TASK DEFINITION: In this task, you're given a passage that represents a legal contract or clause between multiple parties, followed by a question that needs to be answered. Based on the paragraph, you must write unambiguous answers to the questions and your answer must refer a specific phrase from the paragraph. If multiple answers seem to exist, write the answer that is the most plausible.
PROBLEM: 1                                                                    Exhibit 10.17

                           SPONSORSHIP AGREEMENT

      THIS SPONSORSHIP AGREEMENT (the Agreement) is made and entered into this the 24th day of February, 1998, by and between Southern Racing Promotions, Inc., (SRP) a Tennessee corporation, and Logan's Roadhouse, Inc., a Tennessee corporation (Logan's), with its principal place of business in Nashville, Tennessee.

      WHEREAS, SRP is engaged in the business of operating an automobile  racing team;

      WHEREAS, SRP is securing sponsorship funds to offset the direct costs of campaigning a NASCAR Late Model Stock Car (LMSC) Racing Team (the Team) in the 1998 racing season at Nashville Motor Speedway (NMS);

      WHEREAS, Logan's desires to become the primary sponsor of the Team to promote its restaurant concept in Middle Tennessee and the southeastern United States; and

      WHEREAS, the parties desire to set forth in this agreement their  respective rights and obligations;

      NOW, THEREFORE, in consideration of the promises and Agreements set forth herein, the parties hereto agree as follows:

      1. PRIMARY SPONSOR. For the 1998 racing season, Logan's shall be the primary sponsor of the Team, which fields a LMSC racing vehicle (the Race Car) driven by Brad Baker. During the term of this Agreement, SRP will not represent any other product or company or accept as a primary, secondary, associate or contingent decal sponsor any other product reasonably deemed by Logan's to be competitive with Logan's.

      2. TERM. The term of this Agreement shall commence on the date hereof  and, unless terminated as provided herein, shall continue through November 30, 1998.

      3. SERVICES TO BE PROVIDED BY SRP.  SRP shall perform the following  services for Logan's in connection with race programs:

         (A) THE DRIVER. Except as specifically provided in this Agreement,  Brad Baker (Baker) will be the only driver for the Team for the term of this Agreement. If Baker is unavailable to perform as driver as a result of injury, illness or any other disability, or cause beyond his control, SRP shall provide an alternate driver subject to the approval of Logan's (Alternate Driver), which approval shall not be unreasonably withheld. Baker and any Alternate Driver appointed by SRP and approved by Logan's pursuant to this Agreement are herein collectively

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referred to as the Driver. The Driver shall not drive for any other sponsor which competes with Logan's. The Driver shall not drive any other race vehicle for any other sponsor than Logan's without prior written notice from SRP to Logan's.

               (B) ADVERTISING, ENDORSEMENTS, ETC. Unless otherwise provided  in this Agreement, Logan's shall have the right at no additional expense to use the name, likeness and voice of Baker for endorsements, advertising and promotions in all forms of media.

               (C) PUBLIC IMAGE. SRP shall be primarily responsible for developing and maintaining a positive public image for the Driver and the Team. To facilitate this aim and in recognition of Logan's sensitivity to any adverse publicity with respect to the Driver and the Racing Team, SRP shall be responsible for the public image of the Driver and the Racing Team at all times, including but not limited to any statement by the Driver or the Team in connection with press conferences, media contact and any contact of the Driver or Team with the general public, whether at a race or otherwise.

               (D) CAR DESIGN. Consistent with NASCAR rules and regulations and the terms of Articles 4 and 5 of this Agreement, SRP will develop a graphic design for the Race Car (the Graphic Design). SRP will purchase decals for the Race Car based upon the Graphic Design and shall be responsible for painting the Race Car in conformity with the Graphic Design.

               (E) UNIFORMS. SRP will provide race day uniforms for up to a maximum of 12 personnel and a driver suit for the Driver. Consistent with the NASCAR rules and regulations, and excluding any patches required by NASCAR, Logan's shall have the exclusive right to promote its Logan's logo on uniforms and Driver's suit on the areas depicted on Exhibit A to this Agreement. Logan's also shall have the exclusive right to promote its Logan's trademark on the side of the helmet, as shown on Exhibit B to this Agreement. Uniforms and Driver's suit may display one patch each for up to two secondary or associate sponsors, provided such secondary or associate sponsors have been approved in advance by Logan's, such patches to be located as mutually agreed upon by Logan's and SRP. The Driver shall not appear in a race uniform or driving suit other than the





Logan's uniform/suit in connection with or portraying involvement in NASCAR LMSC racing, whether or not used in product advertising or promotion.

               (F) CREDENTIALS. At the request of Logan's and consistent with NASCAR and race track rules, regulations and procedures, SRP will use best efforts to secure credentials for the pre-race admissions of a maximum of four designees of Logan's to pit row and/or the garage area of each regularly scheduled or special LMSC event in which the Race Car competes.

               (G) SHOW CAR. SRP will build and provide to Logan's a 1997 Ford Thunderbird automobile (Show Car) that will have an appearance identical to

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that of the race car, to include full roll cage, race interior, paint, graphics and under-hood race look. Logan's will provide equipment and driver to transport the Show Car to destinations and according to schedules as determined by Logan's. At the expiration of this contract, Logan's will return the Show Car to SRP in substantially the same condition as when received by Logan's, normal wear and tear excepted.

         (H) TRANSPORTER. SRP is attempting to purchase or lease a 53 foot  semi-trailer to be pulled by a Peterbilt class eight tractor which will function as the Race Car transporter (the Transporter). In the event SRP is successful in procuring the Transporter, it will be lettered and pictured with Logan's racing graphics by SRP up to a maximum cost allowance of Two Thousand Five Hundred and No/100's ($2,500.00), with Logan's retaining the right to apply more extensive graphics at its own expense if Logan's so chooses. Any associate sponsor graphics appearing on the Transporter will be displayed in a subservient manner to clearly reflect Logan's as the primary sponsor of the Team.

         (I) AUTHORITY OF SRP.  SRP hereby warrants that it has the authority to grant all rights to Baker under this Article 3.

      4. ASSOCIATE AND SECONDARY SPONSORSHIPS. SRP shall have the right to obtain secondary and associate sponsors for the Race Car and Team, subject to the approval of Logan's, which approval shall not be unreasonably withheld. SRP may not obtain any associate or secondary sponsors whose products or concepts compete with Logan's. Any associate and/or secondary sponsor may promote its role as a sponsor by signage, logos or trademarks on the Race Car, provided that such associate and/or secondary sponsors signage, logos or trademarks used on the Race Car, when viewed collectively, shall not cover any area greater than 25% of that of Logan's signage, logos or trademarks, nor conflict with the graphic design, or in other locations or on clothing as may be permitted by the terms of the Agreement. Logan's shall have the exclusive use of the hood, the rear quarter panel area above the tire and the bottom of the deck lid (rear facing panel, TV panel) of the Race Car, as shown on Exhibit C to this Agreement. All other areas permitted by NASCAR for sponsor signage, logos or trademarks and the spoiler space are reserved for NASCAR, SRP and the associate and secondary sponsors. All associate and secondary sponsors' graphic layouts for the Race Car are subject to Logan's approval, which shall not be unreasonably withheld. Furthermore, SRP shall not permit any associate or secondary sponsor to suggest in any manner that its sponsorship role is as great as that of Logan's.

      5. CONTINGENT SPONSORS. SRP intends to participate in NASCAR and NMS decal sponsor programs such as a series sponsor, and race related products such as tires and fuel. Logan's acknowledges that NASCAR or NMS require the placing of certain decals on the Race Car as a prerequisite for competing in a racing event. SRP acknowledges that such required decals shall be placed forward of the

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door panel, or as otherwise required by NASCAR rules and regulations, in a way not to detract from Logan's signage.

      6. COMPENSATION. In consideration of the services provided, SRP shall  be entitled to a base fee of Eighty Thousand Dollars and No/100's (580,000.00) payable as follows:

         (i) $40,000.00 payable upon execution of this contract; and

         (ii) the balance of $40,000.00 payable in eight equal monthly   installments of $5,000 each, due the first day of March, April, May, June, July, August, September and October, 1998.

      7. TRADEMARKS. It is expressly understood that SRP may use the Logan's trademarks, logos or other symbols only as directed or approved by Logan's and that Logan's may use the trademarks, logos, symbols, name, likeness, voice or signature of the Driver, the Team or any secondary or associate sponsor only as directed or approved by the Driver, or secondary sponsors, as appropriate. SRP may license and use the Logan's name and Trademark in promotions directly related to the Race Car or the Team, such as souvenir items, hats, shirts, etc. Upon termination of this Agreement, SRP and any associate or secondary sponsors shall immediately cease all use of all Logan's trademarks, trade names, service marks, logos, symbols or other designations, and Logan's shall immediately cease all use of trademarks, trade names, service marks, logos, symbols or other





designation of SRP or any associate or secondary sponsors, as well as any and all use of name, likeness, voice or signature of the Driver.

      8. CONFIDENTIALITY. Both parties shall exercise due care to protect the confidentiality of any information exchanged between them as a result of this Agreement, including information exchanged during the negotiation of this Agreement, and shall not use such information to the disadvantage of the other party. However, nothing contained herein will prevent either party from fully utilizing information already known to such party or information which is or becomes generally available to the public through no fault of such party that has the right to disperse such information without breaching any obligation to one of the parties to this Agreement. The parties each specifically agree not to share confidential information received from the other party with any agent, including their respective advertising agencies, unless the party wishing to share such information with this agent receives written approval from the other party.

      9. POWER AND AUTHORITY. Logan's and SRP warrant they have full power and authority to enter into and perform this Agreement, and the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action, and each has the ability to provide the services called for hereunder. Upon the execution and delivery of this agreement, it will be a valid and binding obligation of Logan's and SRP in accordance with its terms. Logan's and

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SRP further warrant they have not made, nor will make, any Agreement or commitment which would prevent or interfere in any way with the full performance of the obligations hereunder or the full enjoyment of the other party hereunder.

      10. SPECIAL RIGHT OF TERMINATION.  Either party shall have the right to terminate this Agreement, subject to the following terms and conditions:

          (a) Either party (the Terminating Party) may terminate this Agreement upon prior written notice to the other party (the Defaulting Party) upon the occurrence of any of the following conditions:

              (i) In the event that such party materially breaches this   Agreement or materially defaults in the performance of any obligation hereunder and fails to cure said breach within 30 days of written notice to the Defaulting Party by the Terminating Party;

              (ii) Immediately in the event that the Defaulting Party   (including, for SRP, the Driver) commits any crime involving moral turpitude or otherwise commits any act or is involved in any situation bringing itself, the Terminating Party or the products of the Terminating Party into public hatred or contempt, or engages in conduct that shocks or insults the community or brings the Terminating Party, or its products into public disrespect, scandal or ridicule; or

              (iii) In the event the LMSC series at NMS is canceled.

          (b) In the event Logan's terminates this Agreement pursuant to this Article 10, Logan's shall be entitled to a pro rata refund of amounts prepaid for the current calendar year, with no further obligations under this Agreement.

      11. FORCE MAJEURE. Neither party hereto will be considered in default of this Agreement or be liable for damages therefor, for any failure of performance hereunder occasioned by an Act of God, force of nature, physical casualty, accident, war or warlike activity, insurrection or civil disorder or other cause beyond its reasonable control, provided the party so affected gives prompt notice to the other.

      12. RELEASE. Except as may be otherwise provided in this Agreement, including amounts due SRP from Logan's under Article 6 of this Agreement, neither SRP nor its employees or agents shall make any claims against Logan's with respect to any remuneration in the nature of salary or otherwise for any cost, damage, loss or expense incurred for any reason, including, but not limited to, damage, injury or death which may be suffered by SRP or its employees or agents, third parties, or any property of SRP or property of its agents or employees, or property of any third parties. SRP shall obtain from the Driver and from each of its employees who is a member of the Team a release in favor of Logan's from all liability with respect to any of the above.

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      13. INSURANCE. SRP shall provide at its expense, and maintain throughout the term of this Agreement, comprehensive general liability insurance in the amount of Five Million Dollars and No/100's ($5,000,000.00) per occurrence with respect to any liability relating to the activities of SRP in the performance of this Agreement SRP shall supply Logan's with a copy of the Certificate of Insurance naming Logan's as an additional insured. Such policies shall provide for at least fifteen (15) days' written notice to Logan's of the cancellation or substantial modification thereof. Such insurance will be supplemental coverage in excess of the Five Million Dollars ($5,000,000.00)





primary coverage provided to SRP and Logan's by the comprehensive liability policy of NMS.

      14. NOTICES. All notices required or permitted hereunder shall be in writing and shall be deemed to be properly given: (a) when personally delivered to the party entitled to receive the notice; (b) upon receipt of facsimile message confirmed by first class mail, postage prepaid; (c) upon receipt of package delivered by overnight courier; or (d) when sent by certified or registered mail, postage prepaid properly addressed.

      15. WAIVERS.  A waiver of any provision of this Agreement shall be  enforceable only if the waiver is in writing signed by the party against whom the waiver is sought to be enforced. A failure by a party at any time to exercise any rights hereunder shall not constitute a waiver of such rights at another time.

      16. NATURE OF RELATIONSHIP.  The parties expressly acknowledge and  agree that SRP is acting as an independent contractor and not as a employee of, or partner or joint venturer with, Logan's. Each party is responsible for all taxes relating to its operation, including payroll taxes for its employees.

      17. AMENDMENTS AND ASSIGNMENTS.  This Agreement may not be modified or assigned except in writing signed by SRP and Logan's.

      18. GOVERNING LAW.  This Agreement shall be constructed under and  governed by the laws of the State of Tennessee.

      19. SEVERABILITY. In the event that any provision of this Agreement is for any reason found and declared to be invalid, illegal or unenforceable, then such provision shall be deemed amended only to the extent necessary to eliminate such invalidity, illegality or unenforceability. In any such event, the validity of the remaining portions or provisions of this Agreement shall not be affected.

      20. BENEFITS.  This Agreement shall inure to the benefit of and be   binding upon the parties and their respective heirs, executors, administrators, successors and permitted assigns.

      21. CAPTIONS.  Sections, titles or captions contained in this Agreement are inserted as a matter of convenience and for reference and in no way define, limit,

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extend or describe the scope of this Agreement or the intent of any provision  thereof.

      22. COUNTERPARTS.  This Agreement may be executed in multiple   counterparts, each of which shall be deemed an original, but all of which taken together shall constitute but one in the same instrument.

      23. ENTIRE AGREEMENT.  This Agreement contains the entire understanding between the parties with respect to the subject matter hereof and supersedes all prior written or oral agreements between them with respect to the subject to the subject matter hereof.

      IN WITNESS WHEREOF, the parties have executed this Agreement.

                                      Logan's Roadhouse, Inc.

                                      By:     /s/ Edwin W. Moats, Jr.                                                  -------------------------------

                                      Name:   Edwin W. Moats, Jr.                                                  -------------------------------

                                      Title:  President and CEO                                                  -------------------------------

                                      Southern Racing Promotions, Inc.

                                      By:     /s/ Gary T. Baker                                                  -------------------------------

                                      Name:   Gary T. Baker                                                  -------------------------------

                                      Title:  President                                                  -------------------------------

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Question: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?

SOLUTION: Certificate of Insurance naming Logan's as an additional insured.

PROBLEM: EXHIBIT 10.32

               CO-BRANDING, MARKETING AND DISTRIBUTION AGREEMENT

     This Agreement, dated as of January 30, 2000 (Effective Date), is made and entered into by and between Amazon.com Commerce Services, Inc., a Delaware corporation (ACSI), and Audible Inc. a Delaware corporation (Company).  ACSI and Company are sometimes referred to collectively herein as the Parties and individually as a Party.  ACSI and Company agree as follows:

Section 1.  Definitions

     Whenever used in this Agreement with initial letters capitalized, the following terms shall have the following specified meanings:

     ACSI Competitor means, collectively, such persons and entities as the Parties may agree upon from time to time.  ACSI may update any agreed-upon list of ACSI Competitors no more frequently than once per quarter by written notice, provided that: (a) the number of entities specified on such list shall at no time [***]; (b) any entities added to such list must be [***]; and (c) no addition of any ACSI Competitor to such list shall require Company to breach any contractual or legal obligation to such ACSI Competitor by which Company is bound as of the date of such addition.

     ACSI Derivative Work means any Derivative Work (whether created by ACSI, Company, or the Parties jointly) of any ACSI Existing Intellectual Property or ACSI Future Intellectual Property.

     ACSI Existing Intellectual Property means, collectively, all of the following existing as of the Effective Date: (a) the Trademarks of ACSI and its Affiliates; and (b) the ACSI Site, including, without limitation, any and all content, data, URLs, domain names, technology, software, code, user interfaces, look and feel, ACSI Site Functionality, Trademarks and other items posted thereon or used in connection or associated with any of the foregoing.

     ACSI Future Intellectual Property means, collectively, all of the following which are invented, created, developed or first reduced to practice by ACSI or its Affiliates after the Effective Date without the participation of Company or its Affiliates: (a) any Trademarks; and (b) any content, data, URLs, domain names, technology, software, code, user interfaces, look and feel, ACSI Site Functionality and other items (but excluding any Company Derivative Works).

     ACSI Intellectual Property means, collectively, any ACSI Existing Intellectual Property, ACSI Future Intellectual Property and ACSI Derivative Works, but excluding any Joint Works.

--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission.

                                      -1-

     ACSI Product Section means a discrete group of products available on the ACSI Site which is identified by a tab or other top-level product category identifier on the ACSI Site Home Page, but excluding: (a) the ACSI Site Home Page itself; and (b) any mechanisms, areas or services on or through which third parties may sell products through the ACSI Site in connection with ACSI's and its Affiliates' programmatic selling initiatives (including, without limitation, the existing Auctions, zShops, Sothebys.amazon.com and Amazon.com Advantage areas and services of the ACSI Site, and any successors or replacements to any of them).

     ACSI Product Sub-Section means a discrete sub-set of products in any ACSI Product Section which is accessible by following or using a browse tree or hypertext links on the ACSI Site, and is identified by a permanent product category description on the ACSI Site  (e.g., as opposed to a description generated in response to a user search query), but is not identified by a tab or other top-level product category identifier on the ACSI Site Home Page (e.g., as of the Effective Date, the business & investing or audio books sub-set of products included in, and accessible through the browse tree of, the ACSI Product Section identified by the Books tab on the ACSI Home Page (the Books Product Section)).

     ACSI Site means that Web Site, the primary Home Page of which is identified by the URL www.amazon.com (and any successor or replacement Web                       -------------- Site).  For the avoidance of doubt, the ACSI Site does not include any other Web Sites maintained by or for ACSI or its Affiliates (including, without limitation, those Web Sites, the primary Home Pages of which are identified by the URL's www.amazon.co.uk and www.amazon.de).           ----------------     -------------

     ACSI Site Functionality means, collectively: (a) tab, search and browse functionality available to users of the ACSI Site for navigating through ACSI Product Sections (including, without limitation, the layout and design thereof); (b) payment and transaction functionality available to users of the ACSI Site for purchasing products (including, without limitation, shopping cart and Payment with 1-Click functionality), (c) any other functionality available on the ACSI Site which ACSI may make available to Company from time to time, and (d) any future equivalents, improvements and enhancements of any of the foregoing.

     Affiliate means, with respect to any person or entity (including either Party), any other person or entity that directly or indirectly controls, is controlled by or is under common control with that person or entity, or which that person or entity beneficially owns at least fifty percent (50%) of the equity interests therein (provided, however, that with respect to the Parties, no individual or entity as to which the ultimate parent entity of a Party does not directly or indirectly control the operations or management thereof (e.g., in the case of ACSI as of the date of this Agreement, Gear.com, Inc.) shall be deemed to be an Affiliate of such Party for purposes of this Agreement).

     Annual Fee means the sum of [***], representing the fixed fee payable by Company to ACSI with respect to each Year.

---------------

Source: AUDIBLE INC, 10-Q, 11/13/2000





***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission.

                                      -2-

     Change of Control means, with respect to Company, a transaction or series of related transactions that results in (a) a sale of all or substantially all of the assets of Company, (b) the transfer of fifty percent (50%) or more of the outstanding voting power of Company (other than directly or indirectly to a parent or wholly-owned subsidiary of Company), or (c) the acquisition by a person or entity, by reason of any contractual arrangement or understanding with one or more persons or entities, of the right or power to appoint or cause to be appointed a majority of the directors or officers of Company.

     Claim means any claim, action or proceeding instituted by a third party (other than an Affiliate of a Party), including, without limitation, any governmental authority.

     Closing means the consummation of the purchase of common stock of Company pursuant to the Securities Purchase Agreement between ACSI and Company dated on or about the Effective Date (the Securities Purchase Agreement).

     Company Derivative Work means any Derivative Work (whether created by ACSI, Company, or the Parties jointly) of any Company Existing Intellectual Property or Company Future Intellectual Property.

     Company Existing Intellectual Property means, collectively, all of the following existing as of the Effective Date: (a) the Trademarks of Company and its Affiliates; (b) the Company Site, including, without limitation, any and all content, data, URLs, domain names, technology, software, code, user interfaces, look and feel, Trademarks and other items posted thereon or used in connection or associated with any of the foregoing

     Company Future Intellectual Property means, collectively, all of the following which are invented, created, developed or first reduced to practice by Company or its Affiliates after the Effective Date without the participation of ACSI or its Affiliates: (a) any Trademarks; and (b) any content, data, URLs, domain names, technology, software, code, user interfaces, look and feel or other items (but excluding any ACSI Derivative Works).

     Company Intellectual Property means, collectively, any Company Existing Intellectual Property, Company Future Intellectual Property, and Company Derivative Works, but excluding any Joint Works.

     Company Site means, collectively: (a) that Web Site, the primary Home Page for which is identified by the URL www.audible.com (and any successor or replacement Web Site); and (b) any other Web Sites operated by or for Company or its Affiliates from time to time (excluding the Mirror Company Site) through which Spoken-Word Audio Products are sold or offered for sale.

     Confidential Information means, with respect to either Party, all information relating to such Party or its Affiliates that is designated as confidential or that, given the nature of the information or the circumstances surrounding its disclosure, reasonably should

                                      -3-

be considered as confidential. Confidential Information includes, without limitation, (a) all information relating to a Party's or its Affiliates' technology, customers, business plans, promotional and marketing activities, finances and other business affairs; (b) all third party information that a Party or its Affiliates is obligated to keep confidential; and (c) the terms of this Agreement. Confidential Information may be contained in tangible materials, such as drawings, data, specifications, reports and computer programs, or may be in the nature of unwritten knowledge. Confidential Information does not include any information that (i) has become publicly available without breach of this Agreement, (ii) can be shown by documentation to have been known to the Receiving Party at the time of its receipt from the Disclosing Party or its Affiliates without a breach of confidentiality or other improper means, (iii) is received from a third party who did not acquire or disclose such information by a wrongful or tortious act or (iv) can be shown by documentation to have been independently developed by the Receiving Party without reference to any Confidential Information.

     Derivative Work means any adaptation, modification, enhancement, improvement or derivative work.

     Disclosing Party means a Party that discloses Confidential Information to the other Party in connection with this Agreement.

     Exclusive Spoken-Word Audio Products means: (a) spoken-word audio-only products, in a format suitable for digital download and/or streaming, [***]

     Existing ACSI Product Section means any ACSI Product Section identified on the ACSI Site Home Page as of the Effective Date, as shown in the screen shot attached as Exhibit A.

     Home Page means, with respect to a Web Site or section of a Web Site (e.g., any section of the ACSI Site primarily related to an ACSI Product Section or ACSI Product Sub-Section), the Web page designated by the operator of the Web Site as the initial and primary end user interface for such Web Site or section of a Web Site.

     Internet Radio Service means a service through which users may receive interactive or other broadcasts via the Internet or other public or private data networks.

     Joint Work means any content, data, URLs, domain names, technology, software, code, user interfaces, look and feel or other items which are invented, created, developed or first reduced to practice jointly by the Parties after the Effective Date, are protected or protectable by any Intellectual Property Rights and either: (a) include or incorporate both ACSI Existing Intellectual Property, ACSI Future Intellectual Property and/or ACSI Derivative Works, on the one hand, and/or Company Existing Intellectual Property, Company Future Intellectual Property and/or Company Derivative Works, on the other hand; or (b) include or incorporate no ACSI Existing Intellectual Property or ACSI

Source: AUDIBLE INC, 10-Q, 11/13/2000





Derivative Works, on the one hand, or Company Existing Intellectual Property or Company Derivative Works, on the other hand; provided, however, that notwithstanding any other provision of this Agreement, to the extent that any such items incorporate in whole or in part any ACSI

--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission.

                                      -4-

Site Functionality or technology, software, code, user interfaces or look and feel related thereto or incorporated therein, such items shall be deemed ACSI Derivative Works in their entirety and not Joint Works or Company Intellectual Property.

     Incentive Offer means either (a) a discount in the purchase price of Spoken-Word Audio Products offered for sale from or through the Spoken-Word Audio Sub-Section or (b) an equivalent benefit upon purchase of a Spoken-Word Audio Product from or through the Spoken-Word Audio Sub-Section.

     Intellectual Property Right means any patent, copyright, trademark, trade dress, trade name or trade secret right and any other intellectual property or proprietary right.

     Launch Date means the date on which the Parties mutually agree to launch the Spoken-Word Audio Sub-Section, but in any event no later than 90 days after the Effective Date.

     Law means any law, ordinance, rule, regulation, order, license, permit and other requirement, now or hereafter in effect, of any governmental authority of competent jurisdiction.

     Mirror Company Site means a mirrored version of that Web Site, the primary Home Page for which is identified by the URL www.audible.com (and any successor or replacement Web Site).  The primary home page of the Mirror Company Site shall be identified by the URL www.amazon.audible.com (or such other URL as                                     ---------------------- the Parties may agree upon).

     Proration Percentage means, as of any date within the Refund Period, the following quantity, expressed as a percentage: (a) one (1); minus (b) the sum of: (i) the number of days of the Refund Period which have elapsed prior to such date; divided by (ii) the total number of days in the Refund Period.

     Non-Exclusive Spoken-Word Audio Products means spoken-word audio-only products, in a format suitable for digital download and/or streaming (excluding Exclusive Spoken-Word Audio Products and Related Products), [***]

     Receiving Party means a Party that receives Confidential Information from the other Party in connection with this Agreement.

     Referral Information means any information disclosing that a specific end-user traveled from the ACSI Site to the Mirror Company Site or purchased any products through the Spoken-Word Audio Sub-Section (however obtained), or other personally-identifying information regarding users of the ACSI Site (including the Spoken-Word Audio Sub-Section).

--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission.

                                      -5-

     Refund Period means the period of time from the date upon which Company makes the payment called for by Section 5.2.1  [Annual Fees] (or is deemed to have made such payment pursuant to Section 5.3  [Waiver of Payment Obligations]) until the end of Year 2.

     Related Products means: [***]

     Site means either the ACSI Site, on the one hand, or the Mirror Company Site and Company Site collectively, on the other hand, as required by the context.

     Spoken-Word Audio Products means, collectively, Exclusive Spoken-Word Audio Products, Related Products and Non-Exclusive Spoken-Word Audio Products.

     Spoken-Word Audio Sub-Section means an ACSI Product Sub-Section, to be created pursuant to this Agreement, featuring Spoken-Word Audio Products (but subject to Section 9.2 with respect to Related Products) and which shall be identified on the ACSI Site by such heading as the Parties may agree upon.

     Term means the term of this Agreement as defined in Section 10.

     Trademark means any trademark, service mark, trade name, trade dress, proprietary logo or insignia or other source or business identifier.

     Web Site means any point of presence maintained on the Internet or on any other public or private data network.  With respect to any Web Site maintained on the World Wide Web or any successor public data network, such Web Site includes all HTML pages (or similar unit of information presented in any relevant data protocol) that either (a) are identified by the same second-level domain (such as http://www.amazon.com) or by the same equivalent level identifier in any relevant address scheme, or (b) contain branding, graphics, navigation or other characteristics such that a user reasonably would conclude that the pages are part of an integrated information or service offering.

     Year means any period of twelve (12) consecutive months commencing on the Effective Date.

Section 2.  Spoken-Word Audio Sub-Section and Mirror Company Site

     2.1  Spoken-Word Audio Sub-Section.  Pursuant to the implementation procedures set forth in Section 4, ACSI will establish and, upon and following the Launch Date, maintain (or cause one of its Affiliates to maintain) on the ACSI Site during the Term

Source: AUDIBLE INC, 10-Q, 11/13/2000





-------- *** Confidential Information has been omitted and has been filed separately with     the Securities and Exchange Commission.

                                      -6-

the Spoken-Word Audio Sub-Section. In order to provide a harmonious and consistent user experience, the presentation, format, functionality and operation of the Spoken-Word Audio Sub-Section shall be generally consistent with that of other similar ACSI Product Sub-Sections (including, without limitation, by incorporating category headings and other navigational aids for specific types of Spoken-Word Audio Products offered by Company), except that ACSI will include prominent branding for Company where appropriate on pages of the Spoken-Word Audio Sub-Section. Subject to the foregoing and to Section 6, ACSI will determine the content, appearance, functionality and all aspects of the ACSI Site (including the Spoken-Word Audio Sub-Section) [***]

     2.2  Certain Company Obligations.  As of and following the Launch Date, Company will (a) maintain the Mirror Company Site, [***], (b) ensure that every page of the Mirror Company Site displays prominent, above-the-fold, graphical hypertext links (to be designed by ACSI and subject to Company's prior approval, which shall not be unreasonably withheld or delayed) which, when clicked, return the user to the ACSI Site, together with such other branding and Trademarks of ACSI as ACSI and Company may agree upon to be appropriate (provided, that if the Parties cannot agree upon such branding and Trademarks, notwithstanding any other provision of this Agreement, ACSI shall have no obligation to establish or maintain the Spoken-Word Audio Sub-Section until such time as the Parties have agreed upon the same; and provided further, that any disagreement shall be subject to the escalation procedure specified in Section 2.8  [Escalation of Certain Disputes] below), (c) ensure that the Mirror Company Site does not contain links to any Web Site other than the ACSI Site (including, without limitation, to the Company Site), (d) ensure that substantially all Spoken-Word Audio Products (and any other products approved by ACSI) available through the Company Site are available through the Spoken-Word Audio Sub-Section (but subject to Section 9.2 with respect to Related Products), (e) [***], and (f) [***].  Subject to the foregoing, Company shall have the right to limit the number of promotional incentives (e.g. free give-aways, low-cost promotional offers and the like) that are offered through the Spoken-Word Audio Sub-Section based upon the volume of traffic if such volume were to place Company in commercially untenable position as solely determined by Company.  Unless otherwise agreed by the Parties in writing, Company will be solely responsible for all pricing, delivery and fulfillment of any products, including Spoken-Word Audio Products offered by Company on or through the Spoken-Word Audio Sub-Section (including the Mirror Company Site).

     2.3  [***].

     2.4  Technical Standards; Customer Service.  Company will at all times comply with the technical and customer service requirements and Site standards (including, without limitation, user privacy policies and customer guarantees) to be agreed upon by the Parties within forty-five (45) days after the Effective Date and attached hereto as Exhibit B.  Any dispute arising related to the creation of such requirements and standards shall be subject to the escalation procedure specified in Section 2.8  [Escalation of Certain Disputes] below.  Without limiting the generality of the foregoing Company will: (a) at all times conduct its dealings with users of the Spoken-Word Audio Sub-Section in a professional and courteous manner which reflects favorably upon ACSI and its Affiliates and the ACSI Site; and (b) in any event ensure that the customer

--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission.

                                      -7-

service provided to users of the Spoken-Word Audio Sub-Section (including, without limitation, in regard to product fulfillment and responsiveness to customer inquiries) is of as high a standard as is commercially reasonably possible and as good or better than that generally provided by any other online seller of Spoken-Word Audio Products in a format suitable for digital download.

     2.5  Referral Information.  Company will not disclose any Referral Information to any third party (except for third parties acting directly on behalf of Company in connection with Company's internal business and who have agreed in writing to maintain the same in confidence), or use or permit any third party to use any Referral Information to target communications specifically to users of the ACSI Site, primarily on the basis of such persons' being users of the ACSI Site, without ACSI's prior written consent (provided, however, that nothing in the foregoing shall prohibit Company from contacting its own customers generally (including contacting users of the ACSI Site as part of any such general contacts) or prohibit Company from using non-personal statistical information regarding such users in the aggregate for any purpose without ACSI's consent).  [***]

     2.6  ACSI Site Re-Design.  Notwithstanding any other provision of this Agreement, nothing in this Agreement shall limit ACSI's and its Affiliates' ability to re-design or modify the appearance, content and functionality of the ACSI Site (including any ACSI Product Section, ACSI Product Sub-Section, or any Home Pages); provided, however, that in the event that ACSI and/or its Affiliates redesign or revise the ACSI Site or any ACSI Product Section, the treatment of the Spoken-Word Audio Sub-Section in connection with such re-design or revision will be substantially similar to and consistent with the treatment of other ACSI Product Sub-Sections on the ACSI Site.

     2.7  Traffic Data.  Throughout the Term, on a monthly basis, Company will provide ACSI all relevant data requested from time to time by ACSI concerning behavior on the Mirror Company Site, to the extent such behavior reasonably relates to the online promotion or sale of products sold through the ACSI Site and/or Mirror Company Site and such data is reasonably available.  ACSI and its Affiliates will hold such data in confidence and will not use it except in connection with their marketing efforts or as otherwise may be  agreed by Company in writing.  Notwithstanding anything contained in this Section 2.7  [Traffic Data], Company will not be required to deliver to ACSI any user data in contravention of any applicable Law or Company's privacy policy (provided, that if Company modifies its privacy policy, Company shall revise the same in a manner which provides it the maximum legally permissible flexibility to provide the data

Source: AUDIBLE INC, 10-Q, 11/13/2000





specified in this Section 2.7  [Traffic Data] to ACSI).

     2.8  Escalation of Certain Disputes.  If any dispute arises relating to the matters described in Section 2.2(b)  [Certain Company Obligations], Section 2.4  [Technical Standards; Customer Service] or Section 4.1.3 of this Agreement, and the Parties are unable to resolve the dispute in the ordinary course of business, the Parties will use good-faith efforts to resolve the matter in accordance with this Section 2.8  [Escalation of Certain Disputes].  Within three (3) days

--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission.

                                      -8-

following the written request of either Party (which will describe the nature of the dispute and other relevant information), the Parties' managers who are responsible for the ACSI/Company relationship will meet to resolve the dispute at a mutually convenient time and place.  If the relationship managers are unable to resolve the dispute within two (2) days following their initial meeting, they will refer the matter to the Parties' divisional executives who are responsible for the administration of this Agreement, along with a written statement (or statements) describing the nature of the dispute and other relevant information.  Within three (3) days following the referral of the matter to the Parties' divisional executives, the divisional executives will meet to resolve the dispute at a mutually convenient time and place.  Additional representatives of the Parties (but not their relationship managers) may be present at the meeting.  If the divisional executives are unable to resolve the dispute within two (2) days following their initial meeting, they will refer the matter to the Parties' Presidents, along with a written statement (or statements) describing the nature of the dispute and other relevant information. Within three (3) days following the referral of the matter to the Parties' Presidents (or equivalent officers), the Presidents will meet to resolve the dispute at a mutually convenient time and place.  Additional representatives of the Parties (but not their relationship managers or divisional executives) may be present at the meeting.  If the Presidents are unable to resolve the dispute within two (2) days following their initial meeting (or such later date as they may agree), the Parties will be free to exercise such rights and remedies as may be available to them at law or in equity. Any resolution of any dispute reached under this Section 2.8  [Escalation of Certain Disputes] will be reduced to writing and signed by the Parties. During any dispute resolution procedure conducted under this Section, the Parties will diligently perform all obligations hereunder that are not directly related to the dispute.

Section 3.  Promotional Activities

     3.1    Press Releases. The Parties will issue a joint press release promptly upon concluding Advertising. this Agreement, which press release shall be subject to the Party's mutual approval, which shall in any event state that Company is the exclusive provider on the ACSI Site of premium spoken-word audio product for download or streaming over the world wide web. The Parties shall have the right to issue mutually agreeable additional press releases describing the nature of their relationship at such times as the Parties shall mutually agree. Neither Party will issue any other press releases, make any other disclosures regarding this Agreement or its terms or the relationship between the Parties, or use the other Party's Trademarks (except as permitted by Section 6), without the other Party's prior written consent, except that, each Party may, without the other Party's prior consent: (y) distribute or issue public relations materials or press releases that contain a description of the relationship between the Parties, provided that such description has been approved in advance by such other Party (which approval shall not be unreasonably withheld or delayed); and (z) speak in public regarding disclosures made pursuant to the first sentence of this Section 3.1  [Press Releases]. Parties will be able to include a description of this strategic partnership in the company descriptor section of standard releases, subject to initial mutual approvals.

                                      -9-

3.2  Advertising

     3.2.1  Amazon.com Customer Base.   During each Year of the Term following the Launch Date, ACSI (or one of its Affiliates) will deliver Amazon.com-branded e-mails and Amazon.com-branded in-product advertising materials related to the Spoken-Word Audio Sub-Section to selected members of the Amazon.com customer base in at least the following quantities:

---------------------------------------------------------------------------------------------             Year                           Email                      Product Shipment -----------------------------    --------------------------    ------------------------------ ---------------------------------------------------------------------------------------------                                                                        1                            [***]                            [***] ---------------------------------------------------------------------------------------------              2                            [***]                            [***] ---------------------------------------------------------------------------------------------              3                            [***]                            [***] ---------------------------------------------------------------------------------------------

     The Parties shall mutually agree on the nature of such advertising; [***]. With respect to all email advertising, ASCI and Company shall pre-test and plan such advertising in a manner generally consistent with the pre-testing and planning conducted by ACSI and its Affiliates with respect to advertising for other ACSI Product Sub-Sections, with the goal of achieving maximum commercial effectiveness for such advertisements (including, without limitation, by attempting to spread out such advertising in order to not unnecessarily bunch the same).  [***]

     3.2.2  Customer Subscription Emails.   [***]

     3.2.3  Company.  [***]

     3.3    Certain Covenants.  [***]

Source: AUDIBLE INC, 10-Q, 11/13/2000





Section 4.  Implementation

     4.1    Spoken-Word Audio Sub-Section and Mirror Company Site.

            4.1.1  Generally. During the Term, the Parties will cooperate in good faith and use commercially reasonable efforts to provide a seamless customer experience of full interactivity between the Spoken-Word Audio Sub- Section and the Mirror Company Site. The Parties anticipate that the activities contemplated by this Section 4.1.1  [Generally] will be performed in two phases, as set forth in Section 4.1.2  [Implementation] and Section 4.1.3  [Phase II] below.

            4.1.2  Phase I.  Between the Effective Date and the Launch Date, the Parties shall perform such work as may be necessary to develop the Spoken-Word Audio Sub-Section (in the case of ACSI) and the Mirror Company Site (in the case of Company).  Upon the Launch Date, ACSI will establish the Spoken-Word Audio Sub-Section under the browse tree (or equivalent navigation structure) of the Books Product Section, and Company will establish the Mirror Site.  The Spoken- Word Audio Sub-Section will contain, among such

--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission.

                                     -10-

other content as may be contained therein pursuant to Section 2.1  [Spoken-Word Audio Sub-Section], multiple hypertext links that will allow users to navigate directly to the Mirror Company Site.

          4.1.3  Phase II. [***], the Parties shall have fully integrated the ACSI Site Functionality into the Mirror Company Site pursuant to specifications and schedules (the Phase II Development Plan) that shall be developed by ACSI in consultation with Company, which specification and schedules shall be attached hereto as Exhibit C, [***].  Any dispute arising related to the creation of the Phase II Development Plan shall be subject to the escalation procedure specified in Section 2.8  [Escalation of Certain Disputes].Without limiting the generality of the foregoing, ACSI and Company will cooperate to implement ACSI Site Functionality for the Spoken-Word Audio Sub-Section (including the Mirror Company Site) in a manner consistent with the ACSI Site Functionality provided in other ACSI Product Sub-Sections, and Company and ACSI will use commercially reasonable efforts to perform, in a timely and professional manner, all technical work necessary to seamlessly integrate the ACSI Site Functionality into the Mirror Company Site, in accordance with the Phase II Development Plan.

          4.1.4  Tax Matters.  [***]

     4.2  ACSI Site Links.  Upon the Launch Date, ACSI will post permanent and/or rotating links to the Home Page of the Spoken-Word Audio Sub-Section on relevant pages of the ACSI Site in a manner substantially similar to and generally consistent with the posting of links to other similar ACSI Product Sub-Sections (e.g., as of the Effective Date, the ACSI Product Sub-Section identified as Audiobooks).  [***]

     The Parties shall consult together in connection with the specific nature, prominence and positioning of the links posted on the ACSI Site pursuant to this Section 4.2  [ACSI Site Links]; [***].

     4.3  Account Managers.  Each Party will assign an account manager (which manager shall be subject to change from time to time by the assigning Party) to oversee the performance of such Party's obligations under this Agreement and to facilitate coordination of the Parties' performance of their respective obligations (including, without limitation, the establishment of the Spoken-Word Audio Sub-Section, the creation of the Co-Branded Pages, the integration of the ACSI Site Functionality with the Mirror Company Site, and the advertising activities contemplated in Section 3).  The account managers will meet from time to time during the Term to review the implementation of this Agreement and to explore methods for improving performance.

     4.4  Regulatory Compliance

          4.4.1  Company will comply, and will ensure that the Mirror Company Site, the Spoken-Word Audio Products and all other activities undertaken through or in connection with the Mirror Company Site and this Agreement (including, without limitation, the participation of ACSI and its Affiliates as contemplated by this Agreement) comply with all applicable Laws.

--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission.                                      -11-

          4.4.2  Company will provide reasonable assistance to ACSI and ACSI's Affiliates in all regulatory compliance activities required in connection with the advertising, operation, maintenance and sale of Spoken-Word Audio Products on and through the Spoken-Word Audio Sub-Section, including, but not necessarily limited to, assisting ACSI in identifying, obtaining and maintaining in force any and all licenses and permits necessary for ACSI and its Affiliates in connection with any of the foregoing.  In connection with the foregoing regulatory compliance activities, Company will reimburse ACSI for any reasonable costs (including legal costs) incurred by ACSI or its Affiliates in connection with identifying and obtaining any and all such licenses and permits. Notwithstanding the foregoing, ACSI acknowledges and agrees that Company shall have no obligation to assist ACSI in any regulatory compliance activities related to, or reimburse ACSI for any costs incurred by ACSI or its Affiliates in connection with identifying or obtaining any licenses or permits required in connection with, any advertising, operation, maintenance or sale of Spoken-Word Audio Products or other products sold by ACSI or its Affiliates independently through the ACSI Site without the participation of Company.

       4.5  Staffing. Each Party will dedicate during the Term the appropriate resources and personnel necessary for establishment of the Spoken-Word Audio Sub-Section, the integration of the ACSI Site Functionality into the Mirror Company Site and the performance of its other obligations under this Agreement. Each Party's designated employees will be subject to change from time to time by such Party in its sole discretion and promptly upon such change such Party shall

Source: AUDIBLE INC, 10-Q, 11/13/2000





notify the other Party.

Section 5.  Compensation

       5.1  In consideration of the intangible rights granted and services to be performed by ACSI during the Term, Company will pay ACSI the consideration specified in this Section.

       5.2  Annual Fees.

            5.2.1  Upon the Closing, subject to Section 5.3  [Waiver of Payment Obligations], Company will pay ACSI via wire transfer the sum of [***] (the Company Closing Payment), representing payment of the Annual Fee for the first Year of the Term and a pre- payment of the Annual Fee for the second Year of the Term.

            5.2.2  On the first day of Year 3, Company will pay ACSI via wire transfer the sum of [***], representing the Annual Fee payable with respect to Year 3; provided, however, that if ACSI so elects by written notice delivered to Company at least ten (10) days prior to the end of Year 2, Company shall instead issue at the beginning of Year 3 to ACSI  (or such of its Affiliates as it may designate) shares of common stock of Company (or any publicly-traded Affiliate thereof) with a then-current fair market value equal to [***] as of the date of such written notice (the Year 3 Shares).

     5.3    Waiver of Payment Obligations.  At the Closing, the Company Closing Payments due to ACSI pursuant to Section 5.2.1  [Annual Fees] hereof and the Shares Consideration (as defined in the Securities Purchase Agreement) due to the Company pursuant to Section 1.2 of

--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission.                                      -12-

the Securities Purchase Agreement, which amounts are identical, shall offset each other solely for the purpose of determining the actual fund transfers required at Closing. ASCI acknowledges and agrees that the entire amount of the Company Closing Payments shall be deemed paid and received upon the issuance of the Common Stock (as defined in the Securities Purchase Agreement).

     5.4  Royalties.  In consideration for the intangible rights granted hereunder, for each Year in which the Spoken-Word Audio Sub-Section (including the Mirror Company Site) generates revenue of at [***] (the Revenue Threshold), Company will pay ACSI a royalty equal to [***] of all revenues generated from the Spoken-Word Audio Sub-Section (including, for the avoidance of doubt, any revenue received by Company from any Company customer who first links to the Mirror Company Site from the Spoken-Word Audio Sub-Section and who later accesses the Company Site directly) in excess of Revenue Threshold (the Royalties) for each Year of the Term.  Company will pay ACSI any Royalties payable pursuant to this Section 5.4  [Royalties] on an annual basis, in arrears, as follows: within thirty (30) days after the end of each Year as to which any Royalties are payable, Company will remit to ACSI the Royalties payable with respect to such Year, together with a report specifying in reasonable detail: (a) the gross revenue generated by the Spoken-Word Audio Sub-Section; and (b) Company's calculation of the  Royalties.

     5.5  Overdue Payments.  Payments called for by this Section 5 which are not received within five (5) business days after the date upon which payment is due will bear interest at a rate equal to the lesser of one and one-half percent (1- 1/2%) per month or the maximum legal rate permitted under the controlling Laws. Payment of such interest shall not cure or excuse any breach of any underlying payment obligation.

     5.6  Allocation of Payments.  The Parties acknowledge and agree that the Annual Fees shall be allocated as consideration for advertising services and intangible rights granted by ACSI to Company hereunder, including the rights granted under Section 2.1  [Spoken-Word Audio Sub-Section] and Section 4.2  [ACSI Site Links] and the licenses granted to Company under Section 6, as follows:

             Year                    Advertising Services             Intangible Rights ----------------------------------------------------------------------------------------------                                                                               1                             [***]                           [***] ----------------------------------------------------------------------------------------------               2                             [***]                           [***] ----------------------------------------------------------------------------------------------               3                             [***]                           [***] ----------------------------------------------------------------------------------------------

--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission.

                                     -13-

Section 6.  Proprietary Rights

      6.1   Ownership.

            6.1.1  As between the Parties, ACSI reserves all right, title and interest in and to the ACSI Intellectual Property, along with all Intellectual Property Rights associated therewith and no title to or ownership of any of the foregoing is transferred or, except as expressly set forth in Section 6.2  [ACSI License], licensed to Company or any other person or entity pursuant to this Agreement.

            6.1.2  As between the Parties, Company reserves all right, title and interest in and to the Company Intellectual Property, along with all Intellectual Property Rights associated therewith and no title to or ownership of any of the foregoing is transferred or, except as expressly set forth in Section 6.3  [Company License], licensed to ACSI or any other person or entity pursuant to this Agreement.

Source: AUDIBLE INC, 10-Q, 11/13/2000





            6.1.3  To the maximum extent permitted by applicable Laws, any ACSI Derivative Works or Company Derivative Works, to the extent created by or for the other Party, shall be deemed works made for hire, and all right, title and interest therein shall vest in ACSI (in the case of ACSI Derivative Works) or Company (in the case of Company Derivative Works) immediately upon creation thereof. To the extent that any such ACSI Derivative Works or Company Derivative Works are not works made for hire, Company hereby assigns and agrees to assign to ACSI (or such of its Affiliates as it may designate) all right, title and interest to all ACSI Derivative Works and all associated Intellectual Property Rights, and ACSI hereby assigns and agrees to assign to Company (or such of its Affiliates as it may designate) all right, title and interest in and to all Company Derivative Works and all associated Intellectual Property Rights. Each Party shall take, at the other Party's expense, any actions (including, without limitation, execution and delivery of affidavits and other documents) reasonably requested by such other Party to effect, perfect or confirm its or its designee's ownership rights as set forth in this Section 6.1.3  [Ownership].

            6.1.4  To the extent that any Joint Works are created in the course of performance of this Agreement, each Party shall own a joint, equal and undivided ownership interest in and to such Joint Works and the associated Intellectual Property Rights, with no duty on the part of either Party to account to the other with respect to its use and exploitation of the same. Each Party shall own all right, title and interest in and to any Derivative Works of any Joint Works created by or for such Party and all Intellectual Property Rights associated therewith (to the extent not also associated with the Joint Works). Without limiting the generality of the foregoing, either Party may, without any duty to account to the other (including, without limitation, any duty to pay, share or account for any royalties):

          (a) make, manufacture, assemble, produce, market, sell, distribute,      transfer, use, license and otherwise commercially and non-commercially      exploit and deal with the Joint Works; provided, that neither Party shall      seek or obtain any

                                     -14-

     registration of any Intellectual Property Rights associated with the Joint      Works without the other Party's prior written consent;

          (b) make, manufacture, assemble, produce, market, sell, distribute,      transfer, use, license, seek and obtain registrations of Intellectual      Property Rights (subject to paragraph (a) above) and otherwise commercially      and non-commercially exploit and deal with Derivative Works of any Joint      Works created by or for such Party, whether or not competitive with any      items created by or for the other Party; and

          (c) authorize any third party to take any action described in (a) or      (b) above.

     6.2  ACSI License.  ACSI hereby grants to Company, during the Term, a non- exclusive, non-transferable (except in accordance with Section 11.7  [Assignment]) license, which Company may sublicense only to its Affiliates, to use the ACSI Intellectual Property supplied by ACSI to Company as is reasonably necessary to perform its obligations under this Agreement; provided, however, that Company shall not use ACSI's Trademarks, including in any advertising, without ACSI's prior written consent, unless such use conforms to a written Trademark use policy previously furnished by ACSI to Company and not subsequently modified or revoked.  All goodwill arising out of any use of any of ACSI's or its Affiliates' Trademarks by, through or under Company will inure solely to the benefit of ACSI and its Affiliates.

     6.3  Company License.  Company hereby grants to ACSI, during the Term, a non-exclusive, non-transferable (except in accordance with Section 11.7  [Assignment]) license, which ACSI may sublicense only to its Affiliates, to use the Company Intellectual Property supplied by Company to ACSI as is reasonably necessary to perform its obligations under this Agreement; provided, however, that ACSI shall not use Company's Trademarks, including in any advertising, without Company's prior written consent, unless such use conforms to a written Trademark use policy previously furnished by Company to ACSI and not subsequently modified or revoked.  All goodwill arising out of any use of any of Company's Trademarks by, through or under ACSI will inure solely to the benefit of Company.

     6.4  Non-Disparagement.  Neither Company nor ACSI will use the other Party's Trademarks in a manner that disparages the other Party or its products or services, and/or portrays the other Party or its products or services in a false, competitively adverse or poor light.  Each of Company and ACSI will comply with the other Party's requests as to the use of the other Party's Trademarks and will avoid knowingly taking any action that diminishes the value of such Trademarks.

Section 7.  Representations; Indemnity

     7.1  Representations.  Each Party represents and warrants to the other that: (a) it has the full corporate right, power and authority to enter into this Agreement and perform its obligations hereunder; (b) its performance of this Agreement, and the other Party's exercise of such other Party's rights under this Agreement, will not conflict with or result in a breach

                                     -15-

or violation of any of the terms or provisions or constitute a default under any agreement by which it is bound; (c) when executed and delivered, this Agreement will constitute its legal, valid and binding obligation enforceable against it in accordance with its terms; and (d) it will comply with all applicable Laws in its performance of this Agreement.

     7.2  Indemnity.  Each Party (as applicable, the Indemnifying Party) will defend, indemnify and hold harmless the other Party (the Indemnified Party) and its Affiliates (and their respective employees, directors and representatives) from and against any and all claims, costs, losses, damages, judgments and expenses (including reasonable attorneys' fees) arising out of any Claim, to the extent it is based on (a) the operation or content of the Indemnifying Party's Site (other than any items or materials supplied, or operation or content required, by the Indemnified Party), (b) the offer, marketing or sale of any products or services through the Indemnifying Party's Site (other than any products offered, marketed or sold by the Indemnified Party

Source: AUDIBLE INC, 10-Q, 11/13/2000





through such Site, the Parties acknowledging that Company shall be deemed the Indemnifying Party as to any Claim related to any products offered, marketed or sold by Company through the Spoken-Word Audio Sub-Section and/or Mirror Company Site, except to the extent that such Claim relates to any ACSI Site Functionality or other items or content provided by or for ACSI with respect to the Spoken-Word Audio Sub-Section and/or Mirror Company Site), (c) any actual or alleged breach of the Indemnifying Party's representations or warranties set forth in Section 7.1  [Representations] above, or, in the case of Company, its obligations under Section 4.4  [Regulatory Compliance]  above, or (d) any actual or alleged infringement of any Intellectual Property Rights by any content, items or materials provided by the Indemnifying Party to the Indemnified Party for its use under this Agreement. Subject to Section 7.3  [Procedure], the Indemnifying Party will pay any award against the Indemnified Party and its Affiliates (and their respective employees, directors or representatives) and any costs and attorneys' fees reasonably incurred by them resulting from any such Claim.

     7.3  Procedure.  In connection with any Claim described in this Section 7, the Indemnified Party will (a) give the Indemnifying Party prompt written notice of the Claim, (b) cooperate with the Indemnifying Party (at the Indemnifying Party's expense) in connection with the defense and settlement of the Claim, and (c) permit the Indemnifying Party to control the defense and settlement of the Claim, provided that the Indemnifying Party may not settle the Claim without the Indemnified Party's prior written consent (which will not be unreasonably withheld).  Further, the Indemnified Party (at its cost) may participate in the defense and settlement of the Claim with counsel of its own choosing.  Unless the Indemnifying Party notifies the Indemnified Party in writing within five (5) days of its receipt of notice of any Claim that it irrevocably elects not to assume the defense of such Claim, the Indemnifying Party shall be deemed to have elected to assume the defense of such Claim.  If the Indemnifying Party elects not to assume the defense of any Claim, or having assumed the defense of any Claim fails to pursue diligently the defense thereof, the Indemnifying Party shall be deemed to have irrevocably waived any right to participate in or control the defense or settlement of such Claim and the Indemnified Party shall be entitled to sole control of the defense and settlement of such Claim (without limitation of the Indemnifying Party's indemnity obligations under this Section 7).

                                     -16-

Section 8.  Disclaimers, Limitations and Reservations

     8.1  DISCLAIMER OF WARRANTIES.  EXCEPT AS PROVIDED IN SECTION 7.1  [Representations] ABOVE, NEITHER PARTY MAKES, AND EACH PARTY HEREBY WAIVES AND DISCLAIMS, ANY REPRESENTATIONS OR WARRANTIES REGARDING THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING (WITHOUT LIMITATION) ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT OR IMPLIED WARRANTIES ARISING OUT OF COURSE OF DEALING, COURSE OF PERFORMANCE OR USAGE OF TRADE.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH PARTY SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY REGARDING (A) THE AMOUNT OF SALES REVENUES THAT MAY OCCUR DURING THE TERM, AND (B) ANY ECONOMIC OR OTHER BENEFIT THAT THEY MIGHT OBTAIN THROUGH ITS PARTICIPATION IN THIS AGREEMENT (OTHER THAN THE SPECIFIC SUMS TO BE PAID PURSUANT TO THIS AGREEMENT).

     8.2  No Consequential Damages.  EXCEPT TO THE EXTENT AWARDED TO A THIRD PARTY IN A JUDGMENT AGAINST WHICH A PARTY IS ENTITLED TO INDEMNIFICATION PURSUANT TO SECTION 7.2  [Indemnity], OR TO THE EXTENT ARISING OUT OF ANY BREACH OF SECTION 11.4  [Nondisclosure], NEITHER PARTY WILL BE LIABLE (WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE), PRODUCT LIABILITY OR OTHER THEORY), TO THE OTHER PARTY OR ANY OTHER PERSON OR ENTITY FOR COST OF COVER OR FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION DAMAGES FOR LOSS OF PROFIT, REVENUE, BUSINESS OR DATA) ARISING OUT OF THIS AGREEMENT, EVEN IF SUCH PARTY HAS BEEN ADVISEDOF THE POSSIBILITY OF SUCH COSTS OR DAMAGES.  FOR THE AVOIDANCE OF DOUBT, THE PARTIES HEREBY ACKNOWLEDGE AND AGREE THAT NOTHING IN THIS SECTION 8.2  [No Consequential Damages] IS INTENDED TO LIMIT ANY RIGHT OF ACSI TO RECEIVE LIQUIDATED DAMAGES AS SET FORTH IN SECTION 10.5.2  [Effect of Termination].

     8.3  Limitation of Damages. EXCEPT FOR LIABILITIES UNDER SECTION 7.2  [Indemnity], NEITHER PARTY'S AGGREGATE LIABILITY ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE), WARRANTY OR OTHERWISE, SHALL EXCEED [***].

     8.4  Third Party Infringement Claims. In the event that either Party receives from a third party a bona fide claim of infringement concerning any advertising materials or other content supplied by the other Party, such Party may immediately remove such materials

--------- *** Confidential Information has been omitted and has been filed separately with     the Securities and Exchange Commission.

                                     -17-

or content from its Web Site at its sole discretion, pending receipt of non- infringing replacement materials or content or satisfactory resolution of such claim, and any such removal shall not constitute a breach of this Agreement.

Section 9.  Exclusivity.

     9.1    ACSI

            9.1.1 Exclusive Spoken-Word Audio Products. During the Term, [***], ACSI will not offer or sell through the ACSI Site, or authorize any third party to sell through the ACSI Site, any Exclusive Spoken-Word Audio Products; [***].

            9.1.2 [***]

     9.2    [***]

     9.3    [***]

     9.4    Records; Audit. Each Party will, during the Term and for a period of one (1) year thereafter, maintain complete and accurate books and records sufficient to verify its compliance or non-compliance with the provisions of this Section 9 (and, in the case of Company, Section 5.4  [Royalties]). Each Party (the Audited Party') will, upon at least thirty (30) days' prior written request by the other Party (the Auditing Party), allow an independent certified public

Source: AUDIBLE INC, 10-Q, 11/13/2000





accounting firm selected by the Auditing Party and reasonably acceptable to the Audited Party to audit such books and records at the Audited Party's premises to the extent necessary to verify the Audited Party's compliance or non-compliance with the provisions of this Section 9 (or, in the case of Company, Section 5.4  [Royalties]); provided, that: (a) any such audit is conducted during normal business hours and in a manner designed to not unreasonably interfere with the Audited Party's ordinary business operations; (b) audits may not occur more frequently than once every twelve (12) months; and (c) each such audit may only cover the period commencing after the period covered by the last audit conducted pursuant to this Section, if any. The Auditing Party agrees that any information learned or disclosed by its auditor in connection with such audit is Confidential Information of the Audited Party. If any such audit reveals any material non- compliance with the provisions of this Section 9 by the Audited Party, the Audited Party shall, within ten (10) days of its receipt of an invoice therefor, reimburse the Auditing Party for all reasonable out-of-pocket fees and expenses incurred by the Auditing Party in connection with the applicable audit. If any such audit reveals any underpayment of any sums payable pursuant to Section 5.4  [Royalties], Company will promptly remit to ACSI the amount of the underpayment; and, if the amount of such underpayment is five percent (5%) or more for any audited period, Company shall, within ten (10) days of its receipt of an invoice therefor, reimburse ACSI for all reasonable out-of-pocket fees and expenses incurred by ACSI and its Affiliates in connection with the applicable audit together with interest on any underpayment as provided in Section 5.5  [Overdue Payments].

--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission.

                                     -18-

Section 10.  Term and Termination

     10.1    Term.  The term of this Agreement will commence on the Effective Date, and unless earlier terminated as provided elsewhere in this Agreement, will end automatically upon the end of Year 3.

     10.2    Termination for Breach.  Without limiting any other rights or remedies (including, without limitation, any right to seek damages and other monetary relief and ACSI's rights under Section 10.3  [ACSI Termination] or Company's rights under Section 10.4  [Company Termination]) that either Party may have in law or otherwise, either Party may terminate this Agreement if the other Party materially breaches its obligations hereunder, provided that, except as provided in Section 10.3  [ACSI Termination] and 10.4  [Company Termination], (a) the non-breaching Party sends written notice to the breaching Party describing the breach, and (b) the breaching Party does not cure the breach within thirty (30) days following its receipt of such notice; provided further, however, that without limitation of ACSI's rights under Section 10.3  [ACSI Termination] if the conditions set forth in that Section are satisfied, in the event of any failure by Company to comply with the customer service requirements specified in Section 2.4  [Technical Standards; Customer Service] and Exhibit B, ACSI shall only be entitled to terminate this Agreement by reason of such failure if it is material, ACSI has notified Company of such non-compliance and Company has not come into compliance with such requirements within sixty (60) days from the date of the non-breaching Party's notice.

     10.3    ACSI Termination. In the event that: (a) Company at any time engages in any criminal conduct, fraud, dishonesty or other behavior that is materially harming the goodwill or reputation of ACSI or its Affiliates or the ACSI Site; (b) Company has consistently failed to abide by the technical and customer service requirements described in Section 2.4  [Technical Standards; Customer Service] or has failed to integrate the ACSI Site Functionality into the Spoken-Word Audio Sub-Section and/or Mirror Company Site as required by the Phase II Development Plan (so long as such failure is not a result of acts or omissions by ACSI); or (c) Company consistently fails to pay bona fide debts as they legally come due, institutes or has instituted against it any bankruptcy, reorganization, debt arrangement, assignment for the benefit of creditors, or other proceeding under any bankruptcy or insolvency Law or dissolution, receivership, or liquidation proceeding (and, if such proceeding is instituted against it, such proceeding is not dismissed within one hundred twenty (120) days), the same shall be deemed a material breach of this Agreement which is not susceptible to cure, and ACSI shall be entitled to terminate this Agreement upon written notice to Company. [***]

     10.4    Company Termination.  In the event that (a) ACSI has failed to integrate the ACSI Site Functionality into the Spoken-Word Audio Sub-Section and/or Mirror Company Site as required by the Phase II Development Plan (so long as such failure is not a result of acts or omissions by Company); or (b) ACSI consistently fails to pay its bona fide debts as they legally come due, institutes or has instituted against it any bankruptcy, reorganization, debt arrangement, assignment for the benefit of creditors, or other proceeding under any bankruptcy or insolvency Law or dissolution, receivership, or liquidation proceeding (and, if such proceeding is instituted against it, such proceeding is not dismissed within one hundred twenty (120) days), the same shall be deemed a material breach of this Agreement which is

--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission.

                                     -19-

not susceptible to cure, and Company shall be entitled to terminate this Agreement upon written notice to ACSI.

     10.5  Effect of Termination.

           10.5.1  General.  Upon termination of this Agreement, each Party in receipt, possession or control of the other Party's intellectual or proprietary property, information and materials (including any Confidential Information) pursuant to this Agreement must return to the other Party (or at the other Party's written request, destroy and certify in writing such destruction) such property, information and materials.  In addition, except as provided in Section 10.5.2  [Effect of Termination], Company will promptly upon any termination of this Agreement pay to ACSI a prorated portion of the Annual Fee due for the Year in which termination is effective; provided, however, that if Company terminates this Agreement by reason of ACSI's breach hereof, Company shall have no further payment obligation, and, if such termination occurs at any time during the Refund

Source: AUDIBLE INC, 10-Q, 11/13/2000





Period, ACSI shall promptly either (a) refund to Company a percentage of the Annual Fees paid pursuant to Section 5.2.1  [Annual Fees] equal to the Proration Percentage, or, at ACSI's option, (b) cause the transfer and assignment to Company of a percentage of the Shares delivered pursuant to Section 5.3  [Waiver of Payment Obligations] equal to the Proration Percentage.  Sections 6 through 8, 10 and 11 will survive the termination or expiration of this Agreement.

           10.5.2  [***]

           10.5.3  Construction by Court.  To the extent that any court of competent jurisdiction determines that any provision of Section 10.5.2  [Effect of Termination] is for any reason unlawful, invalid, in violation of public policy or otherwise unenforceable in whole or in part, such provision shall be narrowed in scope to the extent necessary to make the same lawful, valid and enforceable while as nearly as possible reflecting the intent of the Parties as expressed in this Agreement.

           10.5.4  User Transition.  Upon any termination or expiration of the Term the Parties will cooperate in good faith to promote a smooth customer transition, and in any event, Company will, at ACSI's option, continue to operate the Mirror Company Site and offer Spoken-Word Audio Products through the Spoken-Word Audio Sub-Section in accordance with the terms of this Agreement for a period of up to six (6) months following such termination.

           10.5.5  Phase II Development Plan.  Notwithstanding any other provision of this Agreement, the Parties acknowledge and agree that no failure by the Parties to develop the Phase II Development Plan as contemplated by Section 4.1.3  [Phase II] shall be deemed, in itself, a breach of this Agreement by either Party (and therefore that such occurrence shall not, in itself, give rise to any of the remedies specified in Section 10.5.1  [General] or Section 10.5.2  [Effect of Termination]).

--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission.

                                     -20-

Section  11.  Miscellaneous

      11.1    Tax Treatment.

              11.1.1  The Parties acknowledge and agree that this Agreement and the transactions contemplated hereby are not intended to create any jurisdiction or authority for any governmental authority to impose any obligation to collect any sales tax, use tax or similar tax in connection with any sales of products by either Party or its Affiliates. Accordingly, each Party agrees to take such action as the other Party may reasonably request (including, without limitation, execution of affidavits and other documents) to avoid or curtail the imposition, by reason of this Agreement or the transactions contemplated hereby, of any such obligation on such Party or its Affiliates, or the establishment of a nexus for tax purposes sufficient to grant any jurisdiction the authority to levy any sales tax, use tax or similar tax on sales of products by such Party or its Affiliates in connection with this Agreement; provided, however, that nothing in this Section 11.1.1  [Tax Treatment] shall limit Company's obligations under Section 11.1.2  [Tax Treatment].

              11.1.2  Company will collect and pay, and indemnify and hold harmless ACSI and its Affiliates from, any sales, use, excise, import or export, value added or similar tax or duty not based on ACSI's or its Affiliates' net income, including penalties and interest, costs associated with the collection and withholding thereof and attorneys fees in connection therewith, arising out of or in connection with this Agreement or Company's advertisement, offer or sale of any products.

     11.2     Insurance.  Company will at its expense, prior to the Launch Date obtain, and thereafter throughout the Term and for a period of six (6) months thereafter maintain, such policy or policies of insurance as is commercially reasonable for the transactions and business contemplated by this Agreement. Without limiting the generality of the foregoing, Company will ensure that such policies contain a waiver of subrogation against ACSI, name ACSI and its assignees as additional insureds.  Company will not modify or terminate any coverage without giving at least thirty (30) days' prior written notice to ACSI. Upon request from ACSI, Company will furnish to ACSI certificates of insurance and such other documentation relating to such policies as ACSI may reasonably request.

     11.3     Independent Contractors. The Parties are entering this Agreement as independent contractors, and this Agreement will not be construed to create a partnership, joint venture or employment relationship between them. Neither Party will represent itself to be an employee or agent of the other or enter into any agreement or legally binding commitment or statement on the other's behalf of or in the other's name.

     11.4     Nondisclosure. Each Party will protect the Confidential Information of the other Party from misappropriation and unauthorized use or disclosure, and at a minimum, will take precautions at least as great as those taken to protect its own confidential information of a similar nature, but in no event with less than reasonable care. Without limiting the foregoing, the Receiving Party will: (a) use such Confidential Information solely for the purposes for which it has been disclosed; and (b) disclose such Confidential

                                     -21-

Information only to those of its and its Affiliates' employees, agents, and consultants who have a need to know the same for the purpose of performing this Agreement and who are informed of and agree to a duty of nondisclosure. The Receiving Party may also disclose Confidential Information of the Disclosing Party to the extent necessary to comply with applicable Law or legal process or pursuant to a registration report or exhibits thereto filed or to be filed with the Securities and Exchange Commission, listing agency or any stock securities commission, or any other associated filings, provided that the Receiving Party uses gives the Disclosing Party not less than ten (10) days' prior written notice thereof and complies with all reasonable requests of the Disclosing Party to minimize the extent or scope of any such disclosure. Upon request of the other Party, or in any event upon any termination or expiration of the Term, each Party shall return to the other or destroy (and certify in writing such destruction) all materials, in any medium, which contain, embody, reflect or

Source: AUDIBLE INC, 10-Q, 11/13/2000





reference all or any part of any Confidential Information of the other Party.

     11.5     Costs.  Except as expressly provided herein, each Party will be responsible for all costs and expenses incurred by it in connection with the negotiation, execution, delivery and performance of this Agreement.

     11.6     Notices.  Any notice or other communication under this Agreement given by either Party to the other Party will be in writing and, to be effective, must be sent to the intended recipient by prepaid registered letter, receipted commercial courier, or electronically receipted facsimile transmission (acknowledged in like manner by the intended recipient) at its address specified below its signature at the end of this Agreement, and in the case of ACSI, with a copy to Amazon.com, Inc., 1200 12th Avenue South, Suite 1200, Seattle, WA 98144, USA, Facsimile: (206) 266-7010 Attn: General Counsel and in the case of Company, with a copy to Audible Inc., Facsimile 973-890-0178, Attn: Vice President, Business & Legal Affairs; provided, that no notice of  termination of this Agreement shall be deemed properly given unless sent by prepaid registered mail to such address(es) and to the attention of such officer(s).  Either Party may from time to time change such address or individual by giving the other Party notice of such change in accordance with this Section 11.6  [Notices].

     11.7     Assignment. Company may not assign or delegate this Agreement or any of its rights or obligations hereunder, whether voluntarily, involuntarily, by operation of Law or otherwise, without ACSI's prior written consent, which consent shall not be unreasonably withheld or delayed, except that Company may assign this Agreement to any direct or indirect wholly owned subsidiary in connection with any corporate reorganization undertaken for the purpose of minimizing the tax liability of Company and its Affiliates or other bona fide corporate purpose or in connection with any Change of Control [***]. Subject to the preceding two sentences, this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their successors and assigns. ACSI may assign this Agreement to (a) any corporation or other entity resulting from any merger, consolidation, or other reorganization involving ACSI, (b) any of its Affiliates, or (c) any person or entity to which it transfers all or

--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission.

                                     -22-

substantially all of its assets relating to the Spoken-Word Audio Sub-Section; provided that the assignee agrees in writing to be bound by all the terms and conditions of this Agreement.  Subject to the foregoing, this Agreement will be binding on and enforceable by the Parties and their respective successors and permitted assigns.

     11.8     Nonwaiver.  To be effective, any waiver by a Party of any of its rights or the other Party's obligations under this Agreement must be made in a writing signed by the Party to be charged with the waiver.  No failure or forbearance by either Party to insist upon or enforce performance by the other Party of any of the provisions of this Agreement or to exercise any rights or remedies under this Agreement or otherwise at law or in equity shall be construed as a waiver or relinquishment to any extent of such Party's right to assert or rely upon any such provision, right, or remedy in that or any other instance; rather the same shall be and remain in full force and effect.

     11.9     Counterparts; Transmitted Copies. This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which taken together will constitute one and the same instrument. To expedite the process of entering into this Agreement, the Parties acknowledge that Transmitted Copies of the Agreement shall be equivalent to original documents until such time (if any) as original documents are completely executed and delivered. Transmitted Copies shall mean copies which are reproduced or transmitted via facsimile, or another process of complete and accurate reproduction and transmission.

     11.10    Headings.  The headings of sections and subsections of this Agreement are for convenience of reference only and are not intended to restrict, affect or otherwise influence the interpretation or construction of any provision of this Agreement.

     11.11    Choice of Law.  This Agreement will be interpreted, construed and enforced in accordance with the Laws of the State of Washington, without reference to its choice of Laws rules.

     11.12    Venue.  Company hereby irrevocably consents to non-exclusive personal jurisdiction and venue in the state and federal courts located in King County, Washington, with respect to any claim, action or proceeding arising out of or related to this Agreement and agrees not to commence or prosecute any such claim, action or proceeding other than in the aforementioned courts.

     11.13    Entire Agreement.  This Agreement (a) represents the entire agreement between the Parties with respect to the subject matter hereof and supersedes any previous or contemporaneous oral or written agreements regarding such subject matter and (b) may be amended or modified only by a written instrument signed by a duly authorized agent of each Party.  No breach of this Agreement by either Party shall affect the rights or obligations of either Party under any other Agreement between the Parties; rather, the same will remain in full force and effect.

                                     -23-

ACSI                                     Company: ----                                     --------

Amazon.com Commerce Services, Inc.       Audible Inc.

 /s/                                      /s/ Don Katz ----------------------------------       -------------------------------------- By (Sign)                                By (Sign)

Vice President                           Founder, Chairman, Acting CEO ----------------------------------       -------------------------------------- Title                                    Title

Source: AUDIBLE INC, 10-Q, 11/13/2000





1/30/2000                                1/30/2000 ----------------------------------       -------------------------------------- Date                                     Date

Notice Address:                          Notice Address:

[***]                                    [***]

--------------- ***Confidential Information has been omitted and has been filed separately with the Securities and Exchange Commission.

                                     -24-

Source: AUDIBLE INC, 10-Q, 11/13/2000 
Question: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?

SOLUTION: Company will not modify or terminate any coverage without giving at least thirty (30) days' prior written notice to ACSI.

PROBLEM: Exhibit 10.19

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM IF PUBLICLY DISCLOSED.

SUPPLY AGREEMENT

This SUPPLY AGREEMENT (Supply Agreement) is made as of May 29, 2018 (the Effective Date) by and between SutroVax, Inc., a Delaware corporation having principal offices at 353 Hatch Dr., Foster City, CA 94404 (SutroVax) and Sutro Biopharma, Inc., a Delaware corporation, having principal offices at 310 Utah Ave, Suite 150, South San Francisco, CA, 94080 (Sutro). SutroVax and Sutro may be referred to herein by name or individually, as a Party and collectively, as the Parties.

BACKGROUND

A. Sutro controls certain proprietary technology which permits cell-free expression of proteins, and Sutro licensed such technology to SutroVax under that certain Amended and Restated SutroVax Agreement dated as of October 12, 2015 (the License Agreement).

B. SutroVax is a vaccine company primarily in the business of developing, manufacturing and marketing vaccine products; and

C. SutroVax desires to purchase from Sutro, and Sutro desires to supply to SutroVax, the Extracts and Custom Reagents (as defined below) upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the covenants, conditions and undertakings hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

AGREEMENT

ARTICLE 1

DEFINITIONS/ INTERPRETATION

For the purposes of this Supply Agreement, the following capitalized words and phrases shall have the following meanings:

1.1 Affiliate means, with respect to either Party, any business entity controlling, controlled by, or under common control with such Party. For the purpose of this definition only, control means (i) the possession, directly or indirectly, of the power to direct the management or policies of a business entity, whether through the ownership of voting securities, by contract or otherwise, or (ii) the ownership, directly or indirectly, of at least fifty percent (50%) of the voting securities or other ownership interest of a business entity. Notwithstanding the above, in no event shall Sutro (or any entity that would be an Affiliate of SutroVax solely because it is an Affiliate of Sutro) be deemed an Affiliate of SutroVax, or SutroVax (or any entity that would be an Affiliate of Sutro solely because it is an Affiliate of SutroVax) an Affiliate of Sutro.





1.2 Applicable Law means all laws, ordinances, rules, rulings, directives and regulations of any Governmental Authority that apply to the development, manufacture or supply of any Product or the other activities contemplated under this Supply Agreement, including (i) all applicable federal, state and local laws, rules and regulations; (ii) the U.S. Federal Food, Drug and Cosmetic Act; (iii) regulations and guidelines of the FDA and other Regulatory Authorities, including cGMPs, if applicable; and (iv) any applicable non-U.S. equivalents of any of the foregoing, including guidelines of the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use (as amended from time to time).

1.3 cGMPs means current good manufacturing practices and standards as set forth (and as amended from time to time) in the current Good Manufacturing Practice Regulations of the U.S. Code of Federal Regulations, including 21 C.F.R. Sections 210 and 211, the European Community Directive 2003/94/EC and the ICH Harmonised Tripartite Guideline, Good Manufacturing Practice Guides for Active Pharmaceutical Ingredients (Q7).

1.4 Components means any product or material used in the Manufacture of the Products including the packaging materials.

1.5 Extract means Sutro's extract derived from strains of E. coli identified on Schedule 1 attached hereto, as may be amended from time to time in accordance with Section 12.7, and any new versions and improvements thereof that may be included in Schedule 1 by written agreement of the Parties in accordance with Section 12.7.

1.6 Facility or Facilities means the facilities where Product will be Manufactured as set forth in Schedule 1. Schedule 1 may be amended from time to time in accordance with this Supply Agreement to add or remove facilities.

1.7 FDA means the United States Food and Drug Administration, or any successor agency thereto performing similar functions.

1.8 Fully Burdened Manufacturing Costs means, with respect to a Product, Sutro's costs of manufacturing such Product, which manufacturing costs shall mean: (a) [***], and (b) [***], in each case to the extent directly allocated to and incurred in the manufacture by Sutro of such Product supplied to SutroVax, its Affiliates and Sublicensees. Fully Burdened Manufacturing Costs shall not include any [***] and shall be calculated in accordance with the foregoing, GAAP and Sutro's policies and procedures for its other products, in each case consistently applied (and such plant operations and support services costs shall be allocated consistent with GAAP and other products of Sutro in that facility).

1.9 Governmental Authority means any court, agency, department, authority or other instrumentality of any nation, state, country, city or other political subdivision, including any Regulatory Authority.





1.10 Manufacture or Manufacturing means the processes and procedures for the supply of the Products, including, (a) the supply and quality control of the Components; (b) the manufacture of the Products in bulk; (c) the Packaging and labeling of the Products; (d) the quality control of the Products; and (e) the storage of the Products until shipment.

1.11 Package or Packaging means packaging Product(s) in accordance with applicable Specifications.

1.12 Person means an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency thereof.

1.13 Price means the price to be paid by SutroVax for each Product as set forth on Schedule 1 of this Supply Agreement and as may be modified from time to time in accordance with Section 3.2.

1.14 Product(s) means the Extract and Custom Reagents.

1.15 Custom Reagents means Sutro's custom reagents identified on Schedule 1 attached hereto, and any new versions and improvements thereof that may be included in Schedule 1 by written agreement of the Parties in accordance with Section 12.7.

1.16 Regulatory Approval means, with respect to a product, all approvals, licenses, registrations or authorizations necessary to market and sell such product in a particular jurisdiction in the Territory (including applicable approvals of labeling, price and reimbursement for such product in such jurisdiction).

1.17 Regulatory Authority means any federal, national, multinational, state, provincial or local regulatory agency, department, bureau or other governmental entity, including the FDA, with authority over the development, Manufacture or commercialization (including approval of Regulatory Approvals) of any Product(s) in any jurisdiction in the Territory.

1.18 Regulatory Materials means regulatory applications, submissions, notifications, communications, correspondence, registrations, Regulatory Approvals and/or other filings made to, received from or otherwise conducted with a Regulatory Authority (including minutes of meeting with Regulatory Authorities) that are necessary or reasonably desirable to access in connection with the development, manufacture, marketing, sale or other commercialization of any Product in a particular country or regulatory jurisdiction. Regulatory Materials include, without limitation, INDs, NDAs, BLAs, clinical trial applications, marketing approval applications and applications for pricing approvals.

1.19 Required Standards means Applicable Law, the Specifications, and the warranties given by Sutro in Section 7.3, provided that Required Standards shall not include compliance with cGMPs for Custom Reagents, Extract identified as research grade Extract or Other Extracts.





1.20 Specifications means, with respect to a Product or applicable Component thereof, all written product, regulatory, Manufacturing, release criterion, quality control and quality assurance procedures, processes, practices, standards, instructions and specifications applicable to the Manufacture of such Product or Component, as agreed to by the Parties in writing from time to time. The initial Specifications for the Products are attached hereto as Schedule 2.

1.21 SutroVax CMO means any contract manufacturer responsible for supplying or manufacturing a Vaccine Composition on behalf of SutroVax or its Affiliates, selected in accordance with Section .2.

1.22 Territory means worldwide.

1.23 Third Party means any Person other than SutroVax, Sutro, or their respective Affiliates.

1.24 Additional Definitions. Each of the following terms shall have the meaning described in the corresponding Section of this Supply Agreement indicated below:

1.25 Interpretation. The captions and headings to this Supply Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Supply Agreement. Unless specified to the contrary, references to Articles, Sections, Schedules or Exhibits mean the particular Articles, Sections, Schedules or Exhibits to this Supply Agreement and references to this Supply Agreement include all Schedules and Exhibits hereto. Unless context clearly requires otherwise, whenever used in this Supply Agreement: (i) the words include or including shall be construed as incorporating, also, but not limited to or without limitation; (ii) the word or shall have its inclusive meaning of and/or; (iii) the word notice shall require notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other written communications contemplated under this Supply Agreement; (iv) the words hereof, herein, hereunder, hereby and derivative or similar words refer to this Supply Agreement (including any Schedules and

Term Section Defined Alternate Supplier 2.15 Acceptance Period 4.2 COA/COC 4.1 CMC 6.2 CMO 2.15 Delivery Time Period 2.9.2 Disputed Matter 11.4 Drug Master File 6.2 Effective Date Preamble Force Majeure 12.3 Forecast 2.3 Indemnify 9.1.1 Laboratory 4.3 Latent Defect 4.2 Liabilities 9.1.1 License Agreement Background Manufacturing Change 6.6 MSDS 4.1 Other Extract 2.16 Party or Parties Preamble

Term Section Defined Phase 3/Commercial Supply Agreement 2.14 Q1, Q2 or Q3 2.3 Quality Agreement 6.7 Senior Management 11.2 Short Dated Product 2.11 Sutro Preamble Sutro Activity Criteria 4.1 Sutro Activity Test 4.1 Sutro Indemnitees 9.1.2 SutroVax Preamble SutroVax Activity Criteria 4.1 SutroVax Activity Test 4.1 SutroVax Indemnitees 9.1.1 Supply Agreement Preamble Term 10.1 Third-Party Claim 9.1.1 Transfer Addendum 2.15 Work Order 2.3





Exhibits); (v) provisions that require that a Party or the Parties agree, consent or approve or the like shall require that such agreement, consent or approval be specific and in writing; (vi) words of any gender include the other gender; (vii) words using the singular or plural number also include the plural or singular number, respectively; (viii) references to any specific law, or article, section or other division thereof, shall be deemed to include the then-current amendments thereto or any replacement thereof; (ix) neither Party shall be deemed to be acting under the authority of the other Party; and (x) any capitalized terms used and not defined in this Supply Agreement shall have the meaning set forth in the License Agreement.

ARTICLE 2 SUPPLY

2.1 Supply. Pursuant to the terms and conditions of this Supply Agreement, Sutro agrees that it will Manufacture the Product(s) at the Facility(ies) for SutroVax and shall supply the Product(s) to SutroVax, its Affiliates, and any SutroVax CMO, for purposes of production of Vaccine Compositions (including development of processes for the production of Vaccine Compositions), solely for non-clinical research purposes or in Phase I or Phase II clinical trials of such Vaccine Compositions..

2.2 Transfer of Product. Subject to Section 2.1, SutroVax may transfer Products to SutroVax CMOs selected by SutroVax and that are reasonably acceptable to Sutro (the acceptance of which by Sutro not to be unreasonably withheld, conditioned or delayed) or previously approved by Sutro.

2.3 Work Orders. From time to time, Sutro and SutroVax may execute one or more work orders, that describe the Product to be Manufactured, the quantities of each Product to be Manufactured and supplied to SutroVax, the Price to be charged by Sutro (which shall be as set forth in Section 3.2) and paid by SutroVax for the Product, and the delivery date(s) for such Product, (as executed, a Work Order). Each Work Order will expressly refer to this Supply Agreement, will form a part of this Supply Agreement, and will be subject to the terms and conditions contained herein. Sutro shall not unreasonably withhold its agreement to any proposed Work Order requested by SutroVax. Sutro shall be obligated to execute proposed Work Orders requested by SutroVax (except with respect to Other Extracts) with respect to quantities in such proposed Work Order for delivery at least [***] months after SutroVax's request to the extent such quantities of Product (when added to the quantities of such Product in Work Orders previously agreed between the Parties for delivery within the one (1) calendar year period prior to the requested delivery date of the proposed Work Order) are less than (a) [***] liters with respect to Extract or (b) a corresponding amount of each Custom Reagent to support use of [***] liters of Extract. Sutro shall notify SutroVax as soon as possible if Sutro believes it will be unable to deliver Product in accordance with the applicable Work Order. Sutro's providing of such notification shall not be interpreted in any manner as relieving Sutro of its obligations under this Supply Agreement, nor shall it prevent SutroVax from pursuing any and all rights and remedies SutroVax may have based on Sutro's failure to be able to deliver any Product in accordance with the terms of this Supply Agreement.





2.4 Orders.

2.4.1 Purchase Orders. Once both parties have executed a Work Order, SutroVax shall place a purchase order for the amounts of Products to be purchased under such Work Order with delivery dates for such amounts consistent with such Work Order. Additionally, SutroVax may from time to time place purchase orders for additional quantities specifying requested delivery dates in accordance with reasonable delivery schedules and lead times; in each case, as may be agreed upon from time to time by the Parties. Each purchase order placed by SutroVax shall specify the quantity of Product, destination(s) and requested delivery dates. Sutro shall promptly accept all purchase orders with respect to the amounts of Products to be purchased under the applicable Work Order and shall accept or reject any amount in the purchase order in excess of the amounts of Products to be purchased under the applicable Work Order and all other purchase orders for Product submitted by SutroVax in accordance with this Article 2 within [***] days from receipt of the order; provided however that Sutro shall use Commercially Reasonable Efforts to accept such amounts and purchase orders. Accepted purchase orders may not be cancelled without the prior written agreement of both Parties except as set forth in Sections 2.5. Unless otherwise directed by SutroVax, Sutro shall fill all accepted purchase orders for Product in accordance with the requested due dates as set forth in further detail in Section 2.9.2.

2.4.2 No Conflicting Terms. The terms and conditions of this Supply Agreement shall be controlling over any conflicting terms and conditions stated in SutroVax's purchase order or Sutro's invoice, confirmation or other standardized document. Any purchase order, order acknowledgement, invoice, proposal or other document which conflicts with or adds to the terms and conditions of this Supply Agreement with respect to the Manufacture and supply of Product for the Territory is hereby rejected, unless the Parties mutually agree to the contrary in writing.

2.4.3 Initial Order. Notwithstanding Section 2.3 or this Section 2.4, Sutro accepts and agrees to fulfil the order previously placed by or on behalf of SutroVax (or to be placed by or on behalf of SutroVax, if no already placed) for the quantities of Product set forth in Schedule 3 by the delivery date set forth therein (the Initial Order).

2.5 Cancellation. Notwithstanding anything herein to the contrary, SutroVax may not modify or cancel purchase orders with respect to the amounts of Product to be purchased under the applicable Work Order, however SutroVax may modify or cancel other purchase orders (including amounts in a purchase order in excess of the amounts of Product to be purchased under the applicable Work Order) for the Products provided that such modification or change is made further in advance of the originally requested delivery date than the required lead time, where the agreed required lead time for the applicable purchase order has been evidenced in writing (including, for example, by email) between the Parties.

2.6 Delivery and Risk of Loss. Sutro shall mark Product for delivery to the destination(s) specified by SutroVax. All shipments of Product(s) shall be delivered [***] (lncoterms 2010) Sutro Facility. Title and risk of loss and damage to the Product(s) shall remain with Sutro until the Product(s) are delivered in accordance with the foregoing, at which time title and risk ofloss and damage to the Product(s) shall pass to SutroVax. SutroVax will arrange for shipping from Sutro's Facility to the destination specified by SutroVax at SutroVax's cost and expense.





2.7 Packaging. Sutro shall provide the Product to SutroVax in Packaged form in accordance with the Required Standards.

2.8 Conformance to Required Standards. Sutro shall Manufacture the Product(s) in accordance with the Required Standards, as the same may be amended or supplemented from time to time. Each Party shall keep the other promptly and fully advised of any new requirements of the applicable Regulatory Authority or Applicable Law of which it becomes aware and Sutro shall promptly implement such requirements as described in Section 6.6.

2.9 Supply and Delivery.

2.9.1 Shortage. Sutro shall use reasonable efforts to promptly notify SutroVax in writing in the event that Sutro is unable or anticipates that it will be unable to supply compliant Product in accordance with the requirements of this Supply Agreement, including the Quality Agreement and all Required Standards, and each Work Order. Sutro shall use Commercially Reasonable Efforts to overcome any inability or anticipated inability to so supply compliant Product to SutroVax.

2.9.2 Delivery Delays. Subject to Section 2.4.1 (including applicable lead times agreed upon in accordance with Section 2.4.1) Sutro shall make deliveries of Product(s) in accordance with Section 2.6, no more than [***] days before or [***] after the delivery dates specified by SutroVax in the relevant purchase order (provided that such delivery date is in accordance with the applicable Work Order or such purchase order was otherwise accepted by Sutro) (the Delivery Time Period). For any failure to supply compliant Product(s) in the later of the Delivery Time Period and the period ending [***] after the delivery date specified under the Work Order, without limiting SutroVax's other remedies, subject to this Section 2.9.2 and Section 9.3 (Limitation of Liability), Sutro shall be liable for any non-cancelable Third Party penalties, costs and expenses incurred by SutroVax as a result of Sutro's failure to supply Product(s) as aforesaid, subject to receipt by Sutro of appropriate documentary evidence of such penalties, costs and expenses to the extent such evidence of such amounts may be provided by SutroVax without breaching SutroVax's or its Affiliates' duties of confidentiality to such Third Party (and provided that SutroVax shall use commercially reasonable efforts to (i) minimize or eliminate such penalties, costs and expenses and (ii) where provision of such evidence to Sutro would result in a breach of such duties of confidentiality, to obtain the consent of the applicable Third Party to the provision of such evidence to Sutro). In the event that Sutro makes a Manufacturing Change and is not able to Manufacture and supply Product in conformance with the Required Standards within [***] days of the delivery date identified on the applicable purchase order, Sutro shall Manufacture such Product without such Manufacturing Change. The rights of SutroVax set forth in this paragraph are in addition to any other rights set forth in this Supply Agreement.

2.10 Allocation. Without limiting any other rights or remedies available to SutroVax, if the demand for a Product in aggregate exceeds available supply or Sutro otherwise concludes that it may be unable to supply a Product in accordance with the requirements of this Supply Agreement in the quantities and within the time periods specified in each Work Order and the corresponding purchase orders that have been accepted by Sutro, Sutro shall immediately notify SutroVax of such shortfall (or anticipated shortfall), and shall use Commercially Reasonable





Efforts to procure Components and capacity adequate to meet accepted purchase orders and supply compliant Product in accordance with the requirements of this Supply Agreement. Sutro shall allocate its available Components and manufacturing capacity to provide SutroVax with quantities of such Product at least equal to the greater of (a) [***] of the amount of Product (or products equivalent to Product) that Sutro allocates for itself and its Affiliates (but in no event less than [***] liters of Extract per month and the minimum allocation volume set out in Schedule 1 of each Custom Reagent per month), provided that SutroVax demonstrates actual need for the applicable quantities of Extract, and (b) the [***]. Without limiting the foregoing, if there is a shortage of supply of Product, Sutro shall provide Product to SutroVax for any quantities of Product ordered by SutroVax in accordance with the applicable Work Order or purchase order in priority to any subsequent Third Party purchase orders, but not in priority to any Third Party purchase orders or other binding commitment placed before placement of the applicable SutroVax Work Order or purchase order.

2.11 Short Dated Product. Sutro agrees to ship all Product(s) so that they are delivered to SutroVax and will remain compliant with the Specifications for at least [***] months from the date of delivery in accordance with this Supply Agreement.

2.12 Subcontracting by Sutro. Sutro shall (a) ensure that any subcontractor or delegatee of Sutro's obligations under this Supply Agreement has and maintains all appropriate qualifications; (b) enter into a quality agreement with each such subcontractor and delegatee which terms are similar to the terms of the Quality Agreement between SutroVax and Sutro; and (c) be responsible for each subcontractor's and delegatee's performance hereunder (including performance or non-performance by such subcontractor or delegatee that would constitute a breach of this Supply Agreement or such quality agreement if conducted by Sutro) as if Sutro were itself performing such activities. Sutro shall not subcontract the Manufacture of Product to a Third Party without SutroVax's prior consent other than to an Alternate Supplier as expressly set forth in Section 2.15.

2.13 CMOs. Notwithstanding anything to the contrary in this Supply Agreement, SutroVax shall have the rights to purchase Available Extracts and Extracts from CMOs (as defined in the License Agreement) to the extent provided in section 3.1 of the License Agreement.

2.14 Phase 3/Commercial Supply Agreement. If requested by SutroVax in writing (which request shall not be made prior to [***]), the Parties shall negotiate in good faith reasonable terms and conditions of an agreement for the supply by Sutro of the Products for the production of Vaccine Compositions for use in phase 3 clinical studies and for commercial purposes (Phase 3/Commercial Supply Agreement). The price for the Products Manufactured by Sutro under the Phase 3/Commercial Supply Agreement shall not exceed [***] of the Fully Burdened Manufacturing Cost thereof. If the Parties have not entered into the Phase 3/Commercial Supply Agreement within [***] after SutroVax's request to negotiate the Phase 3/Commercial Supply Agreement, upon either Party's request by written notice to the other Party the terms and conditions of the Phase 3/Commercial Supply Agreement shall be determined by binding arbitration in accordance with the procedures set forth in Section 11.4. Upon the selection of one draft Phase 3/Commercial Supply Agreement by the arbitrator pursuant to Section 11.4, unless SutroVax elects not to enter into such Phase 3/Commercial Supply





Agreement by written notice thereof to Sutro within [***] days after such selection, the Parties shall execute the definitive Phase 3/Commercial Supply Agreement selected by the arbitrator (but excluding, for clarity, any provision granting to SutroVax or its Affiliates or Sublicensees any right to obtain or use any Sutro Core Know-How); and if SutroVax elects to not enter into the Phase 3/Commercial Supply Agreement selected by the arbitrator by providing notice thereof within such [***] day period, then neither Party shall be obligated to enter into the Phase 3/Commercial Supply Agreement.

2.15 Qualification of Alternate Supplier.

2.15.1 Transfer Addendum.

(a) Transfer Addendum. Upon SutroVax' written request, the Parties agree to negotiate in good faith an addendum to this Supply Agreement setting forth the terms and conditions pursuant to which Sutro will conduct a Process Transfer to a Third Party contract manufacturer (CMO) and/or engage such CMO to establish Capacity to Manufacture Extract (as Process Transfer and Capacity are defined below), in each case for the Manufacture and supply of such Extract for SutroVax' (or its Affiliate's or SutroVax CMO's) use to manufacture Vaccine Compositions, consistent with the remainder of this Section 2.15 (such addendum, a Transfer Addendum). As requested by SutroVax, this procedure may also be used in the event that SutroVax wishes Sutro to conduct a Process Transfer to a Third Party CMO in order to establish Capacity to Manufacture Custom Reagents. In connection with such request, SutroVax shall provide to Sutro a description of the desired Process Transfer and/or Capacity, including timing and other requirements thereof. Such Transfer Addendum shall:

(i) include a plan and budget for the conduct of the Process Transfer and/or establishment of such Capacity, which shall include amounts charged by the CMO (as defined further below, the Alternate Supplier) to receive and conduct such Process Transfer and/or establish such Capacity, as well as reasonable FTE costs for Sutro personnel performing and managing technology transfer activities in accordance with the Transfer Addendum·

(ii) require SutroVax to fund the costs incurred by Sutro to conduct Process Transfer and/or establish such Capacity in accordance with such budget;

(iii) provide for initiation and completion of the Process Transfer and establishment of Capacity as requested by SutroVax, to the extent possible;

(iv) to the extent requested by SutroVax, be designed to enable the Alternate Supplier to Manufacture Extract of suitable quality for use in Phase 3 clinical trials and commercialization of a Vaccine Composition at a capacity to support SutroVax' projected commercial requirements for Extract (or other capacity identified by SutroVax in connection with the negotiation of the Transfer Addendum), as requested by SutroVax;

(v) require the Parties to fully cooperate to verify that the Extract supplied by the Alternate Supplier meets the Specifications, to validate the Manufacturing process implemented at the Alternate Supplier and to qualify the Alternate Supplier, in each case to supply Extract for SutroVax' use in Phase 3 clinical trials and commercialization of a Vaccine Composition (collectively, with respect to Capacity established, Validating such Capacity);





(vi) include mechanisms for keeping SutroVax fully informed, at scheduled intervals not to exceed once per quarter, of the progress of the Process Transfer and establishing such Capacity, as applicable, including with respect to the anticipated date for qualifying the Alternate Supplier and any changes to such anticipated date;

(vii) provide a right for SutroVax to modify the timing of or terminate the Process Transfer, Capacity or specified aspects thereof on reasonable notice, subject to SutroVax' agreement to bear any resulting termination or cancellation fees charged by the Alternative Supplier; and

(viii) include a mechanism for Sutro to cooperate with SutroVax and keep SutroVax reasonably informed with respect to Sutro's negotiation of an agreement with a potential Alternate Supplier for a Process Transfer and/or establishment of Capacity, including with respect to pricing for Extract from the Alternate Supplier to Sutro and any commitments to purchase quantities of Extract from the Alternate Supplier that SutroVax would be obligated to assume (e.g., in connection with establishing Capacity), if any, and require Sutro to obtain SutroVax' approval (not to be withheld unreasonably) of the terms of such agreement prior to entering into such agreement to the extent that the terms apply to SutroVax (it being understood that Sutro may redact any terms that are not relevant to SutroVax).

(b) Scope. As used above, Process Transfer means a technology transfer of Sutro's know-how and information as is necessary or useful for the Third Party CMO to Manufacture in its own facilities Extract that meets SutroVax' requirements, including any such information and know-how as would be needed for such CMO to scale up such Manufacture to the requested commercial volumes. To establish Capacity means that the CMO would take such actions as are necessary (including validation and if necessary adapting or reserving existing facilities, establishing new facilities and/or procuring necessary equipment) to Manufacture Extract meeting SutroVax' requirements for Phase 3 and commercial supply in such quantities as SutroVax designates. It is understood that SutroVax may request that the Process Transfer and establishment of Capacity be undertaken in separate steps, for example by undertaking an initial Process Transfer to demonstrate the CMO's ability to Manufacture Extract, and then later establishing Capacity for Phase 3 and commercial supply, as requested by SutroVax in accordance with Section 2.15.1(a) (i.e., in separate requests).

(c) Selection of Alternate Supplier. The Alternate Supplier will be selected by Sutro, provided that Sutro must select an Alternate Supplier that is substantially similar to those CMOs identified on Schedule 2.15.1 hereto and provided further that SutroVax shall have the right to veto such selection based only on a genuine and material conflict of interest between SutroVax and the Alternate Supplier. Additional CMOs may be added to Schedule 2.15.1 by Sutro with SutroVax's approval (not to be withheld unreasonably).





(d) Alternate Supplier as Subcontractor. It is understood that the Alternate Supplier established under the Transfer Addendum shall operate as a subcontractor of Sutro under this Supply Agreement and the Phase 3/Commercial Supply Agreement, and as such SutroVax will order from Sutro thereunder any Extract to be Manufactured by such Alternate Supplier. Subject to the foregoing, the Transfer Addendum and the Phase 3/Commercial Supply Agreement will include reasonable and customary rights for SutroVax to conduct audits/inspections, site visits, quarterly meetings, each such audit/inspection, site visit and quarterly meeting to be coordinated by Sutro and to occur in the presence of a representative for Sutro and SutroVax, in connection with the Alternate Supplier's manufacture of Extract for supply to SutroVax. For clarity, SutroVax shall not conduct any business discussions for the supply of Extract with the Alternate Supplier in a manner that induces the Alternate Supplier to breach its agreement with Sutro. Notwithstanding the foregoing, in the event Sutro undergoes a Change of Control or Sutro permits any third party to acquire Extract directly from an Alternate Supplier established under the Transfer Addendum, then SutroVax shall thereafter have the right to establish a supply agreement with and obtain supply of Extract directly from such Alternate Supplier.

(e) Quotations. Upon SutroVax's request (which request, for clarity, may be before a request to negotiate a Transfer Addendum), Sutro shall seek quotations from one or more Third Party CMO(s) for such a Process Transfer and/or establishment of such Capacity, in each case as requested by SutroVax, and the Parties shall reasonably cooperate to establish requests for quotations for such purposes.

(f) Arbitration. If the Parties have not agreed upon a Transfer Addendum within [***] after SutroVax' request, upon SutroVax' request by written notice to Sutro, the terms and conditions of the Transfer Addendum shall be determined by binding arbitration in accordance with the procedures set forth in Section 11.4. For clarity, however, it is understood that a Transfer Addendum shall not include any provision granting to SutroVax or its Affiliates or Sublicens.ee s any right to obtain or use any Sutro Core Know-How.

2.15.2 Source of Supply. It is understood that after the Alternate Supplier is qualified, SutroVax shall have the right under this Supply Agreement and the Phase 3/Commercial Supply Agreement to specify whether Extract ordered from Sutro pursuant to this Agreement or the Phase 3/Commercial Supply Agreement will be Manufactured at Sutro's Facility or at the Alternate Supplier's facilities (and to the extent Extract from the Alternate Supplier is ordered under this Supply Agreement or the Phase 3/Commercial Supply Agreement, the facility of the Alternate Supplier shall be deemed a Facility for purposes of this Supply Agreement and the Phase 3/Commercial Supply Agreement). Notwithstanding the foregoing, to the extent the FDA and EMA have confirmed that Extract manufactured at Sutro's Facility and the Alternate Supplier's Facility are interchangeable and can be supplied from either such Facility without any additional regulatory requirements or regulatory delay with respect to the applicable Vaccine Composition, and such Extract otherwise meets SutroVax' requirements, then with SutroVax' consent (not to be withheld unreasonably) Sutro may supply Extract from either Sutro's Facility or the Alternate Supplier's Facility.

2.15.3 Price. To the extent Sutro or its Affiliate Manufactures Extract supplied to SutroVax, the Price (per unit volume or unit weight) under this Supply Agreement and the Phase 3/Commercial Supply Agreement for such Extract shall not exceed [***] of the Fully Burdened Manufacturing Costs of such Extract; and to the extent the Extract to be supplied to SutroVax is Manufactured by a Third Party (including the Alternate Supplier), the Price to be





charged to SutroVax under this Supply Agreement and the Phase 3/Commercial Supply Agreement for such Extract shall equal the amount Sutro paid such Third Party for such Extract (OOP Cost) plus an amount reasonably calculated to cover Sutro's FTE costs to procure and manage the relationship with such Third Party, such amount not to exceed [***] of the OOP Cost for such Extract. To the extent that Sutro or its Affiliate receives any portion of the amounts paid to such Third Party to Manufacture Extract (e.g., as a profit share or otherwise), the Price to be charged SutroVax shall be the lesser of i) [***], or ii) [***]; in either case, [***]. For clarity, Section 3.4 of the License Agreement shall apply with respect to the Alternate Supplier.

2.15.4 Sutro/Third Party use of Alternate Supplier. Once the Alternate Supplier is qualified pursuant to this Section 2.15, SutroVax shall have the first right (as between SutroVax and Sutro or Third Parties supplied or authorized by Sutro) to obtain Extract Manufactured by the Alternate Supplier up to the Capacity established pursuant to the Transfer Addendum for a period ending the later of [***] or [***], and provided SutroVax commits to [***] or [***].

2.16 Other Extracts. From time-to-time, subject to an agreed-upon Work Order, SutroVax may place purchase orders for quantities of research grade extract derived from strains of E. Coli other than that set forth on Schedule 1 attached hereto (each an Other Extract). Sutro shall use Commercially Reasonable Efforts to accept such purchase orders (and shall accept such purchase orders placed consistent with an agreed-upon Work Order) and manufacture and supply to SutroVax such Other Extracts. For the purpose of calculating the Price for Other Extracts in accordance with this Section, the Price will be the cost of materials and Sutro's labor at an FTE rate of [***] per year for Sutro laboratory scientists. Upon Sutro's acceptance of a purchase order for Other Extract, such Other Extract in such purchase order shall be deemed Extract for purposes of Sections 2.1, 2.2, 2.3, 2.4.1 (solely with respect to the last two sentences thereof), 2.5, 2.6, 2.7, 2.8, 2.9.1 , 3.1, 4, 5, 6, 7 and 9.

2.17 Manufacture of Custom Reagents. For clarity, SutroVax may Manufacture Custom Reagents itself or obtain supply thereof through a Third Party independent of this Supply Agreement and nothing in this Supply Agreement is intended to restrict SutroVax from doing so. Upon SutroVax's request, and subject to the remainder of the terms of this Section 2.17, Sutro shall (a) transfer to SutroVax or a contract manufacturer designated by SutroVax (which contract manufacturer is reasonably acceptable to Sutro, the approval of which shall not be unreasonably withheld, conditions or delayed by Sutro) as soon as reasonably practicable the process to Manufacture each Custom Reagent and the items of Sutro Know-How reasonably necessary for SutroVax or its designee to Manufacture each Custom Reagent, including cell lines, standard operating procedures, protocols, batch records, analytical method standard operating procedures and analytical method transfer protocols and (b) make Sutro Personnel reasonably available to SutroVax or its designee for scientific and technical explanations and on-site support that may reasonably be requested by SutroVax or its designee to Manufacture the Custom Reagents; provided however, that SutroVax shall fully reimburse Sutro for all documented time spent by Sutro's personnel to perform such transfer (on an FTE basis, each such FTE charged at an annual rate of [***]) and out-of-pocket costs incurred by Sutro in connection with all of the activities under the preceding sub-clauses (a) and (b), in accordance with a budget reasonably approved in advance by SutroVax. Upon such SutroVax request, Sutro and SutroVax shall, within [***] days, agree on a scope of work for such transfer, including





scale, timeline, estimated budget, and required materials; both parties shall use reasonable efforts to complete the transfer as soon as reasonably practical. If requested by SutroVax (including if such request is prior to agreement on a scope of work), Sutro shall promptly transfer to SutroVax or its designee the cell lines, manufacturing instructions and analytical methods used for Manufacture of each Custom Reagent. For clarity, SutroVax shall have the right to enter into an agreement directly with such designee for the Manufacture and supply of Custom Reagents directly to SutroVax, its Affiliates, and any SutroVax CMO and, upon SutroVax's request, to the extent necessary, Sutro shall authorize such designee to enter into such agreement with SutroVax and perform such activities. For further clarity, Sutro shall not be responsible for any damages resulting from delay or failure in establishing the processes for Manufacture of Custom Reagents at SutroVax's designee resulting from action or inaction on the part of the designee or to the extent beyond Sutro's control. SutroVax shall have the right to obtain from such designee such items of Sutro Know-How transferred to such designee and use such items in connection with the exercise of its rights pursuant to the License Agreement, including for the Manufacture of Custom Reagents and the management of such designee. SutroVax shall use such Sutro Know-How transferred under this Section 2.17 (to the extent it is Discloser's Information of Sutro and does not meet one or more the criteria in clause (a) through (e) of Section 10.1 of the License Agreement) only for the Manufacture of Custom Reagents or otherwise within the scope of rights and licenses granted SutroVax in the License Agreement. In case of such a transfer to SutroVax or its designee, SutroVax will share with Sutro (i) the proposed process for manufacture of Custom Reagents through a Third Party so that Sutro may provide feedback and ensure that the process and Specifications are consistent with Sutro's process, and (ii) all regulatory submissions (including DMFs with respect to Custom Reagents) at least [***] days in advance of their intended date of submission to a Regulatory Authority in the Territory, and shall take into account Sutro's feedback to ensure alignment with Sutro's regulatory submissions and Regulatory Approvals with respect to Custom Reagents. Following completion of the transfer set forth above, Sutro shall provide reasonable support for the use of Third Party Custom Reagents in conjunction with Extract supplied by or on behalf of Sutro. In addition, Extract supplied by Sutro that conforms to the Required Standards when tested with Custom Reagents supplied by Sutro but not with Custom Reagents manufactured under this Section shall be deemed to conform to the Required Standards and SutroVax may not reject such Extract as a result of such non-conformance to the Required Standards when tested with Custom Reagents. SutroVax shall not prevent Sutro from separately contracting with the contract manufacturer for Manufacture of Custom Reagents for use on its own behalf or on behalf of other third parties.

2.18 Sutro Core Know-How. Notwithstanding anything to the contrary, except as set forth in Section 15.3 of the License Agreement, in no event shall SutroVax, its Affiliates or Sublicensees have the right to access any Sutro Core Know-How (as defined in the License Agreement), whether directly from Sutro or its Affiliates or through a CMO or otherwise, and SutroVax, its Affiliates and Sublicensees shall not require, request or solicit any CMO to deliver any Sutro Core Know-How to SutroVax, its Affiliates and/or its Sublicensees, and no agreement between any CMO and Sutro, its Affiliates and Subsidiaries shall contain any provision granting to SutroVax or its Affiliates or Sublicensees any right to obtain or use any Sutro Core Know-How. Without limiting the foregoing, in the event any item of Sutro Core Know-How is delivered to SutroVax, its Affiliates and/or its Sublicensees (except as set forth in Section 15.3 of the License Agreement), SutroVax, its Affiliates and Sublicensees shall immediately return such item to Sutro. Notwithstanding the foregoing, to the extent SutroVax or any of its Affiliates





or Sublicensees is required by a Regulatory Authority (or Applicable Law) in the United States, Europe or Japan to confidentially disclose, as part of the applicable regulatory filings with respect to a Vaccine Composition, any Sutro Core Know-How (for clarity, excluding any tangible embodiments of such Sutro Core Know-How other than information and documentation), Sutro shall, upon SutroVax's written request, confidentially disclose such Sutro Core Know-How as part of the applicable regulatory filings, subject to the payment obligations set forth in Section 5.4 of the License Agreement.

2.19 Express Rights. Except as expressly set forth in this Supply Agreement, no rights or licenses are granted to SutroVax under this Supply Agreement.

2.20 Extract Requirements. SutroVax agrees to purchase all its requirements of Extract from Sutro in accordance with this Agreement, except to the extent SutroVax is allowed to purchase Extract from (a) Alternate Suppliers engaged by Sutro in accordance with Section 2.15 of this Agreement; (b) a CMO engaged or established and authorized by Sutro under Section 3.l(d) of the License Agreement; or (c) a CMO authorized by Sutro under Section 3.l(e) of the License Agreement. Manufacturing of Extracts in breach of this Section 2.20 shall be deemed a material breach of this Agreement and the License Agreement by SutroVax.

ARTICLE 3 PRICING AND PAYMENT

3.1 Invoices. Sutro shall invoice SutroVax at the time of each shipment of Product(s) for the Price for such shipment. SutroVax will pay such invoices within [***] days of receipt of invoice (including all required documentation) by SutroVax.

3.2 Prices. The Prices for the Products shall not exceed [***] of the Fully Burdened Manufacturing Costs of such Product at the time such Product is manufactured and shall be set forth in the applicable Work Order. Upon SutroVax's request from time-to-time, Sutro shall disclose to SutroVax the then- current Price for Product. The Price for the Products as of the Effective Date is set forth in Schedule 1.

3.3 Recordkeeping. During the Term and for [***] years thereafter, or for such longer period as may be required by Applicable Law, Sutro shall prepare and retain, and shall cause its subcontractors to prepare and retain, accurate books and records related to transactions made pursuant to this Supply Agreement and Prices. Such records shall be made available for reasonable review, audit and inspection upon reasonable notice and with reasonable frequency, upon SutroVax's request for the purpose of verifying Sutro's calculations of amounts due hereunder, the basis for such calculations (including Sutro's calculation of the Fully Burdened Manufacturing Costs) or payments and Sutro's compliance with the terms and conditions of this Supply Agreement. Audits and inspections may be conducted by SutroVax's own personnel or retained consultant(s), subject to the confidentiality obligations set forth in this Supply Agreement.

3.4 Taxes. The Prices are exclusive of all Taxes. SutroVax will pay all taxes and duties that are assessed by any national, federal, state or local governmental authority on SutroVax's purchase or use of the Products, including, without limitation, sales, use, excise, value-added and withholding taxes, but excluding any taxes based on Sutro's income or gross receipts (collectively, Taxes). Sutro will separately identify all such Taxes on Sutro's invoice.





ARTICLE 4 PRODUCT TESTING

4.1 Product Testing and Inspections. Each shipment of Product shall be accompanied by a certificate of analysis describing all current requirements of the Specifications and results of tests performed on such Product and a certificate of conformity certifying that the quantities of Product supplied have been Manufactured, controlled and released according to the Required Standards (COA/COC) as set forth in the applicable Quality Agreement (subject to SutroVax's conduct of the SutroVax Activity Test to confirm Extract meets the SutroVax Activity Criteria). The COA/COC acceptance criteria for each Product shall be set forth in the Specification for such Product. Two of the tests and corresponding COA/COC acceptance criteria for the Extract shall be the performance of a productivity (Activity) test of the applicable Sutro protein (the Sutro Activity Test and Sutro Activity Criteria) and the performance of a productivity (activity) test of the applicable Vaccine Composition (the SutroVax Activity Test and SutroVax Activity Criteria). Sutro shall perform the Sutro Activity Test to confirm that all shipments of Extract meet the Sutro Activity Criteria and SutroVax (or its designee) shall perform the SutroVax Activity Test to confirm that all shipments of Extract meet the SutroVax Activity Criteria. Sutro will also provide SutroVax with Material Safety Data Sheets (MSDS) or an equivalent instrument recognized by the applicable Regulatory Authority as required for the Product(s), and updates of the same as necessary.

4.2 Acceptance/Rejection of Non-Conforming Goods. SutroVax or its designee shall have a period of [***] calendar days from the date of delivery of the Product(s) in accordance with Section 2.6 and the COA/COCs or the equivalent instrument recognized by the applicable Regulatory Authority for such Product(s) (Acceptance Period), to inspect any shipment of Product(s) and conduct the SutroVax Activity Test to determine whether such shipment conforms to the Required Standards. If SutroVax determines that the Product(s) do not conform to the Required Standards, it hall notify Sutro within the Acceptance Period, and, if requested by Sutro, SutroVax shall ship a sample of such non-conforming Product(s) to Sutro at Sutro's expense. SutroVax's failure to notify Sutro of the non-conformity within the Acceptance Period will be deemed for purposes of this Supply Agreement to constitute SutroVax's acceptance of such shipment, provided, however, that such acceptance shall be subject to SutroVax's right to reject Product(s) until [***] days from the delivery date of the applicable Product, in each case, due to discovery by SutroVax or SutroVax's Affiliates or designees that the applicable Product does not conform to the Required Standards and such non-conformance could not reasonably be discovered within the Acceptance Period (Latent Defects) provided that SutroVax gives Sutro with written notice of such Latent Defect within [***] days of SutroVax or any SutroVax Affiliate or designee becoming aware of such defect.

4.3 Disputes Regarding Conformance to Required Standards. If Sutro does not agree with SutroVax's determination that Product fails to conform to the Required Standards, then Sutro shall so notify SutroVax in writing within [***] days of its receipt of SutroVax's notice of non-conformity with respect to such Product and (if requested) Product sample. Sutro and SutroVax shall use reasonable efforts to resolve such disagreement as promptly as possible.





Without limiting the foregoing, Sutro and SutroVax shall discuss in good faith mutually acceptable testing procedures pursuant to which both Sutro and SutroVax will re-test a sample of the disputed Product to determine whether such Product meets the Required Standards. Notwithstanding the foregoing, in the event that Sutro and SutroVax are unable to resolve such disagreement within [***] days of the date of the applicable rejection notice, either Party may submit a sample of the allegedly non-conforming Product for testing and a determination as to whether or not such Product conforms to the Required Standards to an independent testing organization, or to a consultant of recognized repute within the United States pharmaceutical industry, in either case mutually agreed upon by the Parties (such organization or consultant, the Laboratory), the appointment of which shall not be unreasonably withheld or delayed by either Party. The determination of the Laboratory with respect to all or part of any shipment of Product shall be final and binding upon the Parties. The fees and expenses of the Laboratory making such determination shall be borne by Sutro, in the event that the Laboratory determines that the Product was non-conforming and by SutroVax, in the event that the Laboratory determines that the Product did conform to the Required Standards.

4.4 Return and Replacement of Non-Conforming Goods. Product that is either rejected by SutroVax as not meeting the Required Standards, or that is determined by the Laboratory not to meet such Required Standards, shall, [***], be returned by SutroVax to Sutro, or destroyed pursuant to Applicable Law, at Sutro's reasonable expense. Sutro shall replace any non-conforming Product(s) within the shortest possible time. SutroVax shall have no responsibility to Sutro for the amounts invoiced for non-conforming Product(s), and shall be credited for any amounts paid, but shall pay Sutro the applicable Price for the replacement Product(s) under the terms of Section 3.1.

ARTICLE 5 INSPECTION

5.1 Right to Audit. During the Term and the [***] period thereafter, SutroVax or a SutroVax Affiliate may, during normal working hours and upon reasonable advance notice perform site audits and inspect, or request information relating to, Sutro's or its subcontractor's Facilities and records directly or indirectly involved in the performance of this Supply Agreement or related to the Product(s). Such requests should be made in writing and Sutro will allow for such audits or inspection to occur within [***] days from request (excepting for cause audits) for Sutro's Facilities and within [***] days' from request (excepting for cause audits) for Sutro's subcontractor's facilities. Reasonable advance notice for audits for cause shall not require more than [***] advance notice. During such an inspection or request for information the inspectors may inquire about the progress of the work being carried out by Sutro or its subcontractor, and are in particular but not exclusively authorized to:

5.1.1 Inspect the Facilities, documents and equipment used, or to be used, in the Manufacture of the Product(s);

5.1.2 Verify the qualifications of the employees and subcontractors carrying out such work and their use of the relevant equipment;





5.1.3 Evaluate all scientific techniques used by Sutro, its subcontractors and their respective employees in the performance of this Supply Agreement and the procedures used in the creation and storage of samples of the Product(s), provided that nothing in this Section 5.1.3 shall require Sutroto disclose any Sutro Core Know-How;

5.1.4 Verify and evaluate information relating to the utilization of the Manufacturing capacity of Sutro's Facilities or its subcontractor's Facilities;

5.1.5 Review correspondence, reports, filings and other documents from Regulatory Authorities to the extent related to the Manufacturing activities hereunder;

5.1.6 Evaluate the implementation of all Manufacturing and process changes made with respect to the Product, including pursuant to any corrective action plan; and

5.1.7 Ascertain compliance with Applicable Laws, the Specifications and this Supply Agreement.

5.2 Access. Sutro shall provide SutroVax's and its Affiliate's and Sublicensee's inspectors with access to its Facilities, and information related to such Facilities, in order that the inspectors may carry out the inspections or inquiries referred to in the provisions of this Article 5. For the avoidance of doubt, neither SutroVax nor any of its Affiliates or Sublicensees (or their respective inspectors) shall have the right to observe the Manufacture of the Extract or be present at Sutro and its subcontractors' Facilities at such times when Extract is being Manufactured. Sutro shall use Commercially Reasonable Efforts to obtain from its subcontractors commitments similar to those contemplated in this Section 5.2. Audits and inspections may be conducted by SutroVax's own personnel or retained consultant(s), subject to the confidentiality obligations set forth in this Supply Agreement.

5.3 Sutro Audits. Without limiting the foregoing; Sutro is responsible for auditing the facilities of the suppliers of Components, if any, periodically, and Sutro agrees to provide SutroVax, upon SutroVax's request with a current copy of the audit report of such facilities and to incorporate SutroVax's comments with respect to any corrective action plan related to the Product.

ARTICLE 6 REGULATORY AND QUALITY RESPONSIBILITIES

6.1 Regulatory Responsibilities. Sutro shall obtain and maintain any and all regulatory and governmental permits, licenses and approvals that are necessary for Sutro to Manufacture the Product(s) for SutroVax or its Affiliates in accordance with the terms of this Supply Agreement and Applicable Law. As between the Parties, SutroVax shall have the sole responsibility for all Regulatory Approvals of the Vaccine Compositions.

6.2 Right of Reference; Drug Master Files. Sutro shall (a) file Drug Master File(s) for the Products with the FDA as requested by SutroVax, and with Regulatory Authorities in the European Union (including the United Kingdom) and Japan in accordance with timelines to be mutually agreed upon (such agreement not to be unreasonably withheld by either Party) (provided at SutroVax's request, Sutro shall do so within [***] of SutroVax's request using





Regulatory Filings that comprise versions of the DMF(s) filed with the FDA that have been reformatted to comply with EU and Japanese requirements), and (b) provide the appropriate authorizations to such Regulatory Authority(ies) allowing the Regulatory Authority the right to review and SutroVax or its designee to reference such Drug Master File(s) in support of (and other Regulatory Materials, to the extent necessary to support) an application for Regulatory Approval submitted by SutroVax (or its permitted designee) for any Vaccine Composition produced using the Product the subject of the applicable Drug Master File (it being understood that SutroVax, its Affiliates· and Sublicensees shall not have access to the information contained in such Drug Master Files (or other confidential Regulatory Materials submitted for a similar purpose as a Drug Master File (e.g., a clinical trial application for such purpose in the European Union)) as a result of such authorization and right to reference). Sutro shall file such Drug Master File in coordination with SutroVax's efforts to file and prosecute the applicable regulatory filings to such Regulatory Authority and Sutro shall be responsible, at SutroVax's sole expense (subject to a budget reasonably approved in advance by SutroVax), for providing the applicable Regulatory Authorities with such additional data as they may request (which may in some cases require Sutro to conduct additional studies), and for correcting any deficiencies of such Drug Master File identified by such Regulatory Authority, in each case in a reasonably prompt and efficient manner so as to prevent any delay in obtaining Regulatory Approvals for any Vaccine Composition based on such Drug Master File. In addition, Sutro shall be responsible for maintaining such Drug Master File in accordance with applicable Laws as necessary to support filing and prosecuting the applicable regulatory filing(s) and obtaining and maintaining the applicable Regulatory Approval(s) for Vaccine Compositions produced using the Products. For further clarity, to the extent Sutro discloses. Sutro Know- How to SutroVax, SutroVax shall have the right to include (and authorize the inclusion of) such Sutro Know-How in Regulatory Materials to the extent it is necessary or useful for the purpose of obtaining Regulatory Approval of a Vaccine Composition. Sutro's obligations under this Section 6.2 shall [***]. Sutro shall cause its personnel to record time spent performing such activities to a job code specific to such activities. For purposes of this Article 6 Drug Master File or DMF means a submission to a Regulatory Authority of information concerning the chemistry, manufacturing and controls (CMC) of the Products to permit such Regulatory Authority to review this information in support of any application for Regulatory Approval for a product submitted by a party that has been granted a right to reference such submission without disclosing the contents of such submission to such party. Sutro shall file DMF(s) for the Products with other Regulatory Authorities in the Territory in accordance with the terms and conditions of the Phase 3/Commercial Supply Agreement referenced in Section 2.14 (and, for clarity, shall file DMF(s) for the Products with Regulatory Authorities in the European Union (including the United Kingdom) and Japan as necessary to comply with the requirements of such Regulatory Authorities, to the extent not filed under this Supply Agreement).

6.2.1 Compliance. Subject to the foregoing, Sutro shall provide the information set forth under this Section 6.2 in a timely manner and compliant with the reporting requirements of the Regulatory Authorities.





6.2.2 Safety Data. Each Party understands and acknowledges that the other Party and its Affiliates and respective licensees or sublicensees may need to access and utilize and include certain safety data (e.g., adverse event reports) pertaining to product made using Products that is generated or received by such Party and its Affiliates and respective licensees or sublicensees in its Regulatory Materials in its respective Territory as required by applicable Laws. Each Party shall have the right to share any and all such safety data generated by the other Party or the other Party's Affiliates or licensees or sublicensees with its Affiliates and Third Parties (including its licensees and sublicensees) as permitted under section 10.2 of the License Agreement.

6.2.3 Cooperation. Each Party agrees to (i) make its personnel reasonably available at their respective places of employment to consult with the other Party on issues related to the activities conducted in accordance with this Article 6 or otherwise relating to the development of the Products or Vaccine Compositions and thereafter in connection with any request from any Regulatory Authority, including with respect to regulatory, scientific, technical and clinical testing issues, or otherwise, throughout the Term, and (ii) otherwise provide such assistance as may be reasonably requested by the other from time-to-time in connection with the activities to be conducted under this Article 6 or otherwise relating to the development of the Vaccine Compositions or Products.

6.3 Recalls. Each of SutroVax and Sutro will immediately inform the other in writing if it believes one or more lots of any Product(s), or any products made by Sutro or its licensees using the Products (to the extent such products are made using Products from the same batch provided to SutroVax), or any Vaccine Compositions should be subject to recall from distribution, withdrawal or some other field action, or that potential adulteration, misbranding, and/or other issues have arisen that relate to the safety or efficacy of such Product. SutroVax shall have the final decision-making authority as to any such recall or field action and the sole right to initiate any such recall or field action with respect to Vaccine Compositions made using the Products. Sutro shall cooperate in the conduct of any recall or field action with respect to the Vaccine Compositions as reasonably requested by SutroVax. In the event it is determined that such a recall resulted from a breach by either Party of any of its representations, warranties, duties or obligations under this Supply Agreement, such Party shall be responsible for the costs of the recall and shall reimburse the other Party as necessary; provided that if both Parties share responsibility with respect to such recall, the costs shall be shared in the ratio of the Parties' contributory responsibility.

6.4 Retention of Samples. Sutro shall prepare and retain, and shall cause its subcontractors to prepare and retain, such samples and records in respect of the Product(s) and the Manufacture thereof as are required by Applicable Law (including, as applicable, cGMPs).

6.5 Regulatory Authority Inspections and Correspondence. Sutro shall permit Regulatory Authorities to conduct such inspections of any Facility at which any of the Manufacturing activities relating to the Product(s) are performed, as such Regulatory Authorities may request, including pre-approval inspections,· and shall cooperate with such Regulatory Authorities with respect to such inspections and any related matters, in each case that is related to the Manufacture of Product(s). Sutro shall give SutroVax or its Affiliates prior written notice of any such inspections, and shall keep SutroVax informed about the results and conclusions of each such regulatory inspection, including actions taken by Sutro to remedy conditions cited in such inspections. Sutro shall provide SutroVax with copies of any written inspection reports issued by anyRegulatory Authority and all correspondence between Sutro and any Regulatory Authority with respect thereto, including any notices of observation and all related





correspondence, in each case relating to the Product(s) or its Manufacture or to general manufacturing concerns (e.g., facility compliance or the like) that are reasonably likely to impact the Product(s) to the extent such general manufacturing matters would be reasonably expected to have a material effect on the manufacture of Vaccine Compositions; provided that Sutro may redact from any such report and correspondence any Sutro Core Know-How and any information subject to an obligation of confidentiality to a Third Party. In addition, Sutro agrees to promptly notify and provide SutroVax copies of any material request, directive, or other written communication to or from Regulatory Authorities related to the Product or its Manufacture that would reasonably be expected to have a material effect on the manufacture of Vaccine Compositions (it being understood that SutroVax, its Affiliates and Sublicensees shall not have access to Sutro Core Know How (which Sutro may redact from such reports or correspondence provided to SutroVax) or Sutro's Drug Master Files or other confidential Regulatory Materials submitted for a similar purpose as a Drug Master File). Sutro shall provide SutroVax with a copy of the applicable portion of any correspondence made by Sutro to a Regulatory Authority for review and comment prior to submission to the applicable Regulatory Authority solely to the extent such correspondence made by Sutro is related to SutroVax or is in response to a request, directive or correspondence from the applicable Regulatory Authority regarding SutroVax or a Vaccine Composition (e.g., in response to a report regarding a pre- approval inspection for SutroVax). Sutro will consider in good faith any comments received from SutroVax within the time period indicated by Sutro (which shall not be less than [***], to the extent consistent with the require timeline for Sutro's response) with respect to any matter that relates to SutroVax. In addition, Sutro shall notify SutroVax of any occurrences or information that arise out of Sutro's Manufacturing activities that have, or could reasonably be expected to have, adverse regulatory compliance or reporting consequences concerning any Product(s) or which might otherwise be reasonably expected to adversely affect the supply by Sutro of Product(s) to SutroVax.

6.6 Changes or Modifications in Manufacturing Activities. Sutro shall not make any changes to the Specifications, processes, Facilities, raw materials, raw material suppliers or any other item that would affect the Manufacturing activities related to the Product (a Manufacturing Change) that (a) would require a change to the applicable Drug Master File, (b) would be reasonably expected to cause SutroVax to be materially delayed obtaining any Regulatory Approval with respect to Vaccine Compositions or (c) causes the Product to not meet the Specification therefor (including the Activity Test with respect to Extract); without SutroVax's prior written consent (not to be unreasonably withheld, conditioned or delated). Notwithstanding the foregoing, Sutro shall promptly make and implement such changes as are required by Applicable Law provided that, prior to implementation, Sutro shall provide notice thereof to SutroVax and confer with SutroVax with respect to its timelines, estimated effect on Price and other issues regarding such implementation. Sutro shall provide SutroVax at least [***] days' written notice prior to implementing any Manufacturing Change. Sutro shall not make any change to the Specification for a Product without SutroVax's prior written consent. In addition, SutroVax shall have the right to request changes in or modifications to the Specifications and Sutro will consider in good faith any such requested changes or modifications. All such changes or modifications shall be documented in writing and shall be signed by an authorized representative of SutroVax and Sutro. If such changes or modifications result in a material change in Sutro's Manufacturing costs or lead times, the Parties shall agree upon an appropriate adjustment to the Price or in the delivery schedules, as the case may be, for Product(s) to be provided by Sutro hereunder. Sutro shall promptly implement any agreed upon changes to the Specifications.





6.7 Quality Agreement. As soon as reasonably practicable after the Effective Date, the Parties shall enter into a quality agreement governing Sutro's supply of Products (the Quality Agreement), which Quality Agreement shall include the Specifications for the Product(s) consistent with the Specifications set forth in Schedule 2. Accordingly, to permit the Quality Agreement to be finalized within such period, Sutro shall provide SutroVax or its designee access to Sutro's Facilities and records to enable SutroVax or its designee to complete an audit pursuant to Section 5.1 within [***] days after the Effective Date.

ARTICLE 7 REPRESENTATION AND WARRANTIES

7.1 SutroVax Warranties and Representations. SutroVax represents and warrants the following:

7.1.1 SutroVax is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.

7.1.2 SutroVax has all requisite power and authority to enter into this Supply Agreement. The person signing this Supply Agreement has the necessary corporate authority to legally bind SutroVax to the terms set forth herein.

7.1.3 SutroVax's execution of this Supply Agreement and performance of the terms set forth herein will not cause SutroVax to be in conflict with or constitute a breach of its organizational documents nor any other agreement, court order, consent decree or other arrangement, whether written or oral, by which it is bound.

7.1.4 SutroVax's execution of this Supply Agreement and performance hereunder are in, and will be in, compliance with any Applicable Law in all material respects.

7.1.5 This Supply Agreement is its legal, valid and binding obligation, enforceable against SutroVax in accordance with the terms and conditions hereof, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally or by the principles governing the availability of equitable remedies.

7.2 Sutro Warranties and Representations. Sutro represents and warrants the following:

7.2.1 Sutro is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.

7.2.2 Sutro has all requisite power and authority to enter into this Supply Agreement and has the requisite skill, knowledge, staffing, financial resources, capacity and ability to carry out its obligations hereunder. The person signing this Supply Agreement has the necessary authority to legally bind Sutro to the terms set forth herein.





7.2.3 Sutro's execution of this Supply Agreement and performance of the terms set forth herein will not cause Sutro to be in conflict with or constitute a breach of its organizational documents nor any other agreement, court order, consent decree or other arrangement, whether written or oral, by which it is bound.

7.2.4 Sutro's execution of this Supply Agreement and performance hereunder are in, and will be in, compliance with any Applicable Law in all material respects.

7.2.5 Sutro has and will maintain throughout the Term all permits, licenses, registrations and other forms of governmental authorization. and approval as required by Applicable Law in order for Sutro to execute and deliver this Supply Agreement and to perform its obligations hereunder in accordance with all Applicable Law.

7.2.6 as of the Effective Date, to the best of Sutro's knowledge, the practice of the Sutro Platform, including the use of the Products, does not infringe any Third Party patents.

7.2.7 7.2.7 Sutro is not debarred and Sutro has not and will not use in any capacity the services of any person debarred under subsection 306(a) or (b) of the U.S. Generic Drug Enforcement Act of 1992, or other Applicable Law, nor have debarment proceedings against Sutro or any of its employees or permitted subcontractors been commenced.

7.2.8 This Supply Agreement is its legal, valid and binding obligation, enforceable against Sutro in accordance with the terms and conditions hereof, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally or by the principles governing the availability of equitable remedies.

7.2.9 As of the Effective Date, there are no claims, judgments or settlements against or owed by Sutro or its Affiliates, or pending or, to the best of Sutro's knowledge, threatened claims or litigation, relating to the Product(s).

7.3 Product Warranties. Sutro represents and warrants that:

7.3.1 Sutro's Facility and all Product (as delivered in accordance with Section 2.1 and until the expiration date thereof) supplied hereunder (and the Manufacture thereof) shall comply with this Supply Agreement, all Applicable Law (including cGMPs, if applicable),·be free from defects in material and workmanship, and meet all Specifications.

7.3.2 Title to all Product(s) provided under this Supply Agreement shall pass to SutroVax as set forth in Section 2.6, free and clear of any security interest, lien, or other encumbrance.

7.4 Disclaimer. EACH PARTY AGREES AND ACKNOWLEDGES THAT, EXCEPT AS SET FORTH IN THIS ARTICLE 7, NEITHER PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, IMPLIED OR STATUTORY, AND EACH PARTY HEREBY EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, IMPLIED OR STATUTORY, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AGAINST NON-INFRINGEMENT OR THE LIKE, OR ARISING FROM COURSE OF PERFORMANCE.





ARTICLE 8 CONFIDENTIALITY

8.1 Article 10 of the License Agreement (Confidentiality) is hereby incorporated into this Supply Agreement by reference. The terms and provisions of this Supply Agreement (which shall be the Discloser's Information of both Parties) and all other information and data, including all notes, books, papers, diagrams, documents, reports, e-mail, memoranda, visual observations, oral communications and all other data or information in whatever form, that one Party or any of its Affiliates or representatives supplies or otherwise makes available to the other Party or its Affiliates or representatives pursuant to this Supply Agreement shall be deemed Discloser's Information pursuant to Article 10 of the License Agreement.

ARTICLE 9 INDEMNIFICATION AND INSURANCE

9.1 Indemnification.

9.1.1 Indemnification by Sutro. Sutro hereby agrees, at its sole cost and expense, to defend, hold harmless and indemnify, to the extent permitted by Applicable Law, (collectively, Indemnify) SutroVax and its Affiliates and their respective agents, directors, officers and employees of such Persons and the respective successors and assigns of any of the foregoing (the SutroVax Indemnitees) from and against any and all liabilities, damages, penalties, fines, costs and expenses (including, reasonable attorneys' fees and other expenses of litigation) (collectively, Liabilities) resulting from suits, claims, actions and demands, in each case brought by a Third Party (each, a Third-Party Claim) against any SutroVax Indemnitee and arising from or occurring as a result of: [***]. Sutro's obligation to Indemnify the SutroVax Indemnitees pursuant to this Section 9.1.1 shall not apply to the extent that any such Liabilities are the result of a material breach by SutroVax of its obligations, representations, warranties or covenants under this Supply Agreement or the License Agreement or any SutroVax Indemnitee' s negligence or willful misconduct.

9.1.2 Indemnification by SutroVax. SutroVax hereby agrees to Indemnify Sutro and its agents, directors, officers and employees and the respective successors and assigns of any of the foregoing (the Sutro lndemnitees) from and against any and all Liabilities resulting from Third-Party Claims against any Sutro Indemnitee arising from or occurring as a result of: [***]. SutroVax's obligation to Indemnify the Sutro Indemnitees pursuant to this Section 9.1.2 shall not apply to the extent that any such Liabilities are the result of a material breach by Sutro of its obligations, representations, warranties or covenants under this Supply Agreement or the License Agreement or any Sutro Indemnitee's negligence or willful misconduct.





9.1.3 Procedure. To be eligible to be Indemnified hereunder, the indemnified Person shall provide the indemnifying Party with prompt written notice of the Third-Party Claim giving rise to the indemnification obligation pursuant to this Section 9.1 and the right to control the defense (with the reasonable cooperation of the indemnified Person) or settlement any such claim; provided, however, that the indemnifying Party shall not enter into any settlement that admits fault, wrongdoing or damages without the indemnified Person's written consent, such consent not to be unreasonably withheld or delayed. The indemnified Person shall have the right to join, but not to control, at its own expense and with counsel of its choice, the defense of any claim or suit that has been assumed by the indemnifying Party.

9.2 Insurance. Each Party shall procure and maintain insurance, including clinical trials and product liability insurance, adequate to cover its obligations hereunder and consistent with normal business practices of prudent companies similarly situated at all times during which any Product or Vaccine Compositions is being clinically tested in human subjects or commercially distributed or sold by such Party. It is understood that such insurance shall not be construed to create a limit of either Party's liability or indemnification obligations under this Article 9, or that the maintenance of such insurance shall not be construed to relieve either Party of its other obligations under this Supply Agreement. Each Party shall provide the other with written evidence of such insurance upon request. Each Party shall provide the other with written notice at least [***] days prior to the cancellation, non renewal or material change in such insurance.

9.3 LIMITATION OF LIABILITY. EXCEPT (I) WITH RESPECT TO ANY BREACH OF ARTICLE 8 (CONFIDENTIALITY), (II) FOR THIRD PARTY PENALTIES, COSTS AND EXPENSES AS SET FORTH IN SECTION 2.9, OR (III) FOR [***], TO THE MAXIMUM EXTENT PERMITTED BY LAW, (A) NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES, WHETHER LIABILITY IS ASSERTED IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR ANY OTHER THEORY OR FORM OF ACTION, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY THEREOF; AND (B) EACH PARTY'S TOTAL LIABILITY TO THE OTHER PARTY UNDER THIS SUPPLY AGREEMENT SHALL NOT EXCEED [***]. SUTRO'S LIABITY TO SUTROVAX FOR THIRD PARTY PENALTIES, COSTS AND EXPENSES UNDER SECTION 2.9 SHALL NOT EXCEED [***].

ARTICLE 10 TERM AND TERMINATION

10.1 Term. The term of this Supply Agreement shall begin on the Effective Date first set forth above and shall remain in effect until the later of (a) July 31, 2021 or (b) the date that the Parties enter into the Phase 3/Commercial Supply Agreement and Sutro is supplying to SutroVax each Product under the Phase 3/Commercial Supply Agreement (the Term), unless it is terminated earlier in accordance with Section 10.2.

10.2 Termination. Notwithstanding anything to the contrary in this Supply Agreement, this Supply Agreement may be terminated:

10.2.1 in its entirety or with respect to one or more Products, on a Product-by-Product basis, by mutual written consent of Sutro and SutroVax;





10.2.2 in its entirety by a Party if the other Party materially breaches any of the material terms, conditions or agreements contained in this Supply Agreement to be kept, observed or performed by the other Party, by giving the Party who committed the breach [***] days' prior written notice, unless the notified Party shall have cured the breach within such [***]-day period; and

10.2.3 in its entirety or with respect to one or more Products, on a Product-by-Product basis, by SutroVax upon [***] days' prior written notice to Sutro for any reason.

10.3 Effects of Termination. Upon the expiration of the Term or termination of this Supply Agreement, in its entirety or with respect to one or more Products, this Supply Agreement shall, except as otherwise provided in this Section 10.3 or Section 10.5, be of no further force or effect; provided, however, that (a) in the event this Supply Agreement is terminated by SutroVax pursuant to Section 10.2.3 and there are outstanding Work Orders or other purchase orders accepted by Sutro that would not be fulfilled as a result of such termination, SutroVax shall reimburse Sutro for all supplies and materials purchased by Sutro and time incurred by Sutro personnel (to the extent incurred solely for manufacture of Product for SutroVax) for the manufacture, or preparation for the manufacture, of Products for any Work Orders placed by SutroVax and any other purchase orders accepted by Sutro prior to such expiration or termination, in each case to the extent Sutro cannot otherwise reasonably mitigate such the costs and expenses of such supplies, materials and time (e.g., by use of resulting supplies, materials and work-in-progress Product for other purposes); provided that to the extent SutroVax pays for any supplies or materials, upon SutroVax's request Sutro shall promptly transfer and deliver such supplies and materials to SutroVax; and (b) if this Supply Agreement is terminated with respect to one or more Products, but not all Products, then this Supply Agreement shall continue in full force and effect with respect to the applicable Product(s) for which it is not terminated.

10.4 Nonexclusive Remedy. Exercise of any right of termination afforded to either Party under this Supply Agreement (i) shall not prejudice any other legal rights or remedies either Party have against the other in respect of any breach of the terms and conditions of this Supply Agreement, and (ii) shall be without any obligation or liability arising from such termination other than such obligations expressly arising from termination of this Supply Agreement.

10.5 Survival. Expiration of the Term or termination of this Supply Agreement (for any reason) shall not affect any accrued rights or liabilities of either Party. Article 4 (Product Testing), Article 5 (Inspection), Article 8 (Confidentiality), Article 9 (Indemnification and Insurance), Article 11 (Disputes), Article 12 (Miscellaneous), and Sections 2.2 (Transfer of Product), 2.14 (Phase 3/Commercial Supply Agreement), 2.15 (Qualification of Alternate Supplier), 2.17 (Manufacture of Custom Reagents), 3.3 (Recordkeeping), 3.4 (Taxes), 6.2 (Right of Reference; Drug Master Files), 6.3 (Recalls), 6.4 (Retention of Samples), 6.5 Regulatory Authority Inspections and Correspondence), 7.3 (Product Warranties), 7.4 (Disclaimer), 10.3 (Effects of Termination), 10.4 (Nonexclusive Remedy), and 10.5 (Survival) shall survive any expiration of the Term or termination of this Supply Agreement.





ARTICLE 11 DISPUTE RESOLUTION

11.1 Principal Contacts. Each Party will appoint an individual employed by it to serve as its Principal Contact for purposes of this Supply Agreement. Either Party may from time to time replace its Principal Contact with a different employee, but unless required due to events beyond its control, neither Party will replace its Principal Contact without at least [***] days prior notice to the other Party. The two Principal Contacts shall communicate with each other regularly during the Term as the Parties may agree or as the Principal Contacts shall mutually determine to be useful.

11.2 Escalation. The Parties intend that, to the maximum extent practicable, they shall reach decisions hereunder cooperatively through discussions among the Principal Contacts and by mutual consent of the Parties. In situations in which that does not occur, disputes or differences arising out of or in connection with this Supply Agreement shall initially be referred for review by the Parties' respective Senior Managements (as defined below). Such Senior Managements shall discuss the proposed dispute or difference, and shall meet with respect thereto if either of them believes a meeting or meetings are likely to be useful. If the Senior Managements do not resolve the dispute or difference within [***] days (or such lesser or longer period as they may agree is a useful period for their discussions), then either Party may pursue its other available remedies, consistent with this Supply Agreement. As used herein, Sutro's Senior Management means its then-current CEO, and SutroVax's Senior Management means its then-current CEO. For clarity, there shall be no obligation for any Disputed Matter arising out of Section 2.14 or 2.15 to be referred to the Senior Management to review prior to such matters being resolved by arbitration pursuant to Sections 11.3 and 11.4.

11.3 Arbitration. If the Senior Managements are not able to resolve such dispute referred to them under Section 11.2 within such [***] day period, then such dispute shall be resolved by final and binding arbitration as follows: The Parties shall select a mutually agreeable arbitrator who has significant relevant experience in the subject matter of the disputed issue and no affiliation or pre-existing relationship with either Party. If the Parties cannot agree on an arbitrator within [***] days after the end of the [***] day period referred in Section 11.2 (or with respect to a Disputed Matter described in Section 11.4, after referral by a Party of such Disputed Matter to arbitration), either Party may request the Judicial and Mediation Services (JAMS) in San Francisco, CA to appoint an arbitrator on behalf of the Parties in accordance with the commercial arbitration rules of JAMS, and the proceeding shall be conducted in accordance with JAMS rules. The arbitrator may decide any issue as to whether, or as to the extent to which, any dispute is subject to the arbitration and other dispute resolution provisions in this Supply Agreement. The arbitrator must base the award on the provisions of this Supply Agreement and must render the award in a writing which must include an explanation of the reasons for such award. Judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof. The arbitrator's fees and expenses shall be shared equally by the Parties, unless the arbitrator in the award assesses such fees and expenses against one of the Parties or allocates such fees and expenses other than equally between the Parties. Each Party shall bear and pay its own expenses incurred in connection with any dispute resolution under this Section 11.3. Notwithstanding the foregoing, either Party shall have the right, without waiving any right or remedy available to such Party under this Supply Agreement or otherwise, to seek and obtain from any court of competent jurisdiction any interim or provisional relief that is necessary or desirable to protect the rights or property of such Party, pending the selection of the arbitrator hereunder or pending the arbitrator's decision of the dispute subject to arbitration.





11.4 Baseball Arbitration. In the event (a) the Parties do not enter into a Phase 3/Commercial Supply Agreement as described in Section 2.14 or (b) the Parties do not enter into a Transfer Addendum as described in Section 2.15 (Disputed Matter), then upon either Party's request with respect to the Disputed Matter in clause (a) or SutroVax's request with respect to the Disputed Matter in clause (b), such Disputed Matter shall be resolved by binding arbitration conducted pursuant to Section 11.3, except that the procedures for the conduct of such arbitration shall be as follows:

11.4.1 Each Party shall provide the arbitrator and the other Party with a written report setting forth its position with respect to the substance of such Disputed Matter and a full draft Phase 3/Commercial Supply Agreement or Transfer Addendum, as applicable, and may submit a revised report, position and draft Phase 3/Commercial Supply Agreement or Transfer Addendum, as applicable, to the arbitrator within [***] days of receiving the other Party's report and draft Phase 3/Commercial Supply Agreement or Transfer Addendum, as applicable. If so requested by the arbitrator, each Party shall make oral and/or other written submissions to the arbitrator in accordance with procedures to be established by the arbitrator; provided that other Party shall have the right to be present during any oral submissions. The arbitrator shall select one of the Party's draft Phase 3/Commercial Supply Agreement or Transfer Addendum, as applicable, as his or her decision, based on what is most reasonable and equitable to each of the Parties under the circumstances and reflective of reasonable and customary terms in the biopharmaceutical industry for agreements of this type and most closely reflects the Parties' intent as expressed in this Supply Agreement and the License Agreement, and shall not have the authority to render any substantive decision other than to so select the draft Phase 3/Commercial Supply Agreement or Transfer Addendum, as applicable, of Sutro or SutroVax (as initially submitted, or as revised in accordance with the foregoing, as applicable). For clarity, it is understood that the Parties intend the arbitration under this Section 11.4 to be a baseball arbitration type proceeding; and the arbitrator may fashion such detailed procedures as the arbitrator considers appropriate to implement this intent. Notwithstanding anything to the contrary, in no event shall the Phase 3/Commercial Supply Agreement or Transfer Addendum contain any provision granting to SutroVax or its Affiliates or Sublicensees any right to obtain or use any Sutro Core Know-How.

11.4.2 In any arbitration under this Section 11.4, the arbitrator and the Parties shall use their best efforts to resolve such Disputed Matter within [***] days after the selection of the arbitrator, or as soon thereafter as is practicable.

ARTICLE 12 MISCELLANEOUS

12.1 Expenses. Except as otherwise expressly provided herein, each Party shall bear its own costs, fees and expenses incurred by such Party in connection with this Supply Agreement.

12.2 Licenses and Permits. Each Party shall, at its sole cost and expense, maintain in full force and affect all necessary licenses, permits, and other authorizations required by Applicable Law in order to carry out its duties and obligations hereunder.





12.3 Force Majeure. No Party shall be liable for a failure or delay in performing any of its obligations under this Supply Agreement if, but only to the extent that such failure or delay is due to causes beyond the reasonable control of the affected Party, including: (a) acts of God; (b) fire, explosion, or unusually severe weather; (c) war, invasion, riot, terrorism, or other civil unrest; (d) governmental laws, orders, restrictions, actions, embargo or blockages; (e) national or regional emergency; (f) strikes or industrial disputes at a national level which directly impact the affected Party's performance under this Supply Agreement; or (g) other similar cause outside of the reasonable control of such Party (Force Majeure); provided that the Party affected shall promptly notify the other of the Force Majeure condition and shall use reasonable efforts to eliminate, cure or overcome any such causes and resume performance of its obligations as soon as possible. If the performance of any obligation of a Party under this Supply Agreement is delayed owing to such a Force Majeure for any continuous period of more than [***] days, the other Party shall have the right to terminate this Supply Agreement.

12.4 Neither Party may assign or transfer this Supply Agreement, including by merger, operation of law, or otherwise, without the other Party's prior written consent (which shall not be withheld unreasonably) except each Party may assign this Supply Agreement without the other Party's consent in the case of assignment or transfer to a Third Party that succeeds to all or substantially all of the assigning Party's business and assets relating to the subject matter of this Supply Agreement, whether by sale, merger, operation of law or otherwise. Any attempted assignment by a Party in violation of this Section without the written consent of the other Party will be null and void. Except as above limited, this Supply Agreement is binding upon and will inure to the benefit of each of the Parties, its successors and assigns. Without limiting the foregoing, in the event that a Party is acquired, the acquiring Party shall agree in writing to abide by the terms of this Supply Agreement. Sutro agrees that if it assigns the License Agreement to any successor as allowed under section 15.1 of the License Agreement, it will also assign to such successor this Supply Agreement in accordance with this Section 12.4.

12.5 This Supply Agreement incorporates the Exhibits referenced herein. This Supply Agreement, together with the License Agreement, constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the Parties hereto with respect to its subject matter. To the extent of any conflict between this Agreement and the License Agreement, the License Agreement shall govern and control.

12.6 All notices, requests or other communication provided for or permitted hereunder shall be given in writing and shall be hand delivered or sent by confirmed facsimile, reputable courier or by registered or certified mail, postage prepaid, return receipt requested, to the address set forth below, or to such other address of which either Party may inform the other in writing. Notices will be deemed delivered on the earliest of transmission by facsimile, actual receipt or [***] days after mailing as described herein.

If to Sutro: Sutro Biopharma, Inc. 310 Utah Ave., Suite 150 South San Francisco, CA 94080 Attention: Chief Executive Officer





If to SutroVax: SutroVax, Inc. 353 Hatch Dr. Foster City, CA 94404 Attention: Chief Executive Officer

12.7 This Supply Agreement may be amended, modified or waived only in a writing signed by the Party or Parties to be bound thereby.

12.8 If any provision of this Supply Agreement shall be held invalid, illegal or unenforceable, such provision shall be enforced to the maximum extent permitted by law and the Parties' fundamental intentions hereunder, and the remaining provisions shall not be affected or impaired.

12.9 Nothing herein contained shall constitute this a joint venture agreement and nothing herein shall constitute any Party as a partner, principal or agent of any other, this being an agreement between independent contracting entities. Except as expressly set forth herein, no Party shall have the authority to bind any other in any respect whatsoever to Third Parties. Except as provided herein, nothing contained in this Supply Agreement shall be construed as conferring any right on any Party to use any name, trade name, trademark or other designation of any other Party hereto, unless the express, written permission of such other Party has been obtained.

12.10 This Supply Agreement has been submitted to the scrutiny of, and has been negotiated by, both Parties and their counsel, and shall be given a fair and reasonable interpretation in accordance with its terms, without consideration or weight being given to any such term's having been drafted by any Party or its counsel.

12.11 This Supply Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of California, without regard to any conflict of laws rules to the contrary.

12.12 Each Party acknowledges that the other Party may likely suffer irreparable harm from such Party's breach or threatened breach of this Agreement and the other Party, in such cases, would therefore be entitled, without waiving any other right or remedy available to, to injunctive relief (including specific performance) without the requirement to post a bond, provided the waiver by such Party of the other Party's requirement to post a bond shall expire on the Change of Control of the other Party, and each party agrees that the arbitrator selected under Section 11.3 shall have the power to grant such injunctive relief (or order specific performance). The Parties shall comply with any such injunctive relief (including specific performance) ordered by the arbitrator and agree that such order may, to the extent not precluded by applicable law, be enforceable as a final award in any court of competent jurisdiction.

12.13 This Supply Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Facsimile and other electronically scanned signatures shall have the same effect as their originals.

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IN WITNESS WHEREOF, the Parties have caused this Supply Agreement to be executed by their respective duly authorized officers as of the Effective Date, each copy of which will for all purposes be deemed to be an original. SUTRO BIOPHARMA, INC. SUTROVAX, INC.

By: /s/ William J. Newell By: /s/ Grant E. Pickering Name: William J. Newell Name: Grant E. Pickering Title: CEO Title: President & CEO





SCHEDULE 1

PRODUCTS AND PRICE

[***]





SCHEDULE2

SPECIFICATIONS

{6 pages omitted}

[***]





SCHEDULE3

INITIAL ORDER

[***]





SCHEDULE 2.15.1

REPRESENTATIVE CMOS

[***] 
Question: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?

SOLUTION:
. Each Party shall provide the other with written notice at least [***] days prior to the cancellation, non renewal or material change in such insurance.