche Foreground Patent Rights pursuant to the provisions of the Create Act, then the Parties, through the JPT, shall work together in good faith to agree in writing how any rejection should be overcome.

  12.7 Infringement

Each Party shall promptly provide written notice to the other Party during the Agreement Term of any (i) known infringement or suspected infringement by a Third Party of any FMI Background Patent Rights, FMI Foreground Patent Rights, Roche Background Patent Rights, Roche Foreground Patent Rights or Joint Patent Rights, or (ii) known or suspected unauthorized use or misappropriation by a Third Party of any FMI Background Know-How, FMI Know-How, Roche Background Know-How, Roche Know-How or Joint Know-How, and shall provide the other Party with all evidence in its possession supporting such infringement or unauthorized use or misappropriation.

Within […***…] after a Party provides or receives such written notice (Decision Period), the Party Handling enforcement of such Patent Right as set forth in this Section 2.7, in its sole discretion, shall decide whether or not to initiate such suit or action in the Territory and shall notify the other Party in writing of its decision in writing (Suit Notice).   ***Confidential Treatment Requested***

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For any FMI Background Patent Right or sole FMI Patent Right, FMI in its sole discretion shall decide whether or not to initiate such suit or action in the Territory. FMI shall have full discretion as to how it wishes to handle such suit and may reach Settlement under any terms and conditions it desires and retain all damages, settlement fees or other consideration received in connection therewith. Only if a Settlement could adversely affect Roche shall the written consent of Roche be required, which consent shall not be unreasonably withheld. The term adversely affect in the previous sentence shall include, among other things, […***…].

For any sole Roche Background Patent Right or Roche Patent Right, Roche, in its sole discretion, shall decide whether or not to initiate such suit or action in the Territory. Roche shall have full discretion as to how it wishes to handle such suit and may reach Settlement under any terms and conditions it desires and retain all damages, settlement fees or other consideration received in connection therewith. Only if a Settlement could adversely affect FMI shall the written consent of FMI be required, which consent shall not be unreasonably withheld.

If for a Joint Patent Right, Roche decides to bring a suit or take action, once Roche provides Suit Notice, Roche may immediately commence such suit or take such action. In the event that Roche (i) does not in writing advise FMI within the Decision Period that Roche will commence suit or take action, or (ii) fails to commence suit or take action within a reasonable time after providing Suit Notice, FMI shall thereafter have the right to commence suit or take action in the Territory and shall provide written notice Roche of any such suit commenced or action taken by FMI.

Upon written request, the Party bringing suit or taking action (Initiating Party) shall keep the other Party informed of the status of any such suit or action and shall provide the other Party with copies, to the extent the Initiating Party is lawfully permitted to do so, of all material documents or communications filed in such suit or action. The Initiating Party shall have the sole and exclusive right to select counsel for any such suit or action.

The Initiating Party shall, except as provided below, pay all expenses of the suit or action, including the Initiating Party's attorneys' fees and court costs. Any damages, settlement fees or other consideration received as a result of such suit or action shall be allocated as follows:

(a) First, to reimburse the Initiating Party for its costs and, if any remains, to the other Party for any advisory counsel fees and costs; and

(b) Second, the balance, if any, shall be allocated […***…].

If the Initiating Party believes it is reasonably necessary or desirable to obtain an effective remedy, upon written request the other Party agrees to be joined as a party to the suit or action but shall be under no obligation to participate except to the extent that such participation is required as the result of its being a named party to the suit or action. At the Initiating Party's written request, the other Party shall offer reasonable assistance to the Initiating Party in connection therewith at no charge to the Initiating Party except for reimbursement of reasonable out-of-pocket expenses incurred by the other Party in rendering such assistance. The other Party shall have the right to participate and be represented in any such suit or action by its own counsel at its own expense.

The Initiating Party may settle, consent judgment or otherwise voluntarily dispose of the suit or action (Settlement) without the written consent of the other Party but only if such Settlement can be achieved without adversely affecting the other Party (including any of its Patent Rights). If a Settlement could adversely affect the other Party, then the written consent of the other Party would be required, which consent shall not be unreasonably withheld.   ***Confidential Treatment Requested***

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12.8 Defense

If an action for infringement is commenced against either Party, its licensees or its sublicensees related to such Party's conduct of a Work Stream within the scope of an R&D Plan then such Party shall defend such action at its own expense, and the other Party shall assist and cooperate with such Party, at its own expense, to the extent necessary in the defense of such suit. The defending Party shall have the right to settle the suit or consent to an adverse judgment thereto, in its sole discretion, so long as such settlement or adverse judgment does not adversely affect the rights of the other Party and its Affiliates (including any patent rights Controlled by any of them). The defending Party shall assume full responsibility for the payment of any award for damages, or any amount due pursuant to any settlement entered into by it with such Third Party.

If the manufacture, use, importation, offer for sale or sale of any Products and Services results in any claim, suit or proceeding alleging patent infringement or trade secret misappropriation against FMI or a member of the Roche Group, then such Party shall promptly notify the other Party hereto. The Parties shall cooperate with each other in connection with any such claim, suit or proceeding and shall keep each other reasonably informed of all material developments in connection with any such claim, suit or proceeding.

If a Third Party asserts that Patent Rights owned by or licensed to it are infringed by the development, manufacture, use, importation, offer for sale or sale of products arising out of this Agreement by a member of the Roche Group, or that its trade secrets were misappropriated in connection with such activity, then Roche shall have the exclusive right and responsibility to resolve any such claim, whether by obtaining a license from such Third Party, by defending against such Third Party's claims or otherwise, and shall be solely responsible for the defense of any such action, any and all costs incurred in connection with such action (including, without limitation, attorneys' and expert fees) and all liabilities incurred in connection therewith. Notwithstanding the above, Roche shall not enter into any settlement of any such claim without the prior written consent of FMI if such settlement would require FMI to be subject to an injunction or to make any monetary payment to Roche or any Third Party, or admit any wrongful conduct by FMI or its Affiliates, or would limit or restrict the claims of or admit any invalidity and/or unenforceability of any of the Patent Rights Controlled by FMI, or have any impact on activities outside the Field.

  12.9 Common Interest Disclosures

With regard to any information or opinions disclosed pursuant to this Agreement by one Party to each other regarding intellectual property and/or technology owned by Third Parties, the Parties agree that they have a common legal interest in determining whether, and to what extent, Third Party intellectual property rights may affect the conduct of the Work Streams and/or Products and Services, and have a further common legal interest in defending against any actual or prospective Third Party claims based on allegations of misuse or infringement of intellectual property rights relating to the conduct of the Work Streams and/or Products and Services. Accordingly, the Parties agree that all such information and materials obtained by FMI and Roche from each other will be used solely for purposes of the Parties' common legal interests with respect to the conduct of the Agreement. All information and materials will be treated as protected by the attorney-client privilege, the work product privilege, and any other privilege or   - 46 -





immunity that may otherwise be applicable. By sharing any such information and materials, neither Party intends to waive or limit any privilege or immunity that may apply to the shared information and materials. Neither Party shall have the authority to waive any privilege or immunity on behalf of the other Party without such other Party's prior written consent, nor shall the waiver of privilege or immunity resulting from the conduct of one Party be deemed to apply against any other Party.

  13. Representations and Warranties

13.1 Mutual Representations and Warranties

FMI and Roche each represent and warrant that:

(a) it has all requisite power and authority to enter into and perform its obligations under this Agreement;

(b) it has no outstanding agreement or obligation that is in conflict with any of the provisions of this Agreement or that would preclude its personnel from complying with the provisions hereof;

(c) all of its employees, officers and consultants have executed agreements requiring assignment to it of all Inventions made by such individuals during the course of and as a result of their participation in activities under this Agreement;

(d) the execution, delivery and performance of this Agreement by it and all instruments and documents to be delivered by it hereunder: (i) are within its corporate power; (ii) have been duly authorized by all necessary or proper corporate action; (iii) are not in contravention of any provision of any of its formation or governing documents; (iv) to its knowledge, will not violate any law or regulation or any order or decree of any court of governmental instrumentality; (v) will not violate the terms of any indenture, mortgage, deed of trust, lease, agreement, or other instrument to which it is a party or by which it or any of its property is bound, which violation would have an adverse effect on its financial condition or on its ability to perform its obligations hereunder; and (vi) do not require any filing or registration with, or the consent or approval of, any governmental body, agency, authority or any other person, which has not been made or obtained previously (other than approvals required under the HSR Act, Regulatory Approvals required for the sale of Products and filings with Regulatory Authorities required in connection with Products);

(e) there are no claims or investigations (other than with respect to the Parties' HSR filings), pending or threatened against it or any of its Affiliates, at law or in equity, or before or by any governmental authority relating to the matters contemplated under this Agreement or that would materially adversely affect its ability to perform its obligations hereunder; and

(f) neither it nor any of its Affiliates is or will be under any obligation to any person, contractual or otherwise, that is conflicting with the terms of this Agreement or that would impede the fulfillment of its obligations hereunder.   - 47 -





13.2 Activities

Each Party will perform all activities under this Agreement (i) in a professional manner, (ii) in conformance with the level or care and skill ordinarily exercised by other professional institutions in similar circumstances, and (iii) in compliance with Applicable Law.

  13.3 Safety Data

FMI represents and warrants that FMI has disclosed to Roche and will immediately continue to disclose to Roche any relevant safety data relevant to the Work Streams and assays being developed thereunder.

  13.4 Third Party Patent Rights

FMI represents and warrants that FMI has no knowledge of the existence of any patent or patent application owned by or licensed to any Third Party that could prevent in the Territory the activities contemplated under this Agreement.

  13.5 Inventors

FMI represents and warrants that FMI has obtained the assignment of, or a license under, the FMI Background Patent Rights necessary to grant the licenses granted hereunder. FMI shall obtain the assignment of, or a license under, the FMI Foreground Patent Rights necessary to grant the licenses granted hereunder.

  13.6 Grants

FMI represents and warrants that, to the best of FMI's knowledge and belief, FMI has the lawful right to grant Roche and its Affiliates the rights and licenses described in this Agreement.

  13.7 Ownership and Validity of Know-How

FMI represents and warrants that FMI's Know-How is legitimately in the possession of FMI and has not been misappropriated from any Third Party. FMI has taken reasonable measures to protect the confidentiality of its Know-How.

  13.8 Data Protection (Privacy) and Security.

  13.8.1 Study Data Collection

FMI shall collect and process Study Data in accordance with the provisions of this Agreement and in compliance with Applicable Law with respect to the processing of Study Data, including but not limited to applicable international, US federal, state and local data protection and data security laws.

    13.8.2 Data Protection

To ensure the privacy and security of the health or medical data, including Study Data or other Personal Data related to this Agreement that FMI shall create, acquire, receive, maintain, or transmit as a result of entering into the Agreement, FMI shall implement adequate and reasonable safeguards to prevent the use or disclosure of such information other than as provided for in the Agreement, and to protect the confidentiality, integrity, and availability of such information. In addition, FMI shall protect all such data, in accordance with applicable international Data Protection laws and US federal and state laws and regulations.   - 48 -





  13.8.3 Privacy

FMI understands and agrees that the confidentiality, privacy and security requirements contained in this Agreement also apply to any permitted sub-contractors, temporary employees or other third-parties who receive any health or medical data, including Study Data, or other Personal Data, as a result of this Agreement. FMI will ensure that all of these parties enter substantially similar confidentiality, privacy and security agreements with Institution. Copies of such Agreements shall be provided to Roche within seven (7) business days upon written request of Roche.

    13.8.4 Training

FMI shall also ensure that its own employees, as well as any permitted subcontractors, temporary employees or other Third Parties who assist FMI in performing activities under the Agreement, and who have access to any health or medical data, including Study Data or other Personal Data, as a result of this Agreement receive appropriate privacy and security training, which shall be updated periodically in accordance with applicable laws, regulations, and industry standard, or as otherwise reasonably requested by Roche.

    13.8.5 Processing of Study Data

FMI, its Affiliates and agents shall not collect or process health or medical data, including Study Data or any other Personal Data related to this Agreement, in a manner that involves the transfer of such Personal Data from one jurisdiction to any other jurisdiction (the EEA constituting a single jurisdiction for this purpose), without prior written consent of Roche.

    13.8.6 Compliance

FMI undertakes to comply with its obligations (if any) under applicable legislation to notify any supervisory authority of its collection and processing activities under this Agreement and further agrees to take all such steps as Roche may reasonably require from time to time in order to enable Roche to comply with any notification obligation applicable to Roche.

    13.8.7 Data Collection

FMI will ensure that it does not collect any health or medical data, including Study Data, relating to individuals other than the categories of data specified in the protocol identified in the applicable Task Order and will collect and process Study Data for the sole purpose of the study identified in the applicable Task Order and not further process such data in any other manner.

    13.8.8 Disclosure

FMI will not disclose health or medical data, including Study Data or any other Personal Data related to this Agreement to any Third Party outside of the requirements of this Agreement without the prior permission in writing of Roche, except where such disclosure is required by any applicable law, regulation or supervisory authority, in which case the Institution will, wherever possible, notify Roche prior to complying with any such request for disclosure and shall comply with all reasonable directions of Roche with respect to such disclosure.   - 49 -





  13.8.9 Document Retention

FMI will have appropriate procedures in place for the destruction or purging of any medical or health data, including Study Data and any other Personal Data, related to this Agreement when the retention time that applies to the data has been reached.

    13.8.10 Procedures

FMI shall ensure that it has appropriate procedures in place to fulfill applicable International Data Protection laws and US federal and state or other legal requirements, should an individual request access to or changes to the health or medical data, including Study Data or any Personal Data related to this Agreement, maintained by Institution. Institution will notify Roche promptly (and in any event within […***…] after receipt) of any communication received from a Data Subject relating to the Data Subject a right to access, modify or correct Study Data and to comply with all instructions of Roche in responding to such communications.

    13.8.11 Survival

FMI's obligations to maintain privacy and security over medical or health data, including Study Data and other Personal Data received pursuant to this Agreement, will survive the termination or expiration of this Agreement.

    13.8.12 Security Breach

At any time during the processing of Persona Data, FMI shall notify Roche immediately (but no later than […***…] from the date) of any Data Security Breach involving Roche data. FMI shall assist and cooperate with Roche concerning any disclosures to affected parties, government or regulatory agencies and with any other remedial measures requested by Roche or mandated by Applicable Law.

  13.9 No Other Representations

EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT AND THE RELATED AGREEMENTS BEING ENTERED INTO BY THE PARTIES AT THIS TIME, THE FOREGOING REPRESENTATIONS AND WARRANTIES ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF PRODUCTS. IN NO EVENT SHALL EITHER FMI OR ROCHE BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT BASED ON CONTRACT, TORT OR ANY OTHER LEGAL THEORY.

  14. Indemnification

14.1 Indemnification by Roche

Roche shall indemnify, hold harmless and defend FMI and its directors, officers, employees and agents from and against any and all losses, expenses, cost of defense (including without   ***Confidential Treatment Requested***

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limitation attorneys' fees, witness fees, damages, judgments, fines and amounts paid in settlement) and any amounts FMI becomes legally obligated to pay because of any claim or claims against it to the extent that such claim or claims arise out of Roche's and its Affiliates' actions or inactions in connection with activities under this Agreement, except to the extent such losses, expenses, costs and amounts are due to the gross negligence or willful misconduct or failure to act of FMI.

  14.2 Indemnification by FMI

FMI shall indemnify, hold harmless and defend Roche and its directors, officers, employees and agents from and against any and all losses, expenses, cost of defense (including without limitation attorneys' fees, witness fees, damages, judgments, fines and amounts paid in settlement) and any amounts Roche becomes legally obligated to pay because of any claim or claims against it to the extent that such claim or claims arise out of FMI's and FMI's Affiliates' actions or inactions in connection with activities under this Agreement, except to the extent that such losses, expenses, costs and amounts are due to the gross negligence or willful misconduct or failure to act of Roche.

  14.3 Procedure

In the event of a claim by a Third Party against a Party entitled to indemnification under this Agreement (Indemnified Party), the Indemnified Party shall promptly notify the other Party (Indemnifying Party) in writing of the claim and the Indemnifying Party shall undertake and solely manage and control, at its sole expense, the defense of the claim and its settlement. The Indemnified Party shall cooperate with the Indemnifying Party and may, at its option and expense, be represented in any such action or proceeding by counsel of its choice. The Indemnifying Party shall not be liable for any litigation costs or expenses incurred by the Indemnified Party without the Indemnifying Party's written consent. The Indemnifying Party shall not settle any such claim unless such settlement fully and unconditionally releases the Indemnified Party from all liability relating thereto, unless the Indemnified Party otherwise agrees in writing.

  15. Liability

THE FOREGOING REPRESENTATIONS AND WARRANTIES ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES NOT EXPRESSLY SET FORTH HEREIN. FMI AND ROCHE DISCLAIM ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO EACH OF THEIR RESEARCH, DEVELOPMENT AND COMMERCIALIZATION EFFORTS HEREUNDER, INCLUDING, WITHOUT LIMITATION, WHETHER THE PRODUCTS CAN BE SUCCESSFULLY DEVELOPED OR MARKETED, THE ACCURACY, PERFORMANCE, UTILITY, RELIABILITY, TECHNOLOGICAL OR COMMERCIAL VALUE, COMPREHENSIVENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WHATSOEVER OF THE PRODUCTS.

  16. Obligation Not to Disclose Confidential Information

16.1 Non-Use and Non-Disclosure

During the Agreement Term and for […***…] thereafter, a Receiving Party shall (i) treat Confidential Information provided by Disclosing Party as it would treat its own information of a similar nature, (ii) take all reasonable precautions not to disclose such Confidential Information   ***Confidential Treatment Requested***

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to Third Parties, without the Disclosing Party's prior written consent, and (iii) not use such Confidential Information other than for fulfilling its obligations or exercising its rights under this Agreement. If any Confidential Information is required to be disclosed by the Receiving Party or its Affiliates to comply with a court or administrative order, the Receiving Party or its Affiliates, prior to making such disclosure, shall furnish as much notice as is reasonable under the circumstances to the Disclosing Party to enable it to resist such disclosure.

  16.2 Permitted Disclosure

Notwithstanding the obligation of non-use and non-disclosure set forth in Section 16.1, the Parties recognize the need for certain exceptions to this obligation, specifically set forth below, with respect to press releases, patent rights, publications, and certain commercial considerations.

  16.3 Press Releases

Following the Effective Date, the Parties will issue a joint press release announcing the existence and selected key terms of this Agreement, in a form substantially similar to the template attached as Appendix 16.3.

Each Party shall provide the other with a copy of any draft press release related to the activities contemplated by this Agreement at least ten (10) Business Days prior to its intended publication for such other Party's review. The reviewing Party may provide the releasing Party with suggested modification to the draft press release. The releasing Party shall consider, and shall not unreasonably disregard, the reviewing Party's suggestions in issuing its press release. Notwithstanding the foregoing, each Party must comply with its obligations under Section 16.1 and 16.5.

  16.4 Publications

During the Agreement Term, the following restrictions shall apply with respect to disclosure by any Party of Confidential Information in any publication or presentation. A Party (Publishing Party) shall provide the other Party with a copy of any proposed publication or presentation at least […***…] prior to submission for publication so as to provide such other Party with an opportunity to recommend any changes it reasonably believes are necessary to continue to maintain the Confidential Information disclosed by the other Party to the Publishing Party in accordance with the requirements of this Agreement. The incorporation of such recommended changes shall not be unreasonably refused; and if such other Party notifies (Publishing Notice) the Publishing Party in writing, within […***…] after receipt of the copy of the proposed publication or presentation, that such publication or presentation in its reasonable judgment (i) contains an invention, solely or jointly conceived and/or reduced to practice by the other Party, for which the other Party reasonably desires to obtain patent protection or (ii) could be expected to have a material adverse effect on the commercial value of any Confidential Information disclosed by the other Party to the Publishing Party, the Publishing Party shall prevent such publication or delay such publication for a mutually agreeable period of time. In the case of inventions, a delay shall be for a period reasonably sufficient to permit the timely preparation and filing of a patent application(s) on such invention, and in no event less than [… ***…] from the date of the Publishing Notice.   ***Confidential Treatment Requested***

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16.5 Commercial Considerations

Nothing in this Agreement shall prevent a Party or its Affiliates from disclosing Confidential Information of the other Party to (i) governmental agencies to the extent required or desirable to secure government approval for the development, manufacture or sale of a product in the Territory and (ii) Third Parties acting on behalf of a Party, to the extent reasonably necessary to conduct the activities contemplated by this Agreement provided that such Third Parties are bound by confidentiality obligations with respect to such information that are no less stringent than those included in this Agreement.

  17. Term and Termination

17.1 Commencement and Term

This Agreement shall commence upon the Effective Date and continue for the Agreement Term.

  17.2 Termination

  17.2.1 Termination for Breach

A Party (Non-Breaching Party) shall have the right to terminate this Agreement on a Work Stream-by-Work Stream basis, or, for Roche, on an Approved Marker or Investigational Marker basis in the case of the CDx Development Program, in the event the other Party (Breaching Party) is in material breach of any of its material obligations under the applicable Work Stream (or obligations pertaining to an Approved Marker or Investigational Marker program). Failure of FMI to comply materially with Performance Specifications or Quality Standards shall be considered a material breach by FMI. For avoidance of doubt, a Non-Breaching Party shall only be permitted to terminate the Work Stream (or Approved Marker or Investigational Marker program) to which a material breach of a material obligation relates. The Non-Breaching Party shall provide written notice to the Breaching Party, which notice shall identify the breach. Except in the event of a breach that, by its nature, is not amenable to cure, in which case termination may be made effective immediately, the Breaching Party shall have a period of […***…] after such written notice is provided (Peremptory Notice Period) to cure such breach or, absent withdrawal of the Non-Breaching Party's request for termination, the relevant Work Stream (or Approved Marker or Investigational Marker program) shall terminate; provided that, if the Breaching Party has a bona fide dispute as to whether such breach: (i) occurred, (ii) pertains to a material obligation, or (iii) has been cured, the Breaching Party will so notify the Non-Breaching Party, the relevant Work Stream (or Approved Marker or Investigational Marker program) shall not terminate and the expiration of the Peremptory Notice Period shall be tolled until such dispute is resolved pursuant to Section 19.2. If such dispute is resolved by finding that the Non-Breaching Party is entitled to terminate the relevant Work Stream (or Approved Marker or Investigational Marker program), the Breaching Party may have the remainder of the Peremptory Notice Period to cure such breach. If such breach is not cured within the Peremptory Notice Period, then absent withdrawal of the Non-Breaching Party's request for termination, the relevant Work Stream (or Approved Marker or Investigational Marker program) shall terminate in accordance with the notice from the Non-Breaching Party as of the expiration of the Peremptory Notice Period.

    17.2.2 Insolvency

A Party shall have the right to terminate this Agreement, if the other Party incurs an Insolvency Event; provided, however, in the case of any involuntary bankruptcy proceeding, such right to   ***Confidential Treatment Requested***

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terminate shall only become effective if the Party that incurs the Insolvency Event consents to the involuntary bankruptcy or such proceeding is not dismissed within […***…] after the filing thereof.

    17.2.3 Termination by Roche without Cause

Roche shall have the right to terminate the Agreement in its entirety, or on a Work Stream-by-Work Stream basis, except for the ctDNA Work Stream, upon […***…] prior written notice, without cause. With regard to the CDx Development Program, Roche shall also have the right to terminate, without cause, the development of an Approved Marker and/or an Investigational Marker for inclusion in a CDx Assay, upon […***…] prior written notice; provided however that this right shall expire with respect to each Approved Marker for inclusion in a particular CDx Assay at such time as FMI has completed analytical validation for such Approved Marker. With regard to the Molecular Information Platform Program, Roche shall have the right to terminate without cause either or both of the Sample Profiling or Molecular Information Database Access activities individually.

    17.2.4 Termination by Roche for Frustration of Purpose

Roche shall have the right to terminate the ctDNA Platform Development Program upon […***…] prior written notice for frustration of purpose in the event that the Clinical Study for which the ctDNA Assay is being developed is canceled.

  17.3 Consequences of Termination

  17.3.1 Termination in General

Upon any termination of the Agreement, a Work Stream (or Approved Marker or Investigational Marker program), or this Agreement under Section 17.2.2, (i) FMI shall promptly return to Roche unused or remaining Samples that were provided for use in a terminated Work Stream (or related to the relevant Approved Marker or Investigational Marker), or, at Roche's option, securely dispose of all such unused or remaining Samples and provide Roche with a written notice of such disposal, (ii) each Party shall wind-down their activities under the Agreement in a manner that is intended to be expeditious and to mitigate losses arising from non-cancellable expenses and financial commitments to Third Parties, (iii) upon any termination by Roche under Section 17.2.3, or by FMI under Section 17.2.1 or Section 17.2.2, that includes the Immunotherapy Testing Platform Development Work Stream, the obligations in Section 3.2.8 shall terminate, (iv) each Party shall continue to Control its own intellectual property, including Patent Rights and Know-How, and Handle its own Patent Rights, and (v) Joint Patent Rights, if any, shall be handled by Roche subject to the provisions of Section 12.4 and 12.6, and each Party shall have the right to fully exploit such Joint Patent Rights.

17.3.2 Termination by FMI for Breach by Roche or Roche's Insolvency; Termination by Roche Without Cause or for Frustration of Purpose

Upon any termination by FMI for breach by Roche under Section 17.2.1, for Roche's Insolvency under Section 17.2.2, by Roche without cause under Section 17.2.3, or by Roche for frustration of purpose under Section 17.2.4:

  (i) The rights and licenses granted by FMI to Roche hereunder shall terminate for the terminated Agreement, or Work Stream, orportion of the Work Stream (as applicable, the Terminated Matter), on the effective date of termination;   ***Confidential Treatment Requested***

- 54 -





  (ii) All licenses granted by Roche to FMI hereunder pertaining to the Terminated Matter become fully paid up, perpetual andirrevocable;



(iii) Roche shall retain all licenses granted by FMI to Roche pertaining to intellectual property arising from work on the Terminated Matter prior to termination, provided, however, FMI shall be under no obligation to Handle any patent or patent application arising from Terminated Matters and may freely abandon (without offering Roche the right to Handle) or license (but, for clarity, not exclusively license or assign without Roche's consent if Roche retains license rights) such patent or patent application.

  (iv) Within […***…] after the effective date of termination and receipt by Roche of an invoice from FMI, Roche shall pay to FMI thefollowing amounts:



a. In the event of termination of the Molecular Information Platform Program Work Stream, Roche shall pay FMI all [… ***…] that would be owed over the remainder of the Agreement Term, or any […***…], plus any applicable incremental per Sample Profiling Fees for Sample Profiling performed by FMI during the year in which termination occurs that are […***…];



b. In the event of termination of the Immunotherapy Testing Platform Development Work Stream, (1) for avoidance of doubt, Roche shall pay FMI Roche's share of any FMI Development Costs incurred in connection with the Immunotherapy Testing Platform Development Work Stream as of the effective date of termination that were not previously paid by Roche; (2) (A) if the effective date of termination occurs prior to FMI's completion of the Immuno- Biomarker Discovery Platform, then Roche will pay FMI for the entirety of the FMI Development Costs FMI incurred in connection with FMI's performance of the Immunotherapy Testing Platform Development Work Stream, excluding any portion that was previously paid by Roche, or (B) if the effective date of termination occurs after FMI's commencement of Signature Identification services, then Roche will pay FMI for the entirety of the FMI Development Costs FMI incurred prior to the effective date of termination in connection with any ongoing performance of Signature Identification work by FMI, excluding any portion of such FMI Development Costs that was previously paid by Roche or that is payable by Roche under the foregoing clause (1); and (3) Roche shall pay FMI in accordance with Section 8.3.2 with respect to signatures developed by FMI prior to the effective date of termination.

  c. In the event of termination of the ctDNA Platform Development Program Work Stream, Roche shall have no contractual payment obligation under this Section 17.3.2; provided, however, that Roche shall be obligated to honor payment obligations triggered prior to the effective date of termination;



d. In the event of termination of the CDx Development Program Work Stream: for avoidance of doubt, Roche shall pay any FMI Development Costs in connection with the development of an Investigational Marker as specified by Section 8.5.1 incurred as of the effective date of termination that were not previously paid by Roche and any non-cancellable commitments reasonably incurred by FMI in   ***Confidential Treatment Requested***

- 55 -







anticipation of receiving PMA with regard to any Investigational Marker to the extent not re-allocable to FMI's other business activities, including without limitation, all accrued amounts under any individual CDx R&D Plan entered into by the Parties as described in Section 3.4.8 above; (ii) if the effective date of such termination is after FMI has completed analytical validation of any Investigational Marker for inclusion in a CDx Assay, then Roche shall remain obligated to pay a fee for each such terminated Investigational Marker equal to […***…] upon PMA approval; and (iii) the milestone payments specified under Section 8.5.3 shall apply with respect to CDx Assays containing any Approved Marker and/or Investigational Marker; and

  e. In the event of termination of the Agreement in its entirety under 17.2.2, Roche shall pay to FMI all amounts under theforegoing subsections (a) through (d) (inclusive) as applicable, if such fees become payable.



(v) FMI shall retain all rights and remedies available to it under law and equity in connection with breach by Roche under Section 17.2.1 or other termination under Section 17.2.2, Section 17.2.3, or 17.2.4, provided, however, that in the case of termination of the Molecular Information Platform Program under Section 17.2.1 or Section 17.2.3 above, FMI's exclusive remedy (other than for breach of confidentiality under Section 16.1) shall be the accelerated payments specified under Section 17.3.2(iv)a.

For avoidance of doubt, in the event FMI terminates the Agreement in its entirety due to Roche's Insolvency, all Work Streams and other activities under the Agreement will be deemed to be terminated and all of the applicable effects of termination in this Section 17.3.2 shall apply.

    17.3.3 Termination by Roche for Breach by FMI or FMI Insolvency

Upon any termination by Roche for breach by FMI under Section 17.2.1 or FMI's Insolvency, under Section 17.2.2:

  (i) The rights and licenses granted by Roche to FMI under Section 2.1 shall terminate for each terminated Work Stream, on theeffective date of termination, except that the rights granted to FMI under Section 2.1.2 shall survive such termination;

  (ii) All licenses granted by FMI to Roche hereunder pertaining to a terminated Work Stream become fully paid up, perpetual andirrevocable;

  (iii) The […***…] under Section 3.2.10 shall survive termination of the Immunotherapy Testing Platform Development Work Stream;

  (iv) The […***…] under Section 3.3.9 shall survive termination of the ctDNA Platform Development Program Work Stream;

  (v) Within […***…] after the effective date of termination and receipt by Roche of an accounting from FMI, FMI shall pay to Roche any unused Reserved Capacity Fees and Database Access Fees previously paid pursuant to Section 8.2.1.1 or any other unused and pre-paid amounts;   ***Confidential Treatment Requested***

- 56 -





  (vi) FMI shall transfer to Roche all FMI Know-How, other than FMI Know-How pertaining to the Molecular Information Platform Program, necessary for Roche to practice the Terminated Matter, solely for the purposes or practicing the Terminated Matter, including any necessary algorithms; and

  (vii) Roche shall retain all rights and remedies available to it under law and equity in connection with such breach by FMI.

For avoidance of doubt, in the event Roche terminates the Agreement in its entirety due to FMI's Insolvency, all Work Streams and other activities under the Agreement will be deemed to be terminated and all of the applicable effects of termination in this Section 17.3.3 shall apply.

    17.3.4 Direct License

Irrespective of anything to the contrary in this Agreement, any existing, permitted sublicense granted by a Party under this Agreement (and any further sublicenses thereunder) shall, upon a termination of the license granted hereunder that pertains to such sublicense, shall terminate; provided that if the licensee Party so requests in writing, the licensor Party shall negotiate with the relevant sublicensee towards the grant of a direct license of rights, provided that such sublicensee is not then in breach of its sublicense agreement with the licensee Party.

  17.4 Other Obligations

Termination of this Agreement by a Party, for any reason, shall not release Roche from any obligation to make payments to FMI that are due and payable prior to the effective date of termination. Termination of this Agreement by a Party, for any reason, will release Roche from any obligation to any payments to FMI that would otherwise become due or payable on or after the effective date of termination.

  17.5 Survival

In addition to any provisions that expressly survive in accordance with Article 17.3, Article 1 (Definitions, to the extent necessary to interpret the Agreement), Section 3.5.2 (Sample Handling and Disposal, to the extent applicable), Section 10 (Taxes), Section 12.1 (Ownership of Inventions), Section 12.9 (Common Interest Disclosures), Section 13.8.11 (Survival of Privacy and Security Obligations), Article 14 (Indemnification), Article 16 (Obligation Not to Disclose Confidential Information), Section 17.3 (Consequences of Termination), Section 17.5 (Surival), Section 19.1 (Governing Law), and Section 19.3 (Arbitration) shall survive any expiration or termination of this Agreement for any reason. Notwithstanding the foregoing, any provision of this Agreement that is intended by its very nature to survive expiration or termination of this Agreement shall also survive.

  18. Bankruptcy

All licenses (and to the extent applicable rights) granted under or pursuant to this Agreement by FMI to Roche are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title 11, US Code (the Bankruptcy Code) licenses of rights to intellectual property as defined under Section 101(35A) of the Bankruptcy Code. Unless Roche elects to terminate this Agreement, the Parties agree that Roche, as a licensee or sublicensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code, subject to the continued performance of its obligations under this Agreement.   - 57 -





19. Miscellaneous

19.1 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of New York, US, without reference to its conflict of laws principles, and shall not be governed by the United Nations Convention of International Contracts on the Sale of Goods (the Vienna Convention).

  19.2 Disputes

Unless otherwise set forth in this Agreement, in the event of any dispute in connection with this Agreement, such dispute shall be referred to the respective executive officers of the Parties designated below or their designees, for good faith negotiations attempting to resolve the dispute. The designated executive officers are as follows:   For FMI: CEO For Roche: Head of Roche Partnering

  19.3 Arbitration

Should the Parties fail to agree within […***…] after such dispute has first arisen, it shall be finally settled by arbitration in accordance with the Rules of American Arbitration Association (AAA) as in force at the time when initiating the arbitration. The tribunal shall consist of three arbitrators. The place of arbitration shall be New York, New York, US. The language to be used shall be English.

    19.3.1 Arbitrators

Each Party shall nominate one arbitrator. Should the claimant fail to appoint an arbitrator in the request for arbitration within […***…] of being requested to do so, or if the respondent should fail to appoint an arbitrator in its answer to the request for arbitration within […***…] of being requested to do so, the other Party shall request the AAA to make such appointment.

The arbitrators nominated by the Parties shall, within […***…] from the appointment of the arbitrator nominated in the answer to the request for arbitration, and after consultation with the Parties, agree and appoint a third arbitrator, who will act as a chairman of the Arbitral Tribunal. Should such procedure not result in an appointment within the […***…] time limit, either Party shall be free to request the AAA to appoint the third arbitrator.

Where there is more than one claimant and/or more than one respondent, the multiple claimants or respondents shall jointly appoint one arbitrator.

Any Party-appointed arbitrator or the third arbitrator resigns or ceases to be able to act, a replacement shall be appointed in accordance with the arrangements provided for in this clause.

The language of the arbitration shall be English. Documents submitted in the arbitration (the originals of which are not in English) shall be submitted together with an English translation.

    19.3.2 Decisions; Timing of Decisions

The arbitrators shall render a written opinion setting forth findings of fact and conclusions of law with the reason therefor stated, within no later than […***…] from the date on which the arbitrators were appointed to the dispute. A transcript of the evidence adduced at the arbitration hearing shall be made and, upon request, shall be made available to each Party.   ***Confidential Treatment Requested***

- 58 -





The time periods set forth in the AAA Arbitration Rules shall be followed; provided however that the arbitrators may modify such time periods as reasonably necessary to render a written opinion in accordance with this Section 19.3.2.

The Arbitrator is empowered to award any remedy allowed by law, including money damages, prejudgment interest and attorneys' fees, and to grant final, complete, interim, or interlocutory relief, including injunctive relief.

This arbitration agreement does not preclude either Party seeking conservatory or interim measures from any court of competent jurisdiction including, without limitation, the courts having jurisdiction by reason of either Party's domicile. Conservatory or interim measures sought by either Party in any one or more jurisdictions shall not preclude the Arbitral Tribunal granting conservatory or interim measures. Conservatory or interim measures sought by either Party before the Arbitral Tribunal shall not preclude any court of competent jurisdiction granting conservatory or interim measures.

In the event that any issue shall arise which is not clearly provided for in this Section 19.3, the matter shall be resolved in accordance with the AAA Arbitration Rules.

Any arbitration proceeding hereunder shall be confidential and the arbitrators shall issue appropriate protective orders to safeguard each Party's Confidential Information. Except as required by law, neither Party shall make (or instruct the arbitrators to make) any public announcement with respect to the proceedings or decision of the arbitrators without prior written consent of the other Party. The existence of any dispute submitted to arbitration, and the award, shall be kept in confidence by the Parties and the arbitrators, except as required in connection with the enforcement of such award or as otherwise required by Applicable Law.

Notwithstanding anything to the contrary in this Agreement, any and all issues regarding the scope, construction, validity and/or enforceability of any Patent Rights shall be determined in a court of competent jurisdiction under the local patent laws of the jurisdictions having issued the Patent Rights in question.

Notwithstanding anything to the contrary in this Agreement, any and all issues regarding a breach or alleged breach of a Party's obligations under Article 16 (Obligation Not to Disclose Confidential Information) shall be determined in a court of competent jurisdiction under the laws of New York, with express exclusion of its conflict of laws principles.

  19.4 Assignment

Neither Party shall have the right to assign the present Agreement or any part thereof to any Third Party other than Affiliates without the prior written approval of the other Party.

  19.5 Debarment and Exclusion

  19.5.1 Past Activities

Each Party represents and warrants that it has never been debarred under 21 U.S.C. §335a, disqualified under 21 C.F.R. §312.70 or §812.119, sanctioned by a Federal Health Care   - 59 -





Program (as defined in 42 U.S.C §1320 a-7b(f)), including without limitation the federal Medicare or a state Medicaid program, or debarred, suspended, excluded or otherwise declared ineligible from any other similar Federal or state agency or program. In the event a Party receives notice of debarment, suspension, sanction, exclusion, ineligibility or disqualification under the above-referenced statutes, such Party shall immediately notify the other Party in writing and such other Party shall have the right, but not the obligation, to terminate this Agreement, effective, at such other Party's option, immediately or at a specified future date.

    19.5.2 Future Activities

Each Party agrees that, to the best of its knowledge, none of its employees or agents conducting activities on its behalf under the Agreement is currently or will be during the term of this Agreement, debarred under 21 U.S.C. §335a, disqualified under 21 C.F.R. §312.70 or §812.119, sanctioned by a Federal Health Care Program (as defined in 42 U.S.C §1320 a-7b(f)), including without limitation the federal Medicare or a state Medicaid program, or debarred, suspended, excluded or otherwise declared ineligible from any other similar Federal or state agency or program. In the event a Party learns that any such employee or agent becomes so debarred, sanctioned, suspended, excluded or declared ineligible or is the subject of proceedings that may result in such debarment, sanction, suspension, exclusion or ineligibility, it will promptly so notify the other Party and will no longer allow such employee or agent to conduct activities under this Agreement.

  19.6 Independent Contractor

No employee or representative of either Party shall have any authority to bind or obligate the other Party to this Agreement for any sum or in any manner whatsoever or to create or impose any contractual or other liability on the other Party without said Party's prior written approval. For all purposes, and not- withstanding any other provision of this Agreement to the contrary, FMI legal relationship to Roche under this Agreement shall be that of independent contractor.

  19.7 Unenforceable Provisions and Severability

If any of the provisions of this Agreement are held to be void or unenforceable, then such void or unenforceable provisions shall be replaced by valid and enforceable provisions that will achieve as far as possible the economic business intentions of the Parties. However the remainder of this Agreement will remain in full force and effect, provided that the material interests of the Parties are not affected, i.e. the Parties would presumably have concluded this Agreement without the unenforceable provisions.

  19.8 Waiver

The failure by either Party to require strict performance and/or observance of any obligation, term, provision or condition under this Agreement will neither constitute a waiver thereof nor affect in any way the right of the respective Party to require such performance and/or observance. The waiver by either Party of a breach of any obligation, term, provision or condition hereunder shall not constitute a waiver of any subsequent breach thereof or of any other obligation, term, provision or condition.

  19.9 Appendices

All Appendices to this Agreement shall form an integral part to this Agreement.   - 60 -





19.10 Entire Understanding

This Agreement contains the entire understanding between the Parties hereto with respect to the within subject matter and supersedes any and all prior agreements, understandings and arrangements, whether written or oral.

  19.11 Amendments

No amendments of the terms and conditions of this Agreement shall be binding upon either Party hereto unless in writing and signed by both Parties.

  19.12 Invoices

All invoices that are required or permitted hereunder shall be in writing and sent by FMI to Roche at the following address or other address as Roche may later provide:

F. Hoffmann-La Roche Ltd Kreditorenbuchhaltung 4070 Basel Switzerland

  19.13 Notice

All notices that 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 FMI, to: Foundation Medicine, Inc. 150 Second Street Cambridge, Massachusetts 02141 Attn: Legal Department Facsimile No.: +1 617 418 2201

if to Roche, to: F. Hoffmann-La Roche Ltd Grenzacherstrasse 124 4070 Basel Switzerland Attn: Legal Department Facsimile No.: +41 61 688 13 96

and: Hoffmann-La Roche Inc. 150 Clove Road Suite 8 Little Falls, New Jersey 07424 US Attn. Corporate Secretary Facsimile No.: +1 973 890-8433   - 61 -





or to such other address as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith.

[Signature Page Follows]   - 62 -





IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the Effective Date.   Foundation Medicine, Inc.

/s/ Steven J. Kafka

Name: Steven J. Kafka

Title: Chief Operating Officer   F. Hoffmann-La Roche Ltd

/s/ Jason Coloma /s/ Stefan Arnold

Name: Jason Coloma Name: Stefan Arnold

Title: Global Head of Venture & Innovation, Roche Partnering Title: Head Legal Pharma   Hoffmann-La Roche Inc.

/s/ John P. Parise

Name: John P. Parise

Title: Authorized Signatory





Appendix 1.28

Excluded Patent Rights

[…***…].   ***Confidential Treatment Requested***

A-1





Appendix 1.57

[…***…]   ***Confidential Treatment Requested***

A-2





Appendix 1.64

[…***…]   ***Confidential Treatment Requested***

A-3





Appendix 3.1.3 Form of Task Order

TASK ORDER FOR MOLECULAR INFORMATION PLATFORM AGREEMENT

This [Insert number of Task Order] Task Order is effective as of the last date below (Task Order # Effective Date.

TASK: [Insert Task Name] FMI Reference Number: [Insert FMI Reference Number]   Roche Contact: [Insert Roche Contact]

This Task is divided into the following six sections:

  A. Task Activities - Description of the Task Activities to be performed.

  B. Schedule - Task start date, projected end date and checkpoint dates (if any).

  C. Dependencies - Obligations, technology requirements.

  D. Deliverables - Identifiable work product resulting from the Task.

  E. Fee - Fixed price or time & materials rates and payment schedules.

  F. Special Terms - Terms applicable to this specific effort not addressed by this Agreement.

  A. Task Activities

[Describe Task Activities to be provided]

  B. Schedule

[Describe schedule for Task Activities to be provided and specify the duration of the Task Activities]

  C. Dependencies

[Describe dependencies as relating to the Task Activities]

  D. Deliverables

[Describe deliverables as relating to the Task Activities]

  E. Fee

[Describe payment schedule and form of payment for the Task Activities]

  F. Special Terms

[Describe any special terms for the Task Activities]

Signatures of Project Managers





FMI ROCHE

By:   By:

Name:   Name:

Title:   Title:

Date:   Date:     A-5





Appendix 3.1.6

[…***…]   ***Confidential Treatment Requested***

A-6





Appendix 3.2.4 Excluded Contracts

[…***…]   ***Confidential Treatment Requested***

A-7





Appendix 3.5.1

FMI Specimen Requirements

















Appendix 16.3

Form of Press Release   A-9
answer:
Highlight the parts (if any) of this contract related to Cap On Liability that should be reviewed by a lawyer. Details: Does the contract include a cap on liability upon the breach of a party’s obligation? This includes time limitation for the counterparty to bring claims or maximum amount for recovery.


question:
Exhibit 10.7

CONTENT LICENSE AGREEMENT

This Content License Agreement (this Agreement) is dated as of October 1, 2005 (the Effective Date) and is by and between Emdeon Corporation a Delaware corporation (Emdeon), with offices at at 669 River Drive, Center 2, Elmwood Park, New Jersey 07407 and WebMD, Inc. a Georgia Corporation (WebMD), with offices at 111 Eighth Avenue, New York, NY 10011. Emdeon and WebMD expressly agree that this Agreement incorporates the Terms and Conditions attached hereto.

WebMD agrees to grant, and Emdeon agrees to accept, a license to use the Content (as defined below) in connection with various software products it has all right title and interest to (the Software) in accordance with the terms of this Agreement.

Content to be provided under this Agreement is specified on Exhibit A (the Content).

Expiration Date: August 31, 2006

AGREED TO AND ACCEPTED:               WebMD, Inc.   Emdeon Corporation               By:     By:

              Name:    Name:

              Title:     Title:



Source: WEBMD HEALTH CORP., S-1/A, 9/8/2005







EXHIBIT A

CONTENT TO BE PROVIDED

WebMD shall provide Content as follows:

The entire set of Anatomical Line Drawings. Anatomical Line Drawings are printable line drawings intended for physicians to draw on and illustrate diseases and conditions to patients.

-2-

Source: WEBMD HEALTH CORP., S-1/A, 9/8/2005







EXHIBIT B

FEES

Fees for the Content shall be $5,000 per year.

Additional anatomical line drawings shall be licensed to Emdeon at an incremental charge of $150 per drawing.

-3-

Source: WEBMD HEALTH CORP., S-1/A, 9/8/2005







TERMS AND CONDITIONS

1. Content.

(a) Description. WebMD hereby agrees to provide Emdeon the Content described on Exhibit A in accordance with the terms of this Agreement.

(b) License. Subject to Emdeon's compliance with the provisions of this Agreement, Emdeon is hereby authorized and licensed to use the Content by making such Content available to third parties verbatim or as source material via the Software. Such license is a non-exclusive, non-transferrable and worldwide license and shall include the right to use, reproduce, copy and publish the Content solely in connection with the Software. Emdeon may determine the placement and formatting of the Content in the Software, but may not change the substance of the Content to any extent whatsoever without WebMD's written approval of the change.

(c) Updates. If WebMD should reprint, issue a new edition, change or modify the edition, or otherwise enhance or edit the Content Emdeon has licensed (collectively, Updates), Emdeon has the option, at no additional cost, to receive the most recent Update. WebMD shall promptly notify Emdeon when a new Update is available.

(d) Format. WebMD agrees to provide Emdeon the Content, including any Updates, in a mutually agreeable format (the Format). WebMD shall bear the cost of any reformatting necessary to provide the Content in the Format. Emdeon shall bear all the cost associated with the integration of the Content into the Software.

(e) WebMD retains absolute editorial control over the Content. Nothing in this Agreement shall restrict WebMD's right to place other marks (such as third party marks) within the Content.

(f) From time to time, WebMD will provide Content that supersedes and replaces Content previously provided (for example, a corrected news article). Promptly after receipt of replacement Content, Emdeon will either (a) remove the superseded Content and replace it with the replacement Content or (b) note at the top of the superseded Content that it has been replaced and give a hypertext link to the replacement Content.

(g) WebMD does not provide medical or diagnostic advice or services. Emdeon agrees that the Content is to be used for informational and educational purposes only. Emdeon agrees that it shall not rely, or promote reliance, on the Content as a substitute for the professional judgment of a health care professional in diagnosing and treating patients.

2. Intellectual Property. As between WebMD and Emdeon, WebMD or its suppliers retain all worldwide right, title, and interest in and to the Content. All rights in the Content not expressly granted by WebMD to Emdeon are reserved to WebMD. Except as expressly provided, no rights or licenses are intended or conveyed herein, whether by implication, estoppel, or otherwise.

3. Term and Termination.

(a) Term. This Agreement shall be effective as of the Effective Date and shall expire on the Expiration Date set forth above (the Initial Term), unless earlier terminated in accordance with Section 3(b). Upon mutual agreement, this Agreement may be renewed for one (1) additional one (1) year term upon the expiration of the Initial Term.

(b) Termination. In addition to expiration of this Agreement as set forth in Section 3(a) hereof in the event either party fails to perform any of its material obligations hereunder, the other party may terminate this Agreement at its election after thirty (30) days written notice to the party of such breach, if such breach is not cured by the party within such thirty (30) day period.

(c) Survival. All representations, warranties and indemnities shall survive the execution, delivery, suspension, expiration and/or termination of this Agreement or any provision hereof. Upon any expiration or termination of this Agreement, Emdeon shall have a reasonable period of time to remove the Content from the Software.

4. Fees and Payment.

-4-

Source: WEBMD HEALTH CORP., S-1/A, 9/8/2005







(a) Payments. In consideration for provision of the Content and all rights granted hereunder, Emdeon hereby agreed to pay WebMD the amounts set forth on Exhibit B of this Agreement. All amounts payable shall be due be due thirty (30) days after the receipt of WebMD's invoice.

(b) Taxes. All payments under the Agreement are exclusive of all federal, state, local and foreign taxes, levies and assessments. Emdeon agrees to bear and be responsible for the payment of all such taxes, levies and assessments imposed on WebMD arising out of this Agreement, excluding any tax based on WebMD's net income. All fees charged hereunder by WebMD are net of any such taxes.

(c) Late payments are subject to an interest charge, at the lower rate of (i) one and one-half percent (1.5%) per month, or (ii) the maximum legal rate.

5. Trademark License.

(a) Emdeon is hereby granted a non-exclusive and worldwide right to use WebMD's trademarks and logos (Marks) for the purpose of identifying the origin of the Content during the term of this Agreement. These Marks may be used by Emdeon, in its sole discretion, in connection with the Content in the Software, and in any form, format, forum, media, medium, means or method by which the Content is delivered. Notwithstanding the foregoing, portions of the Software that contain Content shall include a WebMD Mark in appearance and format mutually agreed to by the parties.

6. Disclaimer. WebMD MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO THE CONTENT OR THE ACCURACY OF THE CONTENT. WEBMD EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND ALL WARRANTIES ARISING FROM CONDUCT, COURSE OF DEALING OR CUSTOM OF TRADE. IN NO EVENT WILL WEBMD OR ITS SUPPLIERS OR LICENSORS BE LIABLE UNDER ANY THEORY OF LIABILITY, HOWEVER ARISING, FOR ANY COSTS OF COVER OR FOR INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY KIND ARISING OUT OF THIS AGREEMENT, OR THE PROVISION OR USE OF CONTENT, EVEN IF WEBMD HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. WEBMD'S AGGREGATE LIABILITY FOR ALL DAMAGES, LOSSES AND CAUSES OF ACTION IN ANY WAY RELATED TO THIS AGREEMENT OR THE CONTENT, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EITHER JOINTLY OR SEVERALLY, SHALL NOT EXCEED FIFTY DOLLARS ($50). THIS SECTION REFLECTS AN ALLOCATION OF RISK BETWEEN THE PARTIES, IS NOT A PENALTY, AND SHALL BE EXCLUSIVE. THIS SECTION SHALL APPLY DESPITE ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED WARRANTY OR REMEDY.

6. Confidentiality.

(a) Confidential Information. Confidential Information means any data, materials or information that is disclosed by either party to the other party during the term hereof, in oral or written form, and which is marked or otherwise reasonably identified as confidential or proprietary. Confidential Information also includes any information described in this Section which either party obtains from a third party under an obligation of confidentiality. Confidential Information does not include any data or information which the receiving party can demonstrate with competent written proof: (i) was already known to it at the time of disclosure; (ii) was independently developed by it without reference to the disclosing party's Confidential Information; (iii) is in the public domain; (iv) was rightfully disclosed to it by a third party without obligation of confidentiality; or (v) is required to be disclosed pursuant to any statutory or regulatory authority or court order, provided the disclosing party is given prompt written notice of such requirement and the scope of such disclosure is limited to the extent possible.

(b) Trade Secrets. Trade Secrets shall mean Confidential Information, including but not limited to technical or non-technical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, or a list of actual or potential customers or suppliers, in any form or format, which is not commonly known by or available to the public and which: (i) derives economic value, actual or potential, from not being generally known to and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

(c) Requirements. During the term of this Agreement and for so long as such information remains a trade secret under applicable law, neither party will, except as otherwise expressly directed by the other

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Source: WEBMD HEALTH CORP., S-1/A, 9/8/2005







party, use, copy, or disclose, or permit any unauthorized person access to, any of the other party's Trade Secrets, except as expressly permitted herein and necessary for accomplishment of activities required hereby. During the term of this Agreement and for a period of two (2) years after termination hereof, neither party will use, copy, or disclose, or permit any unauthorized person access to, any of the other party's Confidential Information, except as expressly directed by such party or as permitted herein. The receiving party agrees to take reasonable precautions (no less rigorous than the receiving party takes with respect to its own comparable Confidential Information and Trade Secrets) to prevent unauthorized or inadvertent disclosure of the Confidential Information and Trade Secrets of the disclosing party.

(d) Return of Information. The receiving party will, at the request of the disclosing party, during the term of this Agreement or thereafter (i) promptly return all Confidential Information and Trade Secrets held or used by the receiving party in whatever form, or (ii) at the discretion of the disclosing party, promptly destroy all such Confidential Information and Trade Secrets, including all copies thereof, and those portions of all documents that incorporate such Confidential Information and/or Trade Secrets.

7. Assignment. Neither party shall have the right to sell, assign, transfer or hypothecate (all hereinafter referred to as assign or assignment) this Agreement, or delegate any of its obligations hereunder, voluntarily or by operation of law, without the prior written consent of the other party. Any such purported assignment or delegation without such prior written consent shall be null and void and have no force and effect.

8. General.

(a) Notices. All material notices and other communications required or permitted under this Agreement shall be in writing and notices will be deemed given three (3) days after they are sent by first class mail, return receipt requested, and one (1) day after they are sent by overnight courier or upon receipt if delivered by hand delivery, to the receiving party's address as set forth in the first paragraph above, or to such other address that the receiving party may have provided in writing to the other party for purposes of receiving notices as provided in this Section.

(b) Governing Law, Venue and Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without application of conflict of laws principles.

(c) Force Majeure. Neither party shall be held responsible for any inability to perform occasioned by labor strife, war, riot, fires, embargoes, floods, government requirements, or other similar events beyond the control of such party.

(d) Relationship. WebMD's relationship to Emdeon shall be that of an independent contractor. Nothing herein shall create any association, partnership, joint venture or agency relationship between WebMD and Emdeon. Without limiting the generality of the foregoing, it is expressly understood and agreed that WebMD shall have no authority whatsoever to make any representations or commitments to or enter into any agreements with any third party on behalf of Emdeon.

(e) Severability and Non-Waiver. In the event any provision of this Agreement shall be found to be contrary to any law or regulation of any federal, state or municipal administrative agency or body, the other provisions of this Agreement shall not be affected thereby but shall notwithstanding continue in full force and effect. No waiver by either party hereto of any breach or default by the other party shall be construed to be a waiver of any other breach or default by such other party. Resort to any remedies referred to herein shall not be construed as a waiver of any other rights and remedies to which either party is entitled under this Agreement or otherwise nor shall an election to terminate be deemed an election of remedies or a waiver of any claim for damages or otherwise.

(f) Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed original, but all of which will constitute one and the same instrument.

(g) Complete Agreement. This Agreement, including the attached Exhibits, constitutes the entire understanding between the parties with respect to the subject matter hereof and all prior understandings, whether oral or written, have been merged herein and are superseded hereby. This Agreement may not be altered or modified except in writing signed by both parties hereto.

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Source: WEBMD HEALTH CORP., S-1/A, 9/8/2005
answer:
Highlight the parts (if any) of this contract related to Cap On Liability that should be reviewed by a lawyer. Details: Does the contract include a cap on liability upon the breach of a party’s obligation? This includes time limitation for the counterparty to bring claims or maximum amount for recovery.


question:
Exhibit 10.19   STRATEGIC ALLIANCE AGREEMENT

Among   SUMITOMO MITSUI BANKING CORPORATION, SMBC NIKKO SECURITIES INC.   And   MOELIS & COMPANY HOLDINGS LP, MOELIS & COMPANY HOLDINGS GP LLC   Dated December 27, 2011





  TABLE OF CONTENTS                                               ARTICLE I.       CERTAIN DEFINITIONS; INTERPRETATION.       1.1   Certain Definitions   2   1.2   Interpretations   5               ARTICLE II.       STRATEGIC ALLIANCE.       2.1   Strategic Alliance   6   2.2   Obligations of the Parties   6               ARTICLE III.       SCOPE.       3.1   Scope   6   3.2   Covered Businesses   6   3.3   Covered Regions   6   3.4   Japanese Companies   7   3.5   Client   7   3.6   Corporate Lending Business   7               ARTICLE IV.       FEE ALLOCATION.       4.1   General Allocation   7   4.2   Certain Moelis Holdings Sell-side Assignments   7





4.3   Target Transactions   8   4.4   Discretionary Fee Sharing   8   4.5   Primary Fee Allocation Criteria   8               ARTICLE V.       NON-CIRCUMVENTION/NON-SOLICITATION.       5.1   Non-Circumvention   8   5.2   Non-Solicitation   8   5.3   Japan Office   9     i





                                                    ARTICLE VI.       SENIOR SPONSORSHIP; ALLIANCE REVIEW COMMITTEE.       6.1   Alliance Review Committee   9               ARTICLE VII.       TRAINING AND DEVELOPMENT.       7.1   Training and Development   9   7.2   Secondment Program   10               ARTICLE VIII.       ENGAGEMENTS.       8.1   Engagement Letters and other Agreements   10   8.2   Expenses   11   8.3   Conflict Clearance   11   8.4   Compliance with Laws   11               ARTICLE IX.       JOINT MARKETING.       9.1   Joint Marketing   11               ARTICLE X.       CONFIDENTIALITY.





  10.1   Confidentiality   11               ARTICLE XI.       TERM       11.1   Term   12   11.2   Termination   13   11.3   Effect of Termination   13               ARTICLE XII.       CERTAIN RIGHTS OF SMBC/NIKKO.       12.1   Advisory Board   14   12.2   Right of First Refusal   14     ii







                                                12.3   Moelis General Partner's Consent to Certain Transfers   15   12.4   Certain Transfer Matters   15   12.5   Amendments to the Moelis Holdings Agreement   17   12.6   Percentage Interest Limit   18               ARTICLE XIII.       REGISTRATION RIGHTS.       13.1   Registration   18   13.2   Piggyback Registration   19   13.3   Reduction of Size of Underwritten Offering   20   13.4   Registration Procedures   21   13.5   Conditions to Offerings   23   13.6   Suspension Period   24   13.7   Market Stand-Off Agreement   25   13.8   Registration Expenses   26   13.9   Indemnification; Contribution   26   13.10   Rule 144   29   13.11   Transfer of Registration Rights   29   13.12   Termination of Registration Rights   29               ARTICLE XIV.       REPRESENTATIONS AND WARRANTIES; CONDUCT OF BUSINESS       14.1   Representations and Warranties of Moelis   29   14.2   Representations and Warranties of SMBC/Nikko   30   14.3   Survival of Covenants, Representations and Warranties   30               ARTICLE XV.





  MISCELLANEOUS       15.1   Expenses; No Partnership or Joint Venture   31   15.2   Notice   31   15.3   Entire Agreement; Amendment; Waivers; Counterparts   31   15.4   No Assignment   32   15.5   Obligation and Responsibilities of SMBC/Nikko   32   15.6   Separability   32   15.7   Compliance with Laws   32   15.8   Governing Laws; Jurisdiction   32   15.9   Effect on Prior Agreement   33   15.10   Good Faith Discussion; Further Assurances   33     iii





  STRATEGIC ALLIANCE AGREEMENT   This Strategic Alliance Agreement is entered into as of December 27, 2011 by and among Sumitomo Mitsui Banking Corporation (SMBC), a Japanese corporation with its head office at 1-2, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-0006, Japan and its subsidiary SMBC Nikko Securities Inc. (Nikko and together with SMBC, SMBC/Nikko), a Japanese corporation with its head office at 3-1, Marunouchi 3-chome, Chiyoda-ku, Tokyo 100-8325, Japan, on the one hand, and Moelis & Company Holdings LP (Moelis Holdings), a Delaware limited partnership with offices at 399 Park Avenue, New York, NY 10022, United States, and Moelis & Company Holdings GP LLC, a Delaware limited liability company with offices at 399 Park Avenue, New York, NY 10022, United States (Moelis General Partner, and together with Moelis Holdings, the Moelis Entities), on the other hand. SMBC, Nikko, Moelis Holdings and Moelis General Partner are each referred to herein as a party and collectively referred to as the parties.   W I T N E S S E T H:   WHEREAS, on March 1, 2011, SMBC/Nikko and Moelis Holdings entered into that certain Strategic Alliance Agreement (Phase I) with respect to certain investment banking businesses in certain regions involving Japanese companies (the Prior Agreement);   WHEREAS, on the date hereof, SMBC entered into an Investment and Subscription Agreement (as modified or amended, the Subscription Agreement) with Moelis Holdings and Moelis General Partner, pursuant to which SMBC has agreed to acquire 57,364 newly issued Partnership Interests;   WHEREAS, the parties wish to amend and restate the Prior Agreement to further set forth the understanding of the parties with respect to certain investment banking businesses in certain regions involving Japanese companies and to set forth certain agreements with respect to certain transfer and registration rights relating to the Partnership Interests as of the Effective Date; and   WHEREAS, the execution and delivery of this Agreement is a condition to the closing of the transactions contemplated by the Subscription Agreement.   NOW, THEREFORE, in consideration of the foregoing and the respective promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged:





  ARTICLE I.   CERTAIN DEFINITIONS; INTERPRETATION.   1.1 Certain Definitions.   Agreement means this Strategic Alliance Agreement, as amended or modified from time to time in accordance with Section 15.3, including all schedules and exhibits hereto.   Alliance Review Committee has the meaning given in Section 6.1.   Client has the meaning given in Section 3.5.   Closing means the Closing as defined in the Side Letter.   Confidential Information has the meaning given in Section 10.1.   control shall mean possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity whether through ownership of voting securities, by contract or otherwise, including the ability to elect the majority of the directors or the members of a similar governing body of such entity.   Covered Businesses has the meaning given in Section 3.2.   Covered Regions has the meaning given in Section 3.3.   Demand Notice has the meaning set forth in Section 13.1(a)(i).   Demand Registration has the meaning set forth in Section 13.1(a)(i).   Effective Date has the meaning set forth Section 11.1.   Indemnified Party has the meaning set forth in Section 13.9(c).   Indemnified Persons has the meaning set forth in Section 13.9(a).   Indemnifying Party has the meaning set forth in Section 13.9(c).   Introduces and Introduced means that a party arranges or arranged an initial substantive meeting (in person or by phone) between a senior decision maker at the Client and the other party.   IPO means an initial underwritten public offering and sale of Partnership Interests (or any securities of Moelis Holdings or any successor entity into which Partnership Interests are converted, exchanged or redesignated) for cash pursuant to an effective registration statement (other than on Form S-4 or S-8 or a comparable form).   2





  Issuer FWP has the meaning assigned to issuer free writing prospectus in Rule 433 under the Securities Act.   Japanese Companies has the meaning given in Section 3.4.   Japanese Competitors means any Japanese financial institution that engages in an investment banking business or any other Covered Business in Japan or outside Japan.   KM means Mr. Ken Moelis and any entity or person controlled by or affiliated with Mr. Moelis, including Moelis Manager, any family trust or otherwise, through which Mr. Ken Moelis holds his Partnership Interests.   Losses has the meaning set forth in Section 13.9(a).   Main-Advisor Party has the meaning set forth in Section 8.4.   Major Japanese Competitors means the following entities together with any ultimate parents controlling such entities: Mitsubishi UFJ Financial Group, Inc., Mizuho Financial Group, Inc., Nomura Holdings, Inc., Daiwa Securities Group Inc., Sumitomo Mitsui Trust Holdings, Inc., Resona Holdings, Inc., Shinsei Bank, Limited., Orix Corporation, any of their respective subsidiaries as of the date of this Agreement that substantially engages in an investment banking business or any other Covered Business in Japan, and any respective successors of any of the entities set forth herein.   Minimum Aggregate Fees has the meaning given in Section 4.3.   Moelis Competitor means any business enterprise that is engaged in, or owns or controls a significant interest in any entity that, in either case, is engaged, primarily or in any substantial manner in, investment banking activities or any other business activities that Moelis Holdings and/or its affiliates are engaged in primarily or in any substantial manner; provided, however, that no private equity fund, sovereign wealth fund or merchant bank shall be deemed a Moelis Competitor.   Moelis Entities has the meaning set forth in the preamble to this Agreement.   Moelis General Partner has the meaning set forth in the preamble to this Agreement.   Moelis Holdings has the meaning set forth in the preamble to this Agreement.   Moelis Holdings Agreement means that certain Limited Partnership Agreement of Moelis Holdings, dated as of July 1, 2011 (as amended).   Moelis Manager means Moelis & Company Manager LLC, a Delaware limited liability company.   Nikko has the meaning set forth in the preamble to this Agreement.   Nikko Affiliate has the meaning set forth in Section 10.1.   3





  Non-Japanese Competitors means the following entities together with any ultimate parents controlling such entities: Evercore Partners Inc., Hawkpoint Partners Limited, Perella Weinberg Partners LP, Sagent Advisors Inc., DC Advisory Partners Limited and Stifel Financial Corp. (which, for the avoidance of doubt, includes Stifel Nicolaus Weisel (f/k/a Thomas Weisel)).   Partnership Interests means limited partnership interests and any securities of Moelis Holdings or any successor entity into which Partnership Interests are converted, exchanged or redesignated, including in connection with any recapitalization of Moelis Holdings for the purpose of conducting the IPO.   party or parties has the meaning set forth in the preamble to this Agreement.   Piggyback Registration has the meaning set forth in Section 13.2.   Prior Agreement has the meaning set forth in the recitals to this Agreement.   Prospectus means the prospectus (including any preliminary prospectus and any final prospectus) included in any Registration Statement, as amended or supplemented by any free writing prospectus, whether or not required to be filed with the SEC, prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement and by all other amendments and supplements to the prospectus, and all material incorporated by reference in such prospectus.   Registrable Securities means all SMBC Units beneficially owned by the SMBC Unit-Holders at any time, and any securities of Moelis Holdings or any successor entity into which the SMBC Units are converted, exchanged or redesignated, including in connection with any recapitalization of Moelis Holdings for the purpose of conducting the IPO; provided, however, that an SMBC Unit shall cease to be a Registrable Security when (i) it has been effectively registered under the Securities Act and disposed of in accordance with the Registration Statement covering it, or (ii) it is distributed to the public pursuant to Rule 144.   Registration Statement means any registration statement of Moelis Holdings that covers Registrable Securities pursuant to the provisions of this Agreement, including the prospectus, amendments and supplements to such registration statement, including pre- and post- effective amendments, and all exhibits and all material incorporated by reference in such registration statement.   Representative means, with respect to any person, such person's, or such person's subsidiaries', directors, officers, employees, accountants, investment bankers, commercial bank lenders, attorneys and other advisors or representatives (including the employees or attorneys of such accountants, investment bankers or attorneys).   Rule 144 means Rule 144 promulgated under the Securities Act or any similar rule or regulation hereafter adopted by the Securities and Exchange Commission having substantially the same effect as such rule.   4





  Side Letter means the letter from Moelis General Partner and Moelis Holdings to SMBC, re Investment in Moelis & Company Holdings LP, dated the date hereof.   SMBC has the meaning set forth in the preamble to this Agreement.   SMBC Affiliate has the meaning set forth in Section 10.1.   SMBC Competitor means (i) any of the Japanese Competitors, (ii) each of the Non-Japanese Competitors, (iii) any entity that is controlled by any Japanese Competitor or any Non-Japanese Competitor and that engages in an investment banking business or any other Covered Business and (iv) any entity that is under common control with or controls any Major Japanese Competitor and that engages in an investment banking business or any other Covered Business.   SMBC Units means all Partnership Interests, including Common Units, held by an SMBC Unit-Holder, which shall include all Partnership Interests acquired pursuant to the Subscription Agreement or thereafter.   SMBC Unit-Holders has the meaning set forth in Section 13.1(a)(i).   Securities Act means the Securities Act of 1933, as amended.   SMB C/Nikko has the meaning set forth in the preamble to this Agreement.   Strategic Alliance means the rights and obligations of the parties set forth in ARTICLE II to XII of this Agreement.   Sub-Advisor Party has the meaning set forth in Section 8.4.   Subscription Agreement has the meaning set forth in the recitals to this Agreement.   Suspension Period has the meaning set forth in Section 13.6.   Underwritten Offering means a public offering of securities registered under the Securities Act in which an underwriter, placement agent or other intermediary participates in the distribution of such securities.   1.2 Interpretations.   (a) Capitalized terms used without definition herein shall have the respective meanings given to such terms in the Moelis Holdings Agreement.   5





  ARTICLE II.   STRATEGIC ALLIANCE.   2.1 Strategic Alliance. SMBC/Nikko and Moelis Holdings wish to continue their Strategic Alliance with respect to certain investment banking business in certain regions involving Japanese Companies as set forth herein, and will continue to offer the other the same quality or level of services that were offered under the Prior Agreement. SMBC/Nikko and Moelis Holdings will help the other continue the growth of the other party's investment banking business.   2.2 Obligations of the Parties. Each of the parties acknowledge and agree that each other party may, and at the reasonable request from another party, shall, cause one or more of such party's affiliates to act on behalf of such party in the performance of its duties or exercise of its rights under this Agreement.   ARTICLE III.   SCOPE.   3.1 Scope. Subject to the terms and conditions set forth in this Agreement and to the extent permitted by pre-existing arrangements of either party, SMBC/Nikko, on the one hand, and Moelis Holdings, on the other hand, shall use their commercially reasonable best efforts to work together on Covered Businesses involving Japanese Companies where all principal parties involved are located within Covered Regions. The Strategic Alliance shall continue to be non-exclusive.   3.2 Covered Businesses. Covered Businesses shall mean M&A advisory, restructuring advisory (such as advising on recapitalization and restructuring transactions), capital markets advisory (including agency private placements), risk advisory (such as advising on investing, structuring, managing, restructuring and divesting risk exposures and complex assets classes) and merchant banking businesses (such as principal investment) to the extent the applicable target transaction requirement set forth in Section 4.3 of this Agreement is satisfied, but specifically excludes (unless the parties mutually agree to include a specific transaction) (i) underwritten offerings and bank or similar committed financings, (ii) purely domestic Japanese transactions such as transactions solely between/among companies organized or headquartered in Japan (including any transactions of or by subsidiaries or affiliates of such companies located throughout the world conducted as part of any such transaction), (iii) any transactions introduced to a party by a person or entity (other than a principal party to the transaction) not affiliated with such party and (iv) transactions where a party, its subsidiary or controlled affiliate is a principal party.   3.3 Covered Regions. Covered Regions shall mean Japan, North America, Europe, the Middle East and North Africa, Australia, Hong Kong and China. For the avoidance of doubt, the definition of Covered Regions does not prohibit the parties from   6

  discussing or working together on Covered Businesses in regions outside the Covered Regions, such as non-Japan/Hong Kong/China Asia.   3.4 Japanese Companies. Japanese Companies shall mean (i) companies organized or headquartered in Japan and their subsidiaries and controlled affiliates outside Japan, (ii) subsidiaries and controlled affiliates organized or headquartered in Japan of parent companies in the Covered Regions other than Japan and (iii) Japanese governmental and quasi-governmental entities and affiliates.   3.5 Client. A Client is (i) with respect to SMBC/Nikko, a Japanese Company or any other person or entity within Covered Regions that SMBC/Nikko Introduces to Moelis Holdings pursuant to this Agreement and (ii) with respect to Moelis Holdings, a Japanese Company or any other person or entity within Covered Regions that Moelis Holdings Introduces to SMBC/Nikko pursuant to this Agreement.   3.6 Corporate Lending Business. SMBC/Nikko and Moelis Holdings will continue to work together in good faith to seek ways to expand the Strategic Alliance to cover corporate lending opportunities where Moelis Holdings sources corporate lending opportunities for SMBC/Nikko to Moelis Holdings' clients and works with SMBC/Nikko to provide SMBC/Nikko clients and relationships access to Moelis Holdings capabilities in Covered Businesses. The parties may enter into additional agreements and/or addenda to this Agreement designed to elaborate upon and clarify the arrangements contemplated by this Section 3.6.   ARTICLE IV.   FEE ALLOCATION.   4.1 General Allocation. The parties agree to share fees 50%/50% on assignments within the scope of this Agreement set forth in Section 3.1 where SMBC or Nikko, on the one hand, and Moelis Holdings, on the other hand, are jointly retained as co-advisors by a Client for such assignments, except as otherwise mutually agreed with respect to a specific matter by the parties. The parties agree that the parties will generally seek to be jointly retained as co-advisors by a Client on assignments within the scope of this Agreement.   4.2 Certain Moelis Holdings Sell-side Assignments. In the case of M&A sell-side assignments originated by Moelis Holdings within the scope of this Agreement set forth in Section 3.1 for which SMBC or Nikko does not serve (together with Moelis Holdings) as a co-advisor to the seller, if SMBC or Nikko introduces the actual buyer, and neither SMBC nor Nikko obtains a mandate to serve as an advisor to such buyer in connection with such acquisition, Moelis Holdings will pay SMBC/Nikko an introduction fee equal to 15% of the sale transaction fee paid to Moelis Holdings. There will be no other sharing of fees received from the seller between Moelis Holdings and SMB C/Nikko on any such assignments.   7









  4.3 Target Transactions. The Strategic Alliance will target transactions on which both parties work together as co-advisors to a Client on the terms and conditions set forth in Section 3.1 with minimum aggregate fees (the Minimum Aggregate Fees) of: (1) M&A advisory, $3 million, (2) restructuring advisory, $2 million and (3) capital markets advisory and risk advisory, $1 million.   4.4 Discretionary Fee Sharing. One or more senior representatives of Moelis Holdings or SMBC/Nikko, as the case may be, will consider on a case by case basis if requested by a senior representative of the other party, discretionary fee sharing when Moelis Holdings or SMBC/Nikko, as the case may be, provides demonstrable value.   4.5 Primary Fee Allocation Criteria. The parties may mutually agree on a fee allocation different from the foregoing allocations in good faith based on, among other things, the following criteria:   (a) Whether one or both parties have an important relationship that is crucial to securing an assignment   (b) Resource contribution   (c) Product expertise   (d) Industry expertise   (e) Transaction size   (f) Resource constraints   ARTICLE V.   NON-CIRCUMVENTION/NON-SOLICITATION.   5.1 Non-Circumvention. Subject to pre-existing arrangements of either party, each party agrees not to circumvent this Agreement and to act in good faith in the spirit of the Strategic Alliance. Each party shall ensure that its controlled affiliates comply with the terms and conditions of this Agreement.   5.2 Non-Solicitation. Each of SMBC/Nikko and Moelis Holdings agrees not to solicit or hire any employee of the other party during the term of this Agreement and for a period of 12 months thereafter; provided, however, that the foregoing restriction shall not apply to general solicitations to the public that are not specifically directed to employees of other party (or employment of applicants to such solicitations). Each of SMBC/Nikko and Moelis Holdings agrees, during the term of this Agreement (except pursuant to this Agreement) and for a period of 12 months thereafter, not to solicit any Client Introduced by the other party in connection with an assignment on Covered   8





  Businesses involving Japanese Companies where all principal parties involved are located within Covered Regions.   Notwithstanding the foregoing, this provision shall not prevent any party from soliciting or otherwise contacting any Client (i) for any purpose other than working on or obtaining an assignment on Covered Businesses involving Japanese Companies in Covered Regions where all principal parties involved are located within Covered Regions or (ii) with whom such party (or its employees or consultants) has had a pre-existing relationship, including, but not limited to, a pre-existing contractual or business relationship, prior to the Introduction of such Client in connection with an assignment covered by this Agreement.   5.3 Japan Office. Moelis Holdings agrees not to open an office in Japan conducting Covered Businesses during the term of this Agreement.   ARTICLE VI.   SENIOR SPONSORSHIP; ALLIANCE REVIEW COMMITTEE.   6.1 Alliance Review Committee. As soon as reasonably practicable following the Effective Date, SMBC/Nikko and Moelis Holdings shall form a six person committee comprised of two senior executives from each of SMBC, Nikko and Moelis Holdings to review and discuss the progress of the Strategic Alliance (the Alliance Review Committee). Each party shall notify the other parties if it replaces either of its designees to the Alliance Review Committee. The Alliance Review Committee will meet annually and will have the authority to recommend changes to the Strategic Alliance or this Agreement if deemed appropriate. For the avoidance of doubt, the recommendations of the Alliance Review Committee will not be binding upon any party unless and until this Agreement is amended or modified pursuant to Section 15.3.   ARTICLE VII.   TRAINING AND DEVELOPMENT.   7.1 Training and Development. During the term of this Agreement, Moelis Holdings shall offer certain full-time analysts and associates of SMBC/Nikko, or employees with similar responsibilities, the opportunity to participate annually in Moelis Holdings' training program for newly hired full-time analysts and associates, to the extent that Moelis Holdings' holds such a program. SMBC/Nikko shall reimburse Moelis Holdings for all out-of-pocket and allocated expenses incurred by Moelis Holdings in connection with SMBC/Nikko employees' attending the Moelis Holdings training program.   9





  7.2 Secondment Program.   (a) During the term of this Agreement, SMBC/Nikko shall second 3 or 4 bankers to Moelis Holdings' New York office and second 2 or 3 bankers to Moelis Holdings' London office as local staff of Moelis Holdings. Moelis Holdings shall use its commercially reasonable best efforts to second a banker to SMBC/Nikko's Tokyo office as local staff of SMBC/Nikko. All secondees shall be investment bankers that serve in a position with responsibilities typically associated with an Associate or a Vice President at a major international investment bank, except as otherwise agreed between SMB C/Nikko and Moelis Holdings.   (b) Each party shall be responsible for all out-of-pocket and allocated expenses incurred by its employees who are seconded. A party's secondee(s) must be reasonably acceptable to the other parties and shall agree to be subject to any policies and procedures, including without limitation, relating to confidential and proprietary information and securities and other trading activity limitations, that the party accepting such secondee may determine are necessary and/or appropriate.   (c) SMBC/Nikko and Moelis Holdings will from time to time during the term of this Agreement, review and discuss the secondment program and such additions and changes the parties consider appropriate to further the Strategic Alliance.   ARTICLE VIII.   ENGAGEMENTS.   8.1 Engagement Letters and other Agreements.   (a) Parties. Where the parties are executing an assignment together pursuant to this Agreement, it is anticipated that generally both parties (or one of their respective affiliates) will sign the engagement letter (and, where necessary, other relevant agreements) with the relevant Client in connection with the assignment. In certain limited circumstances mutually agreed upon by the parties, one party may sign the engagement letter with the Client and then such party would also sign an agreement with the other party or parties for such party or parties to provide services to the Client and receive compensation, indemnification and other protections after receiving the written consent of such Client.   (b) Rights and Obligations. The engagement letters will (unless otherwise agreed) include a provision to the effect that: The rights and obligations of SMBC, Nikko and Moelis Holdings are the several rights and obligations of SMBC, Nikko and Moelis Holdings and that each of SMBC, Nikko or Moelis Holdings shall not be liable or responsible for the actions or omissions of the others.   (c) Payment. The engagement letters will (unless otherwise agreed) provide that payments would be made to either SMBC/Nikko or Moelis Holdings and SMBC/Nikko and Moelis Holdings will split the fees pursuant to this Agreement.   10





  8.2 Expenses. If only one party is engaged for an assignment, such party will submit expenses of the other parties for reimbursement by the Client. If there is an expense cap or any other expense reimbursement reduction, the parties will (unless otherwise agreed) bear the cost of such unreimbursed expenses in the same proportion as the parties agreed to split the fees from such assignment.   8.3 Conflict Clearance. Each party shall have its own separate conflict identification, business selection and client vetting procedures. The parties will cooperate to identify and resolve potential conflict issues.   8.4 Compliance with Laws. In the case where one party executes an engagement letter with a Client (the Main-Advisor Party) and the Main-Advisor Party appoints and retains the other party or parties as a sub-advisor (the Sub-Advisor Party), each of the Main-Advisor Party and the Sub-Advisor Party shall comply in all material respects with all applicable laws or regulations, including the UK Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 and any other similar anti-bribery act in its execution and performance of its services for the Covered Businesses for such Client. If either of the Main-Advisor Party or Sub-Advisor Party breaches its obligations set forth in this Section 8.4, the non- breaching party shall have the right to immediately terminate its sub-advisor agreement or any other similar agreement entered into with respect to the Covered Businesses for such Client by providing a written notice to the breaching party that specifically identifies how the breaching party has breached this Section 8.4.   ARTICLE IX.   JOINT MARKETING.   9.1 Joint Marketing. The parties shall establish a joint marketing effort for the Strategic Alliance. Among other things, the parties shall agree upon a joint press release and communication strategy for announcing the Strategic Alliance and certain joint marketing materials which either party may use in marketing to Clients.   ARTICLE X.   CONFIDENTIALITY.   10.1 Confidentiality. The parties each agree to keep confidential all non-public information disclosed by another party or a Client or prospective Client or a representative thereof in connection with the Strategic Alliance (including this Agreement) (Confidential Information), (i) except to subsidiaries, affiliates or their professional advisors (and provided that the Party shall cause the recipient to assume and perform the confidentiality obligations equivalent to those imposed on such party under this Agreement and shall be responsible for breach of such obligations by such recipient) and (ii) except as required by judicial process or such party's regulatory authorities, and   11





  to use such information only for purposes of the Strategic Alliance (including this Agreement); provided, however, that Confidential Information shall not include (i) information that is already in the receiving party's possession when it is received and not subject to a confidentiality agreement or other obligation of confidentiality to the disclosing party, (ii) information separately obtained by the receiving party from a third party that is not known or should not reasonably be known to the person receiving such information to be bound by a confidentiality agreement or other obligation of confidentiality to the disclosing party and (iii) information independently developed by the receiving party without any use of Confidential Information. In the event that any disclosure of Confidential Information is required by judicial process or such party's regulatory authorities, the party required to make such disclosure shall, to the extent commercially practicable and legally permissible, consult with the party that provided such Confidential Information prior to making any such disclosure. Nothing in this section shall restrict the receiving party's ability to make any legally required disclosures of Confidential Information to bank examiners or other supervisory authorities having jurisdiction over the receiving party. Each of Moelis Holdings and SMBC/Nikko shall also ask the other if it has internally cleared the receipt of non-public information regarding a Client or prospective Client before the party providing such information delivers any such information to the receiving party. Due to Japanese firewall restrictions, (i) SMBC will not disclose Confidential Information relating to its Clients to Nikko (ii) Nikko will not disclose Confidential Information relating to its Clients to SMBC and (iii) Moelis Holdings shall not disclose Confidential Information relating to a Client received from SMBC or any of its affiliates (excluding Nikko and any person that would be an affiliate of Nikko if Nikko were not an affiliate of SMBC) (an SMBC Affiliate) to Nikko or its affiliates (excluding SMBC and any person that would be an affiliate of SMBC if Nikko were not an affiliate of SMBC) (a Nikko Affiliate) or Confidential Information relating to a Client received from Nikko or any Nikko Affiliate to SMBC or any SMBC Affiliate, without first obtaining such Client's consent to such disclosure. This Section 10.1 shall terminate with respect to Confidential Information relating to a (prospective) Client, two years following receipt of such information, and with respect to any other Confidential Information, two years following the termination of this Agreement.   ARTICLE XI.   TERM   11.1 Term. This Agreement shall be effective as of January 1, 2012 (the Effective Date), provided, however, that, ARTICLE XII and ARTICLE XIII shall not be effective until after the Closing. The initial term of this Agreement shall begin on the Effective Date and continue for three (3) years, subject to the prior termination rights provided below. At the end of such initial term, and any renewed term, as applicable, this Agreement shall automatically renew for an additional one (1) year term, unless a party provides written notice to the other parties at least six (6) months prior to the end of the   12





  initial term. At any time during a renewed term, this Agreement may be terminated by any party on six (6) months prior notice that it wishes to terminate the Agreement.   11.2 Termination. This Agreement may be terminated as follows:   (a) effective immediately upon mutual agreement of each of the parties;   (b) immediately by a non-breaching party, if either SMBC or Nikko, on the one hand, or Moelis Holdings, on the other hand, shall materially breach the terms and conditions of this Agreement, and such breach is continuing after written notice has been given by the non- breaching party to the breaching party that specifically identifies how the breaching party has breached this Agreement, and a reasonable period of time has elapsed in which to cure such breach, which period shall not be less than ninety (90) calendar days from the date that such breaching parties receive such notice;   (c) immediately upon the bankruptcy, insolvency, or making of the assignment for the benefit of creditors by a party; unless such termination is waived by the parties in writing not subject to any of the foregoing proceedings;   (d) by any party if the SMBC Unit-Holders cease to hold any Partnership Interests as a result of sale or transfer pursuant to Section 12.4 of this Agreement or Section 8.4 of the Moelis Holdings Agreement, such termination to be effective six (6) months following the date on which the other parties receive written notice of such party's election to terminate this Agreement; and   (e) immediately by Moelis Holdings if the Closing has not occurred by March 1, 2012 or such later date if the Closing is delayed pursuant to the terms of the Subscription Agreement.   11.3 Effect of Termination. In the event of the termination of this Agreement, no party shall have any liability to any other party in respect of this Agreement except for any liabilities relating to any breach or any payment obligation hereunder and arising prior to such termination; provided, that, Sections 5.2 (Non-Solicitation) and 8.2 (Expenses) and ARTICLE X (Confidentiality), XII (Certain Transfer Rights of SMBC/Nikko) (other than Section 12.6, after the SMBC Unit-Holders no longer hold any Partnership Interests), XIII (Registration Rights) and XV (Miscellaneous) shall survive any expiration or termination of this Agreement; provided, however, if Moelis Holdings terminates this agreement pursuant to Section 11.2(b) due to a material breach by either SMBC or Nikko, or if this Agreement is terminated pursuant to Section 11.2(c) due to the bankruptcy, insolvency or making of the assignment for the benefit of creditors by either SMBC or Nikko, ARTICLE XII (Certain Transfer Rights of SMBC/Nikko) and XIII (Registration Rights) shall not survive such termination; provided, further, that, if this Agreement is terminated prior to the Closing, XII (Certain Transfer Rights of SMB C/Nikko), XIII (Registration Rights) shall not survive such termination.   13





  ARTICLE XII.   CERTAIN RIGHTS OF SMBC/NIKKO.   12.1 Advisory Board. During the term of the Strategic Alliance, SMBC/Nikko shall have the right to appoint one person to serve as a member of the Advisory Board of Moelis Holdings.   12.2 Right of First Refusal.   (a) Prior to the IPO and during the term of the Strategic Alliance, SMBC shall have the right of first refusal to purchase all (but not less than all) Additional Units that Moelis Holdings proposes to issue to an SMBC Competitor, including (x) in a proposed issuance that is excepted from Section 3.4.2 of the Moelis Holdings Agreement as an issuance to a Strategic Investor, and (y) in a proposed issuance that is subject to Section 3.4.2 of the Moelis Holdings Agreement, to the extent that the Partners do not exercise in full their right of first refusal thereunder. The above rights are in addition to the pro rata right of first refusal granted to all Partners with respect to issuances of Additional Units in Section 3.4.2 of the Moelis Holdings Agreement.   (b) In the event Moelis Holdings proposes to undertake an issuance of Additional Units to which clause (x) of Section 12.2(a) applies, it shall give SMBC written notice of its intention describing the price and terms upon which Moelis Holdings proposes to issue the same. SMBC shall have ten (10) days from the date of delivery of any such notice to agree to purchase all, but not less than all, of such Additional Units, for the price and upon the terms specified in the notice, by delivering written notice to Moelis Holdings. Following the expiration of such 10-day period, Moelis Holdings shall have one hundred and eighty- (180-) days to sell or enter into an agreement to sell the Additional Units with respect to which SMBC's right of first refusal was not exercised, at a price and upon terms no more favorable to the purchasers of such securities than specified in Moelis Holdings' notice. In the event Moelis Holdings has not sold the Additional Units or entered into an agreement to sell the Additional Units within such one hundred and eighty- (180-) day period, Moelis Holdings shall not thereafter issue or sell any Additional Units without first complying again with this Section 12.2.   (c) In the event Moelis Holdings proposes to undertake any issuance of Additional Units to which clause (y) of Section 12.2(a) applies, SMBC shall specify in its notice delivered to Moelis Holdings pursuant to Section 3.4.2(b) of the Moelis Holdings Agreement, in addition to whether or not it elects to purchase its pro rata portion of such Additional Units, whether or not it shall exercise its right of first refusal to purchase all (but not less than all) of the Additional Units that other Partners do not purchase pursuant to their right of first refusal under Section 3.4.2 of the Moelis Holdings Agreement.   (d) The right of first refusal granted hereunder may not be assigned or transferred, except that such right is assignable by SMBC to any of its respective Wholly-Owned Subsidiaries.   14





  12.3 Moelis General Partner's Consent to Certain Transfers.   (a) Prior to the IPO and during the term of the Strategic Alliance, Moelis General Partner shall not consent to a sale or transfer by a Partner of its Partnership Interests to an SMBC Competitor unless the Moelis General Partner caused the Partner proposing to sell or transfer its Partnership Interests to provide SMBC with a right to purchase, on the same terms and conditions, including price, all (but not less than all) of the Partnership Interests that such Partner proposes to sell or transfer to an SMBC Competitor.   (b) In the event a Partner proposes to undertake a sale or transfer of Partnership Interests to which the foregoing right applies, and Moelis General Partner must consent to the sale or transfer, Moelis General Partner shall require that Partner to give SMBC written notice of its intention to sell or transfer Partnership Interests to an SMBC Competitor describing the price and terms upon which such Partner proposes to sell or transfer its Partnership Interests. SMBC shall have ten (10) days from the date of delivery of any such notice to agree to purchase all, but not less than all, of such Partnership Interests, for the price and upon the terms specified in the notice, by delivering written notice to such Partner and Moelis Holdings.   (c) Following the expiration of such 10-day period, the Partner proposing to sell or transfer Partnership Interests shall have one hundred and eighty- (180-) days to sell or transfer, or enter into an agreement to sell or transfer the Partnership Interests with respect to which SMBC 's right under Section 12.3(a) was not exercised, at a price and upon terms no more favorable to the purchasers of such securities than specified in the Partner's notice. In the event the Partner has not sold or transferred the Partnership Interests, or entered into an agreement to sell or transfer the Partnership Interests, within such one hundred and eighty- (180-) day period, Moelis General Partner shall not consent to the Partner's selling or transferring its Partnership Interests to an SMBC Competitor thereafter without first requiring the Partner to comply again with this Section 12.3.   (d) The rights granted under this Section 12.3 may not be assigned or transferred, except that such right is assignable by SMBC to any of its respective Wholly-Owned Subsidiaries.   (e) Nothing in this Section 12.3 shall affect the power of Moelis General Partner to withhold consent to any transfer of Partnership Interests in its sole discretion to the extent authorized under Section 8.1 of the Moelis Holdings Agreement.   12.4 Certain Transfer Matters.   (a) During the term of the Strategic Alliance, if KM sells all or a portion of KM's Partnership Interests, the SMBC Unit-Holders may sell a pro rata portion of the SMBC Units without regard to any timing or transfer restrictions imposed by this Agreement or the Moelis Holdings Agreement, except that such sale or transfer may not be to a Moelis Competitor. In the event KM proposes to undertake a sale or   15





  transfer of KM's Partnership Interests to which the foregoing right applies, KM shall give written notice to SMBC and Moelis General Partner at least ten (10) days in advance of such sale or transfer, describing the percent of KM's Partnership Interest being sold or transferred. KM shall give written notice to SMBC and Moelis General Partner within five (5) days of any cancellation or postponement of such sale. When an SMBC Unit- Holder elects to sell or transfer the SMBC Units pursuant to its rights granted under this Section 12.4(a), the SMBC Unit-Holder shall provide Moelis General Partner with a notice stating its intent to sell or transfer the SMBC Units pursuant to this Section 12.4(a). Within ten (10) days of receiving such notice from an SMBC Unit-Holder, Moelis General Partner shall deliver to such SMBC Unit-Holder its consent for the proposed sale or transfer, unless the proposed sale or transfer is to a Moelis Competitor. For the avoidance of doubt, if the transaction is subject to (i) a Drag- Along Right or a Tag-Along Right, and such right was exercised, the SMBC Unit-Holders shall be deemed to have sold its pro rata portion of its Partnership Interests with respect to such transaction and shall not have any additional rights under this Section 12.4(a) or (ii) Section 13.2 of this Agreement, and an SMBC Unit-Holder exercised its right thereunder, such SMBC Unit-Holder shall be deemed to have sold its pro rata portion of its Partnership Interests with respect to such transaction and shall not have any additional rights under this Section 12.4(a). The above right shall be in addition to the Drag-Along Right and the Tag-Along Right with respect to transfers by Moelis General Partner set forth in Sections 8.4.1 and 8.4.2, respectively, of the Moelis Holdings Agreement.   (b) During the term of the Strategic Alliance, and after the first anniversary of Moelis Holdings' commencing a public registered share sale program for managing directors and other employees of Moelis Holdings or its affiliates, the SMBC Unit-Holders may sell or transfer Partnership Interests pursuant to such public registered share sale program for any given period in an amount equal to (i) the number of Partnership Interests that can be sold pursuant to the program in such period multiplied by (ii) a fraction whose numerator is the number of Partnership Interests the SMBC Unit-Holders have elected to sell in such program during such period and whose denominator is the total number of Partnership Interests the SMBC Unit-Holders have elected to sell plus the number of Partnership Interests all other persons have elected to sell in such program during such period (whether such Partnership Interests are held as outstanding common stock of a successor or parent company of Moelis Holdings or as interests in an affiliate of such public company) (for example, if 50 Partnership Interests can be sold during the period, the SMBC Unit-Holders has elected to sell 400 Partnership Interests and all persons other than the SMBC Unit-Holders have elected to sell 1,600 Partnership Interests, then the SMBC Unit-Holders may sell 10 Partnership Interests and the other persons may sell 40 Partnership Interests); provided, that, (1) the SMBC Unit-Holders shall be subject to the same conditions and terms as the other participants in the program; (2) such right under this Section 12.4(b) shall not apply to sales Moelis Holdings may permit certain of its managing directors and other employees to make under Rule 144 or otherwise; and (3) if both Section 12.4(a) and Section 12.4(b) apply to a sale or transfer of Partnership Interests, an SMBC Unit-Holder may sell the higher of the amount under Section 12.4(a) or Section 12.4(b). If such public registered share sale program as set forth in this Section 12.4(b) is established, Moelis Holding will provide the SMBC Unit-Holders with a monthly report which provides the number of Partnership Interests being   16

  sold in such share sale program during the relevant month and the outstanding number of Partnership Interests that are left in the public sale registered sale program as of the end of the relevant month.   (c) After the termination of the Strategic Alliance:   (i) prior to the IPO, Moelis General Partner shall not unreasonably withhold its consent to an SMBC Unit-Holder's transferring all or a portion of the SMBC Units to any other person who is not a Moelis Competitor; and   (ii) following the IPO, the SMBC Unit-Holders may freely transfer the SMBC Units, subject to applicable securities laws.   (d) Following the third anniversary of the Closing, whether or not during the term of the Strategic Alliance, the SMBC Unit- Holders may sell up to 9,231 SMBC Units (i) prior to the IPO, with the consent of Moelis General Partner (which consent may not be unreasonably withheld), provided such sale is not to a Moelis Competitor, or (ii) following the IPO, without restriction, subject only to applicable securities laws.   (e) During the term of the Strategic Alliance and prior to the IPO, Moelis Holdings shall notify SMBC in advance of publicly announcing the sale or issuance of any interests in Moelis Holdings (other than Management Units) to a Strategic Investor, provided, that Moelis Holdings shall notify SMBC in advance only to the extent and in such manner as it is permissible under any confidentiality agreement entered into in connection with such sale or issuance.   12.5 Amendments to the Moelis Holdings Agreement. Without the prior written consent of SMBC (which consent shall not be unreasonably withheld, delayed or conditioned), Moelis General Partner shall not enter into any side letter or agreement (other than the Vesting Agreement of any Management Partner) with any Limited Partner in respect of the issuance or holding of any class or type of interests in the Partnership that (i) modifies the limited liability of the SMBC Unit-Holders, (ii) materially and adversely affects in a disproportionate manner the interest of the SMBC Unit-Holders in Net Income, Net Loss or Available Assets, (iii) increases the Capital Contributions required to be made by the SMBC Unit-Holders, (iv) modifies the SMBC Unit-Holders' Drag-Along Rights or Tag-Along Rights under the Moelis Holdings Agreement, or (v) materially and adversely affects in a disproportionate manner the interest of the SMBC Unit-Holders in the distributions, regardless of whether such side letter or agreement is entered into by such Limited Partner in its capacity as such, and regardless of whether SMBC is entitled to participate or does participate in such issuance of or otherwise holds any such interests; provided, however, the foregoing consent of SMBC shall not be required if the side letter or agreement affects Management Units in a substantially similar manner.   17





  12.6 Percentage Interest Limit. Notwithstanding anything to the contrary in this Agreement or the Moelis Holdings Agreement, none of SMBC, Moelis Holdings or any of their controlled affiliates shall take any action, including with respect to the acquisition of any Partnership Interests pursuant to the exercise of any right under this Agreement or the Moelis Holdings Agreement, that would reasonably be expected to (i) cause SMBC, or any of its affiliates, to require approval of the Board of Governors of the Federal Reserve System under Section 4 of the U.S. Bank Holding Company Act of 1956, as amended (including Regulation Y promulgated thereunder), or otherwise, to acquire or retain any interest in Moelis Holdings or (ii) cause Moelis Holdings to be deemed to be or presumed to be controlled by SMBC, or any of its affiliates, for purposes of the U.S. Bank Holding Company Act of 1956, as amended (including Regulation Y promulgated thereunder). SMBC and Moelis Holdings shall cooperate with each other and use their reasonable best efforts to avoid any of the events in the preceding sentence by taking any and all actions necessary, including, without limitation, in connection with any restructuring to facilitate the IPO, which shall include, among other things, issuing a new class or series of Partnership Interests or alternative economic interests to SMBC, or its affiliates, as applicable. Notwithstanding anything to the contrary in this Section 12.6, nothing shall prevent SMBC, or its affiliates, from seeking a noncontrol determination from the staff of the Board of Governors of the Federal Reserve System with respect to any action that would otherwise be prohibited by this Section 12.6, and, after receiving a noncontrol determination, taking such action, including acquiring additional Partnership Interests.   ARTICLE XIII.   REGISTRATION RIGHTS.   13.1 Registration.   (a)   (i) Following the IPO and the termination of the Strategic Alliance, SMBC shall have the right to demand that Moelis Holdings register the sale of all, but not less than all, of the Registrable Securities held by SMBC and its affiliates (together the SMBC Unit-Holders) under the Securities Act (the Demand Notice), provided, however, SMBC shall not be permitted to deliver the Demand Notice within (i) 180 days of the IPO or (ii) 60 days of any public offering and sale of Partnership Interests (and/or any securities of Moelis Holdings or any successor entity into which Partnership Interests are converted, exchanged or redesignated) for cash pursuant to an effective registration statement (other than on Form S-4 or S-8 or a comparable form), and subject to the terms of any agreement entered into by Moelis Holdings, SMBC or Nikko pursuant to Section 13.7. Within 60 days after Moelis Holdings receives a written notice to register the Registrable Securities, Moelis Holdings will   18





  file a Registration Statement, on an appropriate form, to register the sale of the Registrable Securities, which Registration Statement will (if specified in the SMBC Unit-Holders' notice) contemplate the ability of the SMBC Unit-Holders to effect an Underwritten Offering (the Demand Registration). The Demand Notice shall specify the intended method of distribution of the Registrable Securities. Subject to Section 13.2, Moelis Holdings may include in any registration effected pursuant to this Section 13.1 any securities for its own account or for the account of holders (other than the SMBC Unit-Holders) of Partnership Interests; provided, that, Moelis Holdings shall pay a portion of all expenses of Moelis Holdings (including those set forth in Section 13.8) in connection with any such registration, in proportion to the aggregate selling price of all securities so included in any such registration.   (ii) Moelis Holdings will use its commercially reasonable efforts (i) to cause any Registration Statement to be declared effective (unless it becomes effective automatically upon filing) as promptly as practicable after the filing thereof with the SEC and (ii) to keep such Registration Statement current and effective for a period of 90 days, or such shorter time necessary for the completion of the sale of Registrable Securities registered thereon. Moelis Holdings further agrees to use its commercially reasonable efforts to supplement or make amendments to such Registration Statement as may be necessary to keep such Registration Statement effective for the period referred to in clause (ii) above, including (A) to respond to the comments of the SEC, if any, (B) as may be required by the registration form utilized by Moelis Holdings for such Registration Statement or by the instructions to such registration form, (C) as may be required by the Securities Act, or (D) as may reasonably be requested in writing by the SMBC Unit-Holders or any underwriter and acceptable to Moelis Holdings. Moelis Holdings agrees to furnish to the SMBC Unit-Holders copies of any such supplement or amendment no later than the time it is first used or filed with the SEC.   (b) If the Demand Notice specifies that the Registrable Securities will be sold in an Underwritten Offering, the parties shall mutually agree on the lead underwriter and any additional underwriters.   (c) Any registration initiated pursuant to Section 13.1(a) shall not count as a Demand Registration (i) unless and until the Registration Statement with respect to the Registrable Securities has become effective and remained effective for a period of 90 days or, if a shorter time, until all of the Registrable Securities have been sold, or (ii) if the conditions to closing specified in the underwriting agreement, if any, entered into in connection with such registration are not satisfied or waived, other than by reason of a failure on the part of the SMBC Unit-Holders.   13.2 Piggyback Registration. If Moelis Holdings proposes to file a registration statement under the Securities Act (other than non- participating, non-convertible debt or   19





  equity securities or securities to be issued pursuant to a registration statement on Form S-4 or S-8 or any comparable form) for its own account or for the account of a holder (other than the SMBC Unit-Holders) of Partnership Interests, including in connection with the IPO and where SMB C/Nikko (including an SMBC Unit-Holder) has the right to sell any or all SMBC Units under this Agreement, then Moelis Holdings shall give written notice of such proposed filing to the SMBC Unit-Holders as soon as commercially practicable but in no event less than (i) 20 days before the anticipated filing date or (ii) if Moelis Holdings determines to conduct a registration less than 20 days before the anticipated filing date, then on the date Moelis Holdings determines to proceed with such registration (a Piggyback Registration). If Moelis Holdings proposes to file the registration statement before the termination of the Strategic Alliance, the written notice to the SMBC Unit-Holders shall include the number of Partnership Interests to be sold by KM and the percentage of the total Partnership Interests held by KM represented by that number. Within 10 days after delivery of any such notice by Moelis Holdings, or such shorter period as Moelis Holdings specifies in such notice if Moelis Holdings determines to conduct a registration less than 10 days before the anticipated filing date, the SMBC Unit-Holders may request in writing that Moelis Holdings include any Registrable Securities held by the SMBC Unit-Holders in the proposed registration. The request by the SMBC Unit-Holders shall specify the number of Registrable Securities proposed to be included in the registration. Moelis Holdings will then, subject to Section 13.3, include such requested Registrable Securities in the proposed registration; provided, however, that if Moelis Holdings proposes to file the registration statement before the termination of the Strategic Alliance, the percentage of all Registrable Securities that may be included in the proposed registration may not exceed the percentage of KM's total Partnership Interests to be sold in the proposed registration, as stated in the notice by Moelis Holdings. The SMBC Unit-Holders may not withdraw any request for a Piggyback Registration involving an Underwritten Offering after the preliminary prospectuses for the proposed offering have been printed, or any road show has begun, or Moelis Holdings has made any public announcement with the consent of the SMBC Unit-Holders that assumes the participation of the SMBC Unit-Holders in the proposed offering, or in any event less than 24 hours before the pricing of such offering. The SMBC Unit-Holders shall have no right to select the underwriters in an Underwritten Offering in connection with a Piggyback Registration. Notwithstanding anything to the contrary in this Section 13.2, Moelis Holdings may, at any time at its sole option, choose not to proceed with the proposed registration that gives rise to the Piggyback Registration.   13.3 Reduction of Size of Underwritten Offering. Notwithstanding anything to the contrary contained herein, if the lead underwriter or underwriters in an Underwritten Offering pursuant to Section 13.1 or Section 13.2 advise Moelis Holdings that, in their good faith judgment, the number of Partnership Interests (including any Registrable Securities) that Moelis Holdings, the SMBC Unit-Holders and any other persons intend to include in any Registration Statement exceeds the number that can be sold in the offering in light of marketing factors or because the sale of a greater number would adversely affect the price of the Partnership Interests to be sold, then the number of Partnership Interests to be included in the Registration Statement for the account of Moelis Holdings, the SMBC Unit-Holders and any other persons will be reduced to the   20





  extent necessary to reduce the total number of securities to be included in any such Registration Statement to the number recommended by the lead underwriter or underwriters, in accordance with the following priorities:   (a) in the case of a Demand Registration pursuant to Section 13.1, priority will be (i) first, all Registrable Securities included in the Registration Statement, (ii) second, any Partnership Interests proposed to be offered by Moelis Holdings for its own account (iii) third, pro rata among any other holders of Partnership Interests requested to be registered pursuant to a contractual right, and (iv) fourth, pro rata among any other holders of Partnership Interests requested to be registered;   (b) in the case of a registration statement initiated by Moelis Holdings for its own account that gives rise to a Piggyback Registration pursuant to Section 13.2, priority will be (i) first, Partnership Interests proposed to be offered by Moelis Holdings for its own account, (ii) second, pro rata among all holders of Partnership Interests requested to be registered pursuant to a contractual right and (iii) third, pro rata among any other holders of Partnership Interests requested to be registered; and   (c) in the case of a registration statement initiated by Moelis Holdings for the account of holders (other than the SMBC Unit- Holders) of Partnership Interests, pursuant to registration rights afforded to such holders by contract, that gives rise to a Piggyback Registration pursuant to Section 13.2, priority will be (i) first, pro rata among the holders of Partnership Interests for whose account the registration statement was initiated, (ii) second, Partnership Interests offered by Moelis Holdings for its own account, (iii) third, pro rata among any other holders of Partnership Interests requested to be registered pursuant to a contractual right and (iv) fourth, pro rata among any other holders of Partnership Interests requested to be registered.   13.4 Registration Procedures. Subject to the provisions of Section 13.1 or Section 13.2, in connection with the registration of the sale of Registrable Securities pursuant to the Demand Registration or a Piggyback Registration hereunder, Moelis Holdings will:   (a) furnish to the SMBC Unit-Holders without charge, no later than the time of filing of a Registration Statement, copies of such Registration Statement, and thereafter such number of copies of such Registration Statement, each amendment and supplement thereto (in each case including all exhibits thereto, including each preliminary prospectus), copies of any and all transmittal letters or other correspondence with the SEC relating to such Registration Statement and such other documents in such quantities as the SMBC Unit-Holders may reasonably request from time to time, for as long as Moelis Holdings is required to cause the Registration Statement to remain current, in order to facilitate the disposition of the Registrable Securities;   (b) provide the SMBC Unit-Holders and their Representatives with the opportunity to participate in the preparation of the Registration Statement and the related Prospectus;   21





  (c) use its commercially reasonable efforts to register or qualify the Partnership Interests being sold under such other securities or blue sky laws of such jurisdictions as the SMBC Unit-Holders reasonably request and do any and all other acts and things as may be reasonably necessary or advisable to enable the SMBC Unit-Holders to consummate the disposition of the Registrable Securities in such jurisdictions; provided, however, that Moelis Holdings shall in no event be required to (w) qualify generally to do business in any jurisdiction where it is not then so qualified, (x) subject itself to taxation in any jurisdiction where it is not otherwise then so subject, (y) take any action that would subject it to service of process in suits other than those arising out of the offer and sale of the securities covered by the Registration Statement or (z) consent to general service of process in any jurisdiction where it is not then so subject;   (d) notify the SMBC Unit-Holders and the lead underwriter or underwriters, if any, at any time when a Prospectus relating to Registrable Securities is required to be delivered under the Securities Act, of the occurrence of any event as a result of which the Registration Statement, the Prospectus included in a Registration Statement or any amendment or supplement thereto relating to Registrable Securities contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and Moelis Holdings will use its commercially reasonable efforts to prepare and file with the SEC a supplement or amendment to such Prospectus and Registration Statement (and comply fully with the applicable provisions of Rules 424, 430A and 430B under the Securities Act in a timely manner) so that, as thereafter delivered to the purchasers of the Registrable Securities, such Prospectus and Registration Statement will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;   (e) advise the lead underwriter or underwriters, if any, and the SMBC Unit-Holders promptly and, if requested by such persons, confirm such advice in writing, of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement under the Securities Act or of the suspension by any state securities commission of the qualification of the Registrable Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes. If at any time the SEC issues any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority issues an order suspending the qualification or exemption from qualification of the Registrable Securities under state securities or blue sky laws, Moelis Holdings shall use its commercially reasonable efforts to obtain the withdrawal or lifting of such order as promptly as practicable;   (f) use its commercially reasonable efforts to cause the Registrable Securities to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of Moelis Holdings to enable the SMBC Unit-Holders to consummate the disposition of the Registrable Securities; provided, however, that Moelis Holdings shall in no event be required to (w) qualify   22





  generally to do business in any jurisdiction where it is not then so qualified, (x) subject itself to taxation in any jurisdiction where it is not otherwise then so subject, (y) take any action that would subject it to service of process in suits other than those arising out of the offer and sale of the securities covered by the Registration Statement or (z) consent to general service of process in any jurisdiction where it is not then so subject;   (g) if requested by the SMBC Unit-Holders or the underwriter or underwriters, if any, promptly include in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as the SMBC Unit-Holders and the underwriter or underwriters, if any, may reasonably request to have included therein, including information relating to the Plan of Distribution of the Registrable Securities, information about the number of Registrable Securities being sold to the underwriter or underwriters, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering, and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after Moelis Holdings is notified of the matters to be included in such Prospectus supplement or post-effective amendment;   (h) for the period beginning a reasonable time before the filing of the Registration Statement and for as long as Moelis Holdings is required to cause the Registration Statement to remain current under Section 13.1(a)(ii), and except to the extent prohibited by applicable law and subject to entering into customary confidentiality agreements, after reasonable advance notice, make available for inspection by the SMBC Unit- Holders, any underwriter participating in any disposition of the Registrable Securities, and any Representative for the SMBC Unit-Holders or such underwriter, during business hours and at the location designated by Moelis Holdings, any financial and other records and corporate documents of Moelis Holdings as will be reasonably necessary to enable them to conduct reasonable and customary due diligence with respect to Moelis Holdings and the related Registration Statement and Prospectus, provided, however, that records, documents and information obtained hereunder will be used by such inspecting person only to conduct such due diligence; and   (i) together with any other holder of Partnership Interests proposing to include securities in any Underwritten Offering, enter into a reasonable and customary written agreement with the underwriter or underwriters, if any, in such form and containing such provisions as are reasonable and customary in the securities business for such an arrangement between underwriters and companies of Moelis Holding's size and investment stature.   13.5 Conditions to Offerings. The obligations of Moelis Holdings to take the actions contemplated by Sections 13.1, 13.2 and 13.4 with respect to an offering of Registrable Securities will be subject to the following conditions:   (a) Moelis Holdings may require each SMBC Unit-Holder to furnish to Moelis Holdings such information regarding such SMBC Unit-Holder, the Registrable Securities or the distribution of such Registrable Securities as Moelis Holdings may from time to time request, in each case to the extent reasonably required by the Securities Act   23





  and the rules and regulations promulgated thereunder, or under state securities or blue sky laws; and   (b) If an offering of Registrable Securities is an Underwritten Offering, each SMBC Unit-Holder must: (A) agree to sell its Registrable Securities on the basis provided in any underwriting agreement approved by Moelis Holdings in accordance with Section 13.4(i), (B) complete and execute, as applicable, all customary questionnaires, powers of attorney, underwriting agreements, lock-up agreements consistent with Section 13.7 and other documents customarily required under the terms of such underwriting agreement and (iii) agree to make customary representations and warranties (including as to due organization and good standing, corporate power and authority, due approval, no conflicts and ownership and transfer of Registrable Securities, and as to accuracy and completeness of those statements made in the applicable Registration Statement, Prospectus or other document in reliance upon and in conformity with written information furnished to Moelis Holdings or the underwriter or underwriters by such SMBC Unit-Holder) and covenants in such underwriting agreement.   13.6 Suspension Period.   (a) Notwithstanding anything to the contrary contained in this Agreement, Moelis Holdings shall be entitled, by providing prior written notice to the SMBC Unit-Holders, to postpone the filing or effectiveness or suspend the use of any Registration Statement pursuant to Section 13.1 for a reasonable period of time not to exceed 60 days in succession or 120 days in any 365-day period (or a longer period of time with the prior written consent of SMBC, which consent shall not be unreasonably withheld) (a Suspension Period) if (A) Moelis Holdings determines in good faith that effecting the registration (or permitting sales under an effective registration) would reasonably be expected to adversely affect an offering of securities of Moelis Holdings, (B) Moelis Holdings is in possession of material non-public information and deems it advisable not to disclose such information in a Registration Statement, or (C) due to a pending or contemplated financing, acquisition, disposition, corporate reorganization, merger, public offering of securities or other similar transaction or other material event or circumstance involving Moelis Holdings or its securities. Moelis Holdings will notify the SMBC Unit-Holders promptly upon the termination of the Suspension Period. Upon notice by Moelis Holdings to the SMBC Unit-Holders of any determination to commence a Suspension Period, the SMBC Unit-Holders shall, except as required by applicable law, including any disclosure obligations under Section 13 of the Exchange Act, keep the fact of any such Suspension Period strictly confidential, and during any Suspension Period, promptly halt any offer, sale (including sales pursuant to Rule 144), trading or transfer of any Partnership Interests for the duration of the Suspension Period until Moelis Holdings has provided notice that the Suspension Period has been terminated.   (b) If Moelis Holdings suspends the use of a Registration Statement pursuant to Section 13.6(a), the holders of Registrable Securities shall receive an extension of the registration period under Section 13.1(a)(ii) and 13.1(c) equal to the number of days of the suspension.   24





  (c) The SMBC Unit-Holders agrees that, upon receipt of any notice from Moelis Holdings of the occurrence of any event of the kind described in Section 13.4(d) or Section 13.4(e) or a condition described in Section 13.6(a), each SMBC Unit-Holder will forthwith discontinue disposition of Registrable Securities pursuant to the Registration Statement covering the sale of Registrable Securities until the SMBC Unit-Holders receive copies of the supplemented or amended Prospectus contemplated by Section 13.4(d) or Section 13.6(d) or notice from Moelis Holdings of the termination of the stop order or Suspension Period.   (d) After the expiration of any Suspension Period and without any further request from a holder of Partnership Interests, Moelis Holdings shall use its commercially reasonably efforts to prepare a Registration Statement, or post-effective amendment or supplement to the Registration Statement or Prospectus or any document incorporated therein by reference, or file any other required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the Prospectus will not include a material misstatement or omission or be not effective and useable for the sale of Registrable Securities.   13.7 Market Stand-Off Agreement.   (a) In connection with any Underwritten Offering that is the IPO, or any Underwritten Offering in which the SMBC Unit-Holders are selling Registrable Securities pursuant to Sections 13.1 or 13.2, each SMBC Unit-Holder agrees that, during the period of duration (up to 180 days, subject to customary extensions as may be required by the underwriter or underwriters up to a maximum of 214 days) specified by Moelis Holdings and the underwriter or underwriters of Registrable Securities, following the date of the final prospectus or other offering document distributed in connection with the Underwritten Offering, it shall not, to the extent requested by Moelis Holdings and such underwriter or underwriters, directly or indirectly, sell, offer to sell, contract to sell (including any short sale or other hedging transaction), grant any option to purchase or otherwise transfer any Registrable Securities held by it at any time during such period except for such Registrable Securities as shall be included in such registration. Notwithstanding the foregoing, the obligations described in this Section 13.7(a) shall not apply (i) to a registration relating solely to employee benefit plans on Form S-1 or Form S-8, (ii) to a registration relating solely to an acquisition or similar transaction on Form S-4 or (iii) unless all holders then holding more than 3% of the issued and outstanding Partnership Interests (and/or any securities of Moelis Holdings or any successor entity into which the Partnership Interests are converted, exchanged or redesignated) with a contractual obligation enforceable by Moelis Holdings or its affiliates to do so and all of the then-current executive officers and directors (if applicable) of Moelis Holdings enter into similar agreements.   (b) In order to enforce the foregoing covenant, Moelis Holdings may impose stop-transfer instructions with respect to the Registrable Securities of each SMBC Unit-Holder until the end of such period.   25





  13.8 Registration Expenses. All fees and expenses incident to Moelis Holding's performance of or compliance with the obligations of this ARTICLE XIII, including all fees and expenses incurred in complying with securities or blue sky laws, printing expenses, messenger and delivery expenses of Moelis Holdings, any registration or filing fees payable under any federal or state securities or blue sky laws, the fees and expenses incurred in connection with any listing or quoting of the securities to be registered on any national securities exchange or automated quotation system, fees of the Financial Industry Regulatory Authority, fees and disbursements of counsel for Moelis Holdings, its independent registered certified public accounting firm and any other public accountants who are required to deliver comfort letters (including the expenses required by or incident to such performance), fees of transfer agents and registrars, costs of insurance, and the fees and expenses of other persons retained by Moelis Holdings, will be borne by Moelis Holdings; provided, however; that the SMBC Unit-Holders shall pay all reasonable out-of-pocket expenses of Moelis Holdings (including, for the avoidance of doubt, all the fees set forth above in this section) in connection with the Demand Registration subject to Moelis Holdings' obligations set forth in Section 13.1(a)(i). The SMBC Unit-Holders will bear and pay any fees and expenses of SMBC or its affiliates or their Representatives, including their counsel, and any underwriting discounts, fees and commissions and any transfer taxes applicable to Registrable Securities offered for its account pursuant to any Registration Statement.   13.9 Indemnification; Contribution.   (a) In connection with any registration of Registrable Securities, Moelis Holdings will indemnify, defend and hold harmless each SMBC Unit-Holder, its affiliates, directors, officers and SMBC Unit-Holders and each person who controls SMBC Unit-Holder within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the Indemnified Persons) from and against any and all direct losses, claims, damages, liabilities, obligations, costs and expenses (including, without limitation, as a result of any notices, actions, suits, proceedings, claims, demands, assessments, judgments, awards, costs, penalties, taxes and reasonable expenses, including reasonable attorneys' and other professionals' fees and disbursements, but excluding any consequential damages) (collectively Losses) caused by (i) any untrue or alleged untrue statement of material fact contained in any part of any Registration Statement or any Prospectus, including any amendment or supplement thereto, used in connection with the Registrable Securities or any Issuer FWP or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, in the light of the circumstances under which they were made) not misleading; provided, however, that Moelis Holdings will not be required to indemnify any Indemnified Person for any Losses resulting from any such untrue statement or omission if such untrue statement or omission was made in reliance on and in conformity with information with respect to any Indemnified Person furnished to Moelis Holdings in writing by, or on behalf of, any of the SMBC Unit-Holders expressly for use therein.   (b) In connection with any Registration Statement, Prospectus or Issuer FWP, each SMBC Unit-Holder, jointly and severally, will indemnify, defend and   26

  hold harmless Moelis Holdings, its directors, its officers and each person, if any, who controls Moelis Holdings (within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act) to the same extent as the foregoing indemnity from Moelis Holdings to each SMBC Unit-Holder, but only with respect to information furnished to Moelis Holdings in writing by, or on behalf of, any SMBC Unit-Holder or any Indemnified Persons expressly for use in such Registration Statement, Prospectus or Issuer FWP; and provided, further, however, that in no event shall the liability for indemnity of any SMBC Unit-Holder under this Section 13.9(b) exceed the dollar amount of the proceeds (net of any underwriting discount or commission or other selling expenses) received by such SMBC Unit-Holder from the sale of the Registrable Securities giving rise to such indemnification.   (c) In case any claim, action or proceeding (including any governmental investigation) is instituted involving any person in respect of which indemnity may be sought pursuant to Section 13.9(a) or 13.9(b), such person (the Indemnified Party) will promptly, but in any event within 10 Business Days, notify the person against whom such indemnity may be sought (the Indemnifying Party) in writing, and the Indemnifying Party shall have the right to participate in, and to the extent the Indemnifying Party so desires, to assume the defense thereof with counsel reasonably satisfactory to the Indemnified Party; provided, that the failure of any Indemnified Party to give notice within the time limit provided herein shall not relieve the Indemnifying Party of its obligations under Section 13.9(a) or 13.9(b), except to the extent that the Indemnifying Party is actually and materially prejudiced by such failure to give notice. In any such claim, action or proceeding where the Indemnifying Party has assumed the defense thereof, the Indemnified Party shall have the right, but not the obligation, to participate in any such defense and to retain its own counsel, but the fees and expenses of such counsel will be at the expense of such Indemnified Party unless the Indemnified Party and the Indemnified Party have been advised by counsel that representation of both parties by the same counsel would be inappropriate due to actual or potential conflicting interests between them. It is understood that the Indemnifying Party will not, in connection with any claim, action or proceeding or related claims, actions or proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) at any time for all such Indemnified Parties and that all such reasonable fees and expenses will be reimbursed as they are incurred. In the case of the retention of any such separate firm for the Indemnified Parties, such firm will be designated in writing by the Indemnified Parties. No Indemnified Party will, without the prior written consent of the Indemnifying Party, settle, compromise or offer to settle or compromise any pending or threatened proceeding in respect of which any Indemnified Party is seeking indemnity hereunder. The Indemnifying Party will not be liable for any settlement of any claim, action or proceeding effected without its written consent, but if such claim, action or proceeding is settled with such consent or if there has been a final judgment for the plaintiff, the Indemnifying Party agrees to indemnify the Indemnified Party from and against any Loss by reason of such settlement or judgment. No Indemnifying Party will, without the prior written consent of the Indemnified Party, settle, compromise or offer to settle or compromise any pending or threatened proceeding in respect of which any Indemnified Party is seeking indemnity hereunder, unless such settlement includes (i) an   27





  unconditional release of such Indemnified Party from all liability in connection with such proceeding, (ii) no finding or admission of any violation of law or any violation of the rights of any person by the Indemnified Party or any of its Affiliates can be made as the result of such action, and (iii) the sole relief (if any) provided is monetary damages that are reimbursed in full by the Indemnifying Party.   (d) If the indemnification provided for in this Section 13.9 from the Indemnifying Party is unavailable to an Indemnified Party hereunder or is insufficient in respect of any Losses referred to in this Section 13.9, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party, will contribute to the amount paid or payable by such Indemnified Party as a result of such Losses (i) in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions that resulted in such Losses, as well as any other relevant equitable considerations, or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative fault referred to in clause (i) but also the relative benefit of Moelis Holdings, on the one hand, and each SMBC Unit-Holder, on the other, in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations; provided, however, that in no event shall a SMBC Unit-Holder be required by this Section 13.9(d) to contribute an aggregate amount in excess of the dollar amount of proceeds (net of underwriting discounts and commissions and other selling expenses) received by such SMBC Unit-Holder from the sale of Registrable Securities giving rise to such contribution. The relative fault of such Indemnifying Party and Indemnified Party will be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been taken by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the Losses referred to above will be deemed to include, subject to the limitations set forth in Section 13.9(c), any reasonable out of pocket legal or other out of pocket fees or expenses reasonably incurred by such party in connection with any investigation or proceeding.   (e) The parties agree that it would not be just and equitable if contribution pursuant to Section 13.9(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in Section 13.9(d). No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Notwithstanding the provisions of this Section 13.9(e), a SMBC Unit-Holder shall not be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds received by such SMBC Unit-Holder from the sale of the Registrable Securities exceeds the amount of any damages which such SMBC Unit-Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.   28





  (f) If indemnification is available under this Section 13.9, the Indemnifying Party will indemnify each Indemnified Party to the fullest extent permissible under applicable law provided in Sections 13.9(a) and 13.9(b) without regard to the relative fault of said Indemnifying Party or Indemnified Party or any other equitable consideration provided for in Section 13.9(d) or 13.9(e). The obligations of Moelis Holdings under this Section 13.9 shall be in addition to any liability that Moelis Holdings may otherwise have to any Indemnified Person.   (g) Notwithstanding anything to the contrary in this Agreement, each of the Indemnified Parties has relied on this Section 13.9, is an express third party beneficiary of this Section 13.9 and is entitled to enforce the obligations of the applicable Indemnified Parties under this Section 13.9 directly against such Indemnified Parties to the full extent thereof.   13.10 Rule 144. For so long as Moelis Holdings is subject to the requirements of Section 13, 14 or 15(d) of the Securities Act, Moelis Holdings agrees that it will use its reasonable best efforts to (i) make and keep public information available, as those terms are understood and defined in Rule 144 and (ii) file the reports required to be filed by it under the Securities Act and the Exchange Act.   13.11 Transfer of Registration Rights. The rights to cause Moelis Holdings to register securities granted to the SMBC Unit-Holders under this ARTICLE XIII may be assigned by the SMBC Unit-Holders with the consent of Moelis Holdings, except that the SMBC Unit-Holders may assign such rights to their Wholly-Owned Subsidiaries without the consent of Moelis Holdings.   13.12 Termination of Registration Rights. The registration rights contained in Section 13.1 shall automatically terminate when the SMBC Unit-Holders collectively hold Registrable Securities in an amount less than (i) 1% of the issued and outstanding Partnership Interests (and/or any securities of Moelis Holdings or any successor entity into which the Partnership Interests are converted, exchanged or redesignated) and (ii) the average weekly reported volume of trading in Partnership Interests (and/or any securities of Moelis Holdings or any successor entity into which the SMBC Units are converted, exchanged or redesignated) on all national securities exchanges and/or reported through the automated quotation system of a registered securities association for the four calendar weeks preceding the date on which such determination is made.   ARTICLE XIV.

REPRESENTATIONS AND WARRANTIES; CONDUCT OF BUSINESS   14.1 Representations and Warranties of Moelis. Moelis Holdings and Moelis General Partner each represent and warrant to SMBC/Nikko that:   (a) Organization. Moelis General Partner has been duly formed and is validly existing as a limited liability company under the Delaware Limited Liability   29





  Company Act. Moelis Holdings has been duly formed and is validly existing as a limited partnership under the Delaware Revised Uniform Limited Partnership Act.   (b) Power, Authority, Etc. Each of Moelis Holdings and Moelis General Partner has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated herein. The execution, delivery and performance of this Agreement do not require any further consent of any third party or governmental authority. This Agreement has been duly authorized, executed and delivered by Moelis Holdings and Moelis General Partner and, when duly executed and delivered by the other parties hereto, will be the valid and binding obligation of Moelis Holdings and Moelis General Partner, enforceable in accordance with its terms, except (a) as may be limited by or subject to any bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally and (b) that the remedies of specific performance, injunction and other forms of equitable relief may not be available because they are subject to certain tests of equity jurisdiction, equitable defenses and the discretion of the court before which any proceeding therefor may be brought.   (c) Other. Each of the representations and warranties set out in Exhibit A of this Agreement are true and correct on the date hereof.   14.2 Representations and Warranties of SMBC/Nikko. SMBC and Nikko each represent and warrant to Moelis Holdings and Moelis General Partner that:   (a) Organization. SMBC and Nikko have been duly formed and are validly existing as corporations under the laws of Japan.   (b) Power, Authority, Etc. SMBC and Nikko have all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated herein. The execution, delivery and performance of this Agreement by SMBC and Nikko does not require any further consent of any third party or governmental authority. This Agreement has been duly authorized, executed and delivered by each of SMBC and Nikko and, when duly executed and delivered by the other parties hereto, will be the valid and binding obligation of SMBC and Nikko, enforceable in accordance with its terms, except (a) as may be limited by or subject to any bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally and (b) that the remedies of specific performance, injunction and other forms of equitable relief may not be available because they are subject to certain tests of equity jurisdiction, equitable defenses and the discretion of the court before which any proceeding therefor may be brought.   14.3 Survival of Covenants, Representations and Warranties. Each of the covenants, representations and warranties of the parties in this Agreement and the Subscription Agreement shall survive the Closing through and including the date thirty (30) days following the receipt by SMBC/Nikko of the audited financial statements of Moelis Holdings as of and for the year ended December 31, 2012.   30





  ARTICLE XV.   MISCELLANEOUS   15.1 Expenses; No Partnership or Joint Venture. Each party will bear its own legal, marketing, travel and other expenses in connection with the Strategic Alliance. No party is the partner, joint venture partner or agent of any other party with power to bind any other party contractually. This Agreement and the Strategic Alliance represent an agreement to cooperate and not a partnership or joint venture agreement. No party owes any other party a fiduciary duty by virtue of this Agreement or the operation of the Strategic Alliance.   15.2 Notice. Notice under this Agreement must be in writing and may be delivered by mail, overnight delivery service or email as follows:   If to SMBC:   2-3, Otemachi 1-chome Chiyoda-ku, Tokyo 100-0004 Attention: Toshihiro Horiuchi, Senior Vice President, Securities Business Planning Dept., Planning Dept., Investment Banking Unit. Email address: horiuchi_toshihiro@ck.smbc.co.jp   If to Nikko:   Shin-Marunouchi Building 18F, 5-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-6518 Attention: Masami Hagiwara, Head of Mergers & Acquisitions Administration Email address: hagiwara_masami@smbcnikko.co.jp   If to Moelis Holdings:   Moelis & Company Holdings LP 399 Park Avenue, 5th Floor New York, NY 10022 Attention: Kate Pilcher Ciafone, Senior Vice President Email address: kate.ciafone@moelis.com, with a copy to: Attention: Osamu Watanabe, General Counsel Email address: osamu.watanabe@moelis.com   15.3 Entire Agreement; Amendment; Waivers; Counterparts. This Agreement and the Subscription Agreement (as modified by any letter agreement between the parties entered into on the date hereof), incorporates the entire understanding of the parties and supersedes all previous agreements with respect to the subject matter hereof. No   31





  amendment or modification of this Agreement shall be effective unless it is made in writing and signed by each of the parties. No waiver, expressed or implied, by any party of a breach by another party of this Agreement, or of any terms and provisions of this Agreement, shall constitute a waiver of any subsequent such breaches or of future enforcement of any such terms or provisions. This Agreement may be executed in three or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same agreement.   15.4 No Assignment. This Agreement may not be assigned by any party without the written consent of the other parties, except to a subsidiary or controlled affiliate of such party which succeeds such party's conduct of Covered Businesses.   15.5 Obligation and Responsibilities of SMBC/Nikko. SMBC and Nikko shall be severally and not jointly responsible for any obligation or responsibilities incurred or assumed by SMB C/Nikko hereunder.   15.6 Separability. In case one or more of the provisions contained in this Agreement are for any reason held to be invalid, illegal or unenforceable in any respect under any such law or regulation, the invalidity, illegality, or unenforceability will not affect any other provisions of this Agreement, which will be construed as if contained in this Agreement, and each illegal, invalid or unenforceable provision will be construed as broadly as may be possible so that the original intent of the parties is given effect to the greatest extent possible.   15.7 Compliance with Laws. Each of the parties shall execute and perform this Agreement in compliance with all applicable laws or regulations. Notwithstanding the foregoing, a party shall not be obligated to take any action that violates, infringes or conflicts with or prohibited from taking any action required to be in compliance with any applicable laws or regulations.   15.8 Governing Laws; Jurisdiction. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without regard to principles of conflict of laws. The parties irrevocably and unconditionally submit to the exclusive jurisdiction of any state or Federal court sitting in Manhattan, New York over any suit, action or proceeding arising out of or relating to this Agreement. The parties hereby agree that service of any process, summons, notice or document by U.S. registered mail addressed to such party at the address above shall be effective service of process for any action, suit or proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum. Each party waives any right to trial by jury with respect to any proceeding arising out of this Agreement. Notwithstanding the foregoing, any matter relating to the SMBC Unit-Holders' rights or obligations as Limited Partners of Moelis Holdings shall be subject to Sections 10.4 and 10.10 of the Moelis Holdings Agreement and not to this Section 15.8.   32





  15.9 Effect on Prior Agreement. Commencing as of the Effective Date, the rights and obligations of the parties shall be determined pursuant to this Agreement and the Prior Agreement shall be of no further effect; provided, that, any fees and expenses due to a party outstanding thereunder shall be deemed to be outstanding under this Agreement.   15.10 Good Faith Discussion; Further Assurances. Should there be any dispute or disagreement with respect to any matters not set forth in this Agreement, the parties will discuss in good faith to resolve such dispute or disagreement. Each party shall use its reasonable efforts to cooperate with the other party if necessary for compliance with laws and regulations applicable to such other party in relation to the SMBC Unit- Holders' holding of SMBC Units or transactions or matters contemplated under the Subscription Agreement, the Side Letter, this Agreement and the Moelis Holdings Agreement.   [signature page follows]   33

  IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered on the date first written above.   SUMITOMO MITSUI BANKING CORPORATION

By:



  Name: Takeshi Kunibe







Title: President







       SMBC NIKKO SECURITIES INC.









By:







Name: Eiji Watanabe







Title: President & CEO







                        MOELIS & COMPANY HOLDINGS LP







            By: Moelis & Company Holdings GP LLC







Its: General Partner















By:







Name: Kenneth D. Moelis







Title: Chief Executive Officer







            MOELIS & COMPANY HOLDINGS GP LLC









By:







Name: Kenneth D. Moelis







Title: Chief Executive Officer







  [Signature Page to the Strategic Alliance Agreement]

  Exhibit A   Representations and Warranties of the Moelis Entities   In addition to the representations and warranties set forth in the Subscription Agreement, and except as specifically set forth in the Disclosure Schedule delivered to SMBC/Nikko simultaneously with the execution hereof (the Moelis Disclosure Schedule), Moelis Holdings and Moelis General Partner represent and warrant to SMBC/Nikko that:   (a) Organization and Authority. Each of the Moelis Entities has all requisite corporate or other entity power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, other than any failure to be so licensed or qualified that would not reasonably be expected to have a material adverse effect on the Moelis Entities and their controlled affiliates, taken as a whole.   (b) Moelis Holdings Agreement. The Moelis Holdings Agreement has been duly authorized, executed and delivered by Moelis General Partner and is a valid and legally binding agreement of Moelis General Partner, enforceable against it in accordance with its terms, except (i) as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or other similar applicable laws affecting the enforcement of creditors' rights generally and (ii) that the remedies of specific performance, injunction and other forms of equitable relief may not be available because they are subject to certain tests of equity jurisdiction, equitable defenses and the discretion of the court before which any proceeding therefor may be brought. The Moelis Holdings Agreement attached as Tab 5 of the Subscription Agreement is a true, correct and complete copy of the Moelis Holdings Agreement as currently in effect.   (c) Affiliates. Each controlled affiliate of Moelis Holdings is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation and has all requisite corporate or other entity power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, other than any failure to be in good standing or to be so licensed or qualified that would not reasonably be expected to have a material adverse effect on the Moelis Entities and their controlled affiliates, taken as a whole. All the issued and outstanding shares of capital stock or other partnership, equity or ownership interests of such controlled affiliates have been duly authorized and validly





issued, are fully paid and nonassessable with no personal liability attaching to the ownership thereof (except as provided for in the governing documents of such controlled affiliate), have been issued in compliance with all applicable securities laws, and were not issued in violation of any preemptive rights or other right to subscribe for or purchase securities. Except as set





  forth in the Moelis Disclosure Schedule, Moelis Holdings owns, directly or indirectly, all of the issued and outstanding equity interests of each of its controlled affiliates, free and clear of all liens or encumbrances.   (d) Capitalization. (1) The Moelis Disclosure Schedule sets forth a true and complete list of the number, class and series of each issued and outstanding class and series of Partnership Interests as of the date of this Agreement. (2) All of the issued and outstanding Partnership Interests have been duly authorized and validly issued and are fully paid and nonassessable, and have been issued in compliance with all applicable securities laws, and were not issued in violation of any preemptive rights or other rights to subscribe for or purchase securities. (3) Except with respect to employees of Moelis Holdings or its controlled affiliates and except as set forth in the Moelis Holdings Agreement, none of Moelis Holdings or any of its controlled affiliates has or is bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of, or securities or options, warrants or rights convertible or exercisable into or exchangeable for, any Partnership Interests or other equity or synthetic ownership interests of Moelis Holdings or any controlled affiliate, or any securities representing or contractual right granting the right (i) to purchase or otherwise receive any equity interest in Moelis Holdings or any controlled affiliate (including any rights plan or agreement) or (ii) to receive any periodic or other distribution on net income or net loss or upon the liquidation and winding up of Moelis Holdings or any controlled affiliate. (4) (a) Except as set forth in the Moelis Disclosure Schedule, as of the date of this Agreement, there are no, written or oral, side letter, contract, memorandum of understanding and any other agreements entered into between any of Moelis Entities on one hand and any Limited Partner of Moelis Holdings on the other hand in respect to of the issuance or holding of any class or type of interest in Moelis Holdings, regardless of whether such side letter, written contract, memorandum of understanding and any other agreements are entered into by such Limited Partner in its capacity as such, except for any vesting agreements, employment agreements, offer letters or similar agreements entered into between the Moelis Entities and employees of Moelis Holdings or its controlled affiliates; and (b) as of the date of this Agreement, no preferential voting or economic right granted to any Limited Partner of Moelis Holdings pursuant to any Representation (d) Transaction Agreements (as defined in the Moelis Disclosure Schedule) would reasonably be expected to significantly and adversely affect any voting or economic right of the SMBC Unit-Holders under the Moelis Holdings Agreement, the Subscription Agreement, the Side Letter or this Agreement (as applicable), other than as a result of dilution in accordance with the Moelis Holdings Agreement from the issuance of additional Management Units pursuant to such Representation (d) Transaction Agreements. (5) The Moelis Disclosure Schedule sets forth a schedule of SMBC's pro forma ownership of Moelis Holdings, as of the date of this Agreement, after giving effect to the transactions contemplated by the Subscription Agreement and the methodology for calculating such pro forma ownership as described in such schedule.   (e) Partnership Interests. The issuance of Partnership Interests to SMBC pursuant to the Subscription Agreement has been duly authorized by all necessary action on the part of Moelis Holdings. When issued, delivered and sold against receipt of   A-2





  the consideration therefor as provided in the Subscription Agreement, such Partnership Interests will be validly issued, fully paid and nonassessable and without any personal liability attaching to the ownership thereof (except as provided for in the Moelis Holdings Agreement), will not be issued in violation of or subject to preemptive rights of any other unitholder of Moelis Holdings and will not result in the violation or triggering of any price-based antidilution adjustments under any agreement to which Moelis Holdings is a party. The issuance of Partnership Interests to SMBC qualifies as an issuance of Additional Units to a Strategic Investor under Section 3.4.1 of the Moelis Holdings Agreement for which existing Common Partners will not have the right of first refusal as provided therein.   (f) No Conflicts. Neither the execution and delivery by the Moelis Entities of the Strategic Alliance Agreement or the Subscription Agreement, nor the consummation of the transactions contemplated thereby, nor compliance by the Moelis Entities with any of the provisions thereof, will violate any applicable law or regulation or violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or result in the loss of any benefit or creation of any right on the part of any third party under, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any lien or encumbrance upon any of the material properties or assets of any of the Moelis Entities or any of their controlled affiliates under any of the terms, conditions or provisions of (i) their respective organizational documents or (ii) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which any of the Moelis Entities or any of their controlled affiliates is a party or by which it may be bound, or to which any of the Moelis Entities or any of their controlled affiliates or any of the properties or assets of any of the Moelis Entities or any of their controlled affiliates may be subject, except as would not reasonably be expected to have a material adverse effect on the Moelis Entities and their controlled affiliates, taken as a whole.   (g) Consents. No consents or approvals of or prior filings or registrations with any governmental authority or with any third party are necessary in connection with the execution and delivery by the Moelis Entities of the Strategic Alliance Agreement, the Subscription Agreement or the Side Letter, or the consummation of the transactions contemplated thereby.   (h) Financial Statements. The Moelis Entities have previously made available to SMBC/Nikko true and correct copies of (i) the consolidated balance sheets of Moelis Holdings as of December 31 for the fiscal years 2007 through 2010, inclusive, and the related consolidated statements of income, changes in total capital and of cash flows for the fiscal years then ended, in each case accompanied by the audit report of Deloitte and Touche LLP, independent public accountants with respect to Moelis Holdings and (ii) the September 30, 2011 unaudited consolidated balance sheet of Moelis Holdings and the related unaudited consolidated statements of income, changes in total capital and of cash flows for the nine-month period then ended (including the related notes, where applicable) (each of the above, the Financial Statements). The Financial Statements have been prepared from, are in accordance with and accurately reflect in all   A-3





  material respects, the books and records of Moelis Holdings and its controlled affiliates, have been prepared in all material respects in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (except as may be stated in the notes thereto), are true and complete and fairly present in all material respects the consolidated financial position and the consolidated results of operations and cash flows (and changes in financial position, if any) of Moelis Holdings and its controlled affiliates as of the times and for the periods referred to therein (subject, in the case of unaudited statements, to normally recurring year-end audit adjustments which are not material either individually or in the aggregate).   (i) Business Plan. All estimates and pro forma financial information contained in the business plan included in the Moelis Disclosure Schedule, as of the date of the business plan were prepared in good faith by the Moelis Entities.   (j) Properties and Leases. Moelis Holdings and its controlled affiliates have good and marketable title to all material properties and assets, real and personal, tangible or intangible, owned by them, in each case free from liens or encumbrances that would materially affect the value thereof or interfere with the use made or to be made thereof by them in any material respect. Moelis Holdings and its controlled affiliates own or lease all material properties as are necessary to their operations as now conducted.   (k) Taxes. The Moelis Entities and their controlled affiliates have filed, or joined in the filing of, all material tax returns required to be filed by or with respect to them prior to the date of this Agreement, and to the best knowledge of the Moelis Entities all such tax returns are true, accurate and complete in all material respects and all material amounts of taxes shown to be due in such tax returns have been paid, collected or withheld, as the case may be. With respect to any completed taxable period for which such tax returns have not yet been filed, or for which taxes are not yet due or owing, the Moelis Entities and their controlled affiliates have made due and sufficient current accruals for any such taxes on their respective balance sheets in accordance with United States generally accepted accounting principles. To the best knowledge of the Moelis Entities, there are no material claims or assessments pending against the Moelis Entities or their controlled affiliates for any alleged deficiency in any tax, and the Moelis Entities and their controlled affiliates have not been notified of any material proposed tax claims or assessments against the Moelis Entities or their controlled affiliates.   (l) No Undisclosed Liabilities. As of the date of this Agreement, neither Moelis Holdings nor any of its controlled affiliates has any liabilities or obligations of any nature (absolute, accrued, contingent or otherwise) except for (i) liabilities or obligations disclosed in the Financial Statements and current liabilities that have arisen since the date thereof in the ordinary and usual course of business and consistent with past practice, (ii) liabilities or obligations arising under contracts entered into by Moelis Holdings and/or its controlled affiliates prior to the date hereof, or (iii) liabilities or obligations that would not reasonably be expected to have a material adverse effect on Moelis Holdings and its controlled affiliates, taken as a whole.   A-4





  (m) Employment Agreements. Each managing director of Moelis Holdings or any of its controlled affiliates, as applicable, has entered into either an offer letter, agreement or term sheet setting forth the terms of such managing director's employment and vesting of Management Units granted to such managing director in connection with his or her employment. The forms of vesting agreements for the Management Units provided by Moelis Holdings to SMBC/Nikko, taken as a whole, are representative of the vesting agreements entered into by Moelis Holdings or each controlled affiliate, as applicable, with respect to the grant of Management Unit; except for differences that would not reasonably be expected to have a material adverse effect on the Moelis Entities and their controlled affiliates, taken as a whole, or the SMBC Unit- Holders' Partnership Interests.   (n) Litigation. None of the Moelis Entities or any of their controlled affiliates is a party to any, and there are no pending or, to the Moelis Entities' knowledge, threatened, material legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations (i) of any nature against the Moelis Entities or any controlled affiliate except as would not reasonably be expected to have a material adverse effect on the Moelis Entities and their controlled affiliates, taken as a whole, or (ii) challenging the validity or propriety of the transactions contemplated by the Subscription Agreement. There is no material injunction, order, judgment, decree or regulatory restriction imposed upon the Moelis Entities, any controlled affiliate or any of their assets, except for regulatory restrictions of general application.   (o) Compliance with Laws. Each of the Moelis Entities and each of their controlled affiliates have all permits, licenses, franchises, authorizations, orders and approvals of, and have made all filings, applications and registrations with, all governmental authorities that are required in order to permit them to own or lease their properties and assets and to carry on their businesses as they are now being conducted other than any failure that would not reasonably be expected to have a material adverse effect on the Moelis Entities and their controlled affiliates, taken as a whole. Except as would not be reasonably expected to have a material adverse effect on the Moelis Entities and their controlled affiliates, taken as a whole, each of the Moelis Entities and their controlled affiliates has complied with, and is not in default or violation of, and none of them is given notice of any violation or threat of violation of, to the knowledge of the Moelis Entities, under investigation with respect to or, to the knowledge of the Moelis Entities, has been threatened to be charged with, any applicable law, statute, ordinance, license, rule, regulation, policy or guideline, order, demand, writ, injunction, decree or judgment of any governmental authority. Except as would not be reasonably expected to have a material adverse effect on the Moelis Entities and their controlled affiliates, taken as a whole, and except for statutory or regulatory restrictions of general application, no governmental authority has placed any restriction on the business or properties of the Moelis Entities or any of their controlled affiliates.   (p) Risk Management. The Moelis Entities and their controlled affiliates have in place risk management policies and procedures, of the type and in the form that the Moelis Entities and their controlled affiliates believe, in good faith, are sufficient in scope and operation to protect against risks of the type and in the form   A-5





  expected to be used by persons of similar size and in similar lines of business as such Moelis Entity or controlled affiliate.   (q) Insurance. The Moelis Entities and their controlled affiliates maintain insurance underwritten by insurers of recognized financial responsibility, of the types and in the amounts that the Moelis Entities and their controlled affiliates believe, in good faith, are adequate for their respective businesses, all of which insurance is in full force and effect.   (r) Permanent Disability. To the knowledge of the Moelis Entities, (i) KM has not (A) suffered and is not currently suffering any physical or mental incapacity or disability, total or partial, that would constitute or would reasonably be expected to result in a Key Man Event (as such term is defined in the Moelis Holdings Agreement) or (B) been absent from work for three or more consecutive months at any time since the inception of the Moelis Entities and (ii) no other circumstance or condition exists that would constitute or would reasonably be expected to result in a Key Man Event. Since the inception of the Moelis Entities, no Key Man Event has occurred.   (s) Affiliate Party Transactions. Except as set forth in the Moelis Disclosure Schedule and except for agreements related to employment, (i) any material transactions between any of the Moelis Entities, on the one hand and the Management Partners of any of the Moelis Entities or any of their affiliates (other than any of the Moelis Entities and any controlled affiliate), on the other hand are on terms and conditions as favorable to each of the Moelis Entities as would have been obtainable by it in a comparable arm's-length transaction with an unrelated third party.   (t) No Guarantee of Performance. None of the Moelis Entities or any of their controlled affiliates has guaranteed the future performance or results of, or is liable in connection with, on behalf of, or for, any obligation of (i) any pooled investment vehicle, open-end investment company, closed-end investment company, unit investment trust or business development company or other private or public fund (except, general partner liability to the extent imposed by applicable law) or (ii) any Person to which any of the Moelis Entities or any of their controlled affiliates provides investment management or investment advisory services, including any sub-advisory services, pursuant to an investment advisory contract.   (u) Effect of Agreement. None of this Agreement, the Subscription Agreement or any other agreement entered into in connection therewith is subject to the disclosure rights under, or grant other Limited Partners rights pursuant to, Section 10.19 of the Moelis Holdings Agreement.   A-6
answer:

Highlight the parts (if any) of this contract related to Third Party Beneficiary that should be reviewed by a lawyer. Details: Is there a non-contracting party who is a beneficiary to some or all of the clauses in the contract and therefore can enforce its rights against a contracting party?