Document:

Collaboration Agreement

	[*]	indicates that a confidential portion of the text of this agreement has been omitted. The non-public information has been filed separately with the Securities and Exchange
Commission. 

 EXHIBIT 10.59 
 COLLABORATION AGREEMENT 
 This Collaboration Agreement (this “Agreement”) is dated
as of May 22, 2006 (the “Effective Date”) and is made by and between Schering Corporation, acting through its Schering-Plough Research Institute division, a New Jersey corporation having offices at 2000 Galloping Hill Road,
Kenilworth, New Jersey 07033 (hereinafter “SPRI”); and XOMA (US) LLC, a Delaware limited liability company having offices at 2910 Seventh Street, Berkeley, California 94710 (hereinafter “XOMA”). SPRI and XOMA are
sometimes referred to herein individually as a “Party” and collectively as the “Parties.” 
 R E C I T A
L S 
 WHEREAS, SPRI and XOMA are each in the business of, among other things, discovering and developing products for the prevention or
treatment of human diseases and conditions; 
 WHEREAS, SPRI (a) has technology for and expertise in the identification and validation
of targets for use in the discovery of such products, and has identified and validated, and continues to identify and validate, target antigens for use in the discovery of antibodies potentially useful for such purposes, and (b) has personnel
with expertise in the development of such products; 
 WHEREAS, XOMA has technology for and expertise in the discovery, optimization,
development and manufacturing of antibodies potentially useful for such purposes; 
 WHEREAS, SPRI and XOMA are interested in collaborating
(a) in the discovery of antibodies to target antigens identified and validated by SPRI and (b) in the development of such antibodies for use in the prevention or treatment of human diseases and conditions; and 
 WHEREAS, it is anticipated that XOMA will have primary responsibility for research and development activities relating to the target antigens that are
the subject of the Parties’ collaboration from antibody discovery through Investigational New Drug application filing(s); 
 NOW,
THEREFORE, in consideration of the premises and of the covenants herein contained, the Parties hereto mutually agree as follows: 
 ARTICLE
1 
 DEFINITIONS 
 For
purposes of this Agreement, the terms defined in this Article 1 shall have the respective meanings specified below: 
 1.1 “Adverse
Drug Reaction” means any untoward medical occurrence in a patient or subject who is administered a Collaboration Product, whether or not considered related to the Collaboration 

 
Product, including any undesirable sign (including abnormal laboratory findings of clinical concern), symptom or disease temporally associated with the use
of such Collaboration Product. 
 1.2 “Affiliate” means any corporation, company, partnership, joint venture and/or firm
that controls, is controlled by or is under common control with a Party to this Agreement. For purposes hereof, “control” means (a) in the case of a corporate entity, direct or indirect ownership of more than fifty percent
(50%) of the stock or shares entitled to vote for the election of directors; (b) in the case of a non-corporate entity, direct or indirect ownership of more than fifty percent (50%) of the equity interests with the power to direct the
management and policies of such non-corporate entity; or (c) possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the entity in question (whether through ownership of securities or
other ownership interests, by contract or otherwise). 
 1.3 “Annual Maintenance Fee” has the meaning specified in
Section 7.2 hereof. 
 1.4 “Antibody” means any immunoglobulin molecule whether in monospecific or any other form and
shall include, without limitation, immunoglobulin fragments, such as Fv, Fab, F(ab’) and single-chain antibodies. 
 1.5
“Antibody Product” means any composition of matter or article of manufacture consisting essentially of an Antibody (a) alone or (b) integrally associated with a composition of matter or article of manufacture (including
without limitation conjugates bound to a toxin, label or other moiety) providing therapeutic, half-life, safety or other advantages to the Antibody. 
 1.6 “Antibody Related Claims” has the meaning specified in Section 9.2.1 hereof. 
 1.7
“Bankruptcy Code” has the meaning specified in Section 14.3 hereof. 
 1.8 “Batch” means a specific
volume, produced in a 130L or larger size bioreactor, of cell culture fluid processed through to bulk drug substance that is intended to have a uniform character and quality, within specified limits, and that is produced according to a single
manufacturing order during the same cycle of manufacture. 
 1.9 “Batch Price” means the price associated with the
production of each Batch (excluding internal analytical testing and Third Party costs as provided in Section 7.6.2), which, for [*], shall be as follows: [*] for each 130L scale Batch; [*] for each 500L scale Batch; and [*] for each 2,750L
scale Batch. Batch Prices shall be adjusted annually by XOMA, [*]. 
 1.10 “BLA” means a Biologics Licensing Application (as
defined in the FDC Act) and any other equivalent marketing authorization application or other license, registration or application seeking approval from a Regulatory Authority to market a Collaboration Product in the Field in the Territory.

 1.11 “Cancer” means a condition or disease primarily characterized by uncontrolled growth or spread of abnormal and
anaplastic cells, metastases, neoplasm, malignant tumors and/or invasion by abnormal and anaplastic cells into tissues regardless of cause. For the avoidance of doubt, Cancer shall not include inflammation, infection or conditions characterized
solely by hypertrophy or hyperplasticity of normal cells. 
 1.12 “cGMP Guidelines” means the FDA’s current good
manufacturing practice guidelines as promulgated under the FDC Act and 21 C.F.R. (parts 210 and 211), and as further defined by FDA guidance documents, as amended from time to time. 
  

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 1.13 “Chiron Agreement” has the meaning specified in Section 1.14 hereof.

 1.14 “Chiron Exclusivity Period” shall mean the exclusivity period provided for in Section 3.2 of the May 26,
2005 Research, Development and Commercialization Agreement between Chiron Corporation and XOMA (the “Chiron Agreement”). As of the Effective Date, the Chiron Exclusivity Period expires on February 27, 2007. 
 1.15 “Collaboration” has the meaning specified in Section 2.1.1 hereof. 
 1.16 “Collaboration Committee” means the Joint Steering Committee, JRDC or Joint Patent Committee. “Collaboration Committees”
means any combination of the foregoing. 
 1.17 “Collaboration Product” means a Program Antibody that has been selected by
the Joint Steering Committee and SPRI as a lead or backup development candidate for further development under the Collaboration. 
 1.18
“Collaboration Target” means any Proposed Target that has been selected for Research and Development in accordance with Section 2.2 hereof. 
 1.19 “Combination Product” has the meaning specified in Section 1.58 hereof. 
 1.20
“Commercially Reasonable and Diligent Efforts” means the carrying out of obligations or tasks by a Party in a sustained manner using good faith commercially reasonable and diligent efforts, which efforts shall be consistent with the
exercise of prudent scientific and business judgment in accordance with either (a) the efforts such Party devotes to products or research and development projects of similar scientific and commercial potential, or (b) if such Party does
not have and has not had any such products or projects, the efforts a peer company in the biopharmaceutical industry would devote, in accordance with industry standards and practices, to products or research and development projects of similar
scientific and commercial potential, and subject in any event to any Pre-existing Obligations of such Party properly disclosed to the other Party in accordance herewith. For the avoidance of doubt, matters or events beyond the reasonable control of
a Party, such as delays or actions taken by a Regulatory Authority, that result in delays in an R&D Program shall not constitute a lack of diligence hereunder. 
 1.21 “Confidential Information” means any information and data received by a Party (the “Receiving Party”) from the other Party or its Affiliates (the “Disclosing
Party”) in connection with this Agreement or the Mutual Confidentiality Agreement (For Common Interest Privileged Discussions) effective as of March 6, 2006 between the Parties (including, without limitation, all information disclosed
by the Parties under Article 2 hereof and any research, testing, clinical, regulatory, marketing or other scientific or business information, plans, or data pertaining to any Collaboration Product of the Disclosing Party). Notwithstanding the
foregoing, Confidential Information shall not include any part of such information or data: 
 (a) which is or becomes public
knowledge (through no fault of the Receiving Party); or 
 (b) which is made available to the Receiving Party by an
independent third Party not under an obligation of confidentiality with the Disclosing Party (and such lawful right can be demonstrated by the Receiving Party’s written records); or 
  

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 (c) which is already rightfully in the Receiving Party’s possession at the time of
receipt from the Disclosing Party (and such prior possession can be demonstrated by the Receiving Party’s written records); or 
 (d) which is independently developed by an employee of the Receiving Party and/or its affiliates without the aid, application or use of confidential information disclosed by the Disclosing Party (and such independent development can be
demonstrated by the Receiving Party’s written records). 
 [*] 
 1.22 “Contract Quarters” has the meaning specified in Section 1.23 hereof. 
 1.23
“Contract Year” means, with respect to a particular Collaboration Target, (a) with respect to the first Contract Year, the period beginning on the date such Collaboration Target is accepted into the Collaboration (or, in the
case of the first Collaboration Target, the Effective Date) and ending on December 31 of the calendar year in which such acceptance takes place (or, in the case of the first Collaboration Target, December 31, 2006) (such period, the
“First Contract Year”), and (b) with respect to each subsequent Contract Year, the twelve (12) month period beginning on the day following the end of the First Contract Year and each succeeding twelve (12) month
period thereafter. Each Contract Year (other than the First and last Contract Years, as applicable) shall be divided into four (4) “Contract Quarters” comprised of successive three (3) month periods. In the First Contract
Year, the first Contract Quarter shall begin on the first day of the First Contract Year and shall end on the last day of the calendar quarter in which the relevant Collaboration Target is accepted into the Collaboration (or, in the case of the
first Collaboration Target, June 30, 2006). 
 1.24 “Control” or “Controlled” means, with respect to
any (a) material, document, item of information, method, data or other Know-How or (b) Patent Right or other intellectual property right, the possession (whether by ownership or license, other than by a license granted pursuant to this
Agreement) by a Party or its Affiliates of the ability to grant to the other Party access, ownership, a license and/or a sublicense as provided herein under such item or right without violating the terms of any agreement or other arrangement with
any Third Party as of the time such Party would first be required hereunder to grant the other Party such access, ownership, license or sublicense. 
 1.25 “Cover,” “Covered” or “Covering” means, with respect to a Patent Right, that, but for rights granted to a person or entity under such Patent Right, the practice by such person or
entity of an invention claimed in such Patent Right would infringe a Valid Claim included in such Patent Right, or in the case of a Patent Right that is a patent application, would infringe a pending claim in such patent application if it were to
issue as a patent. 
 1.26 “Disclosing Party” has the meaning specified in Section 1.21 hereof. 
 1.27 “Effective Date” means the date specified in the initial paragraph of this Agreement. 
 1.28 “EMEA” means the European Medicines Agency, or any successor thereto. 
 1.29 “Escrow Agent” means an independent Third Party consultant hired by XOMA with whom XOMA has deposited a list of Excluded Targets,
which XOMA may update from time to time, and who shall notify SPRI which, if any, Proposed Targets are Excluded Targets. 
 1.30
“Event of Default” means an event described in Section 13.3 hereof. 
  

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 1.31 [*] 
 1.32 “Excluded Target” means a Target that XOMA has elected, in its sole discretion, to exclude from consideration for inclusion in the Collaboration and is identified on the list of Excluded Targets
deposited with the Escrow Agent prior to such Target being designated as a Proposed Target by SPRI. 
 1.33 “FDA” means the
United States Food and Drug Administration, or any successor thereto. 
 1.34 “FDC Act” means the United States Food, Drug
and Cosmetic Act (or any successor thereto), as amended, and the rules and regulations promulgated thereunder. 
 1.35
“Field” means the diagnosis, prevention, control and treatment of any human disease or condition excluding, until the expiration of the Chiron Exclusivity Period, Cancer. Upon expiration of the Chiron Exclusivity Period, Cancer
shall immediately be included within the Field. 
 1.36 “First Commercial Sale” means the first sale for use or consumption
by the general public of a Collaboration Product in a country after Regulatory Approval has been obtained in such country. For the avoidance of doubt, First Commercial Sale shall not include the sale of any Collaboration Product for use in clinical
trials or for compassionate use prior to Regulatory Approval. 
 1.37 “First Contract Year” has the meaning specified in
Section 1.23 hereof. 
 1.38 “FTE” means a full-time equivalent person-year [*] of scientific, medical, technical,
regulatory or managerial work on or directly related to R&D Plan activities or Manufacturing Plan activities, as applicable, calculated on a calendar monthly fractional effort basis for each individual engaged in such activities. The fraction of
an FTE attributable to an individual’s scientific, medical, technical, regulatory or managerial work on or directly related to such activities in any given calendar month shall be determined as follows: (a) the numerator of such fraction
shall equal the actual hours worked by such individual on or directly related to R&D Plan activities or Manufacturing Plan activities, as applicable (which number of hours shall be adjusted on a pro-rata basis in the case of exempt employees, to
the extent necessary, such that the individual in question is not in any case allocating more of his or her time in such calendar month than there are total “monthly working hours” in such month to (i) R&D Plan activities and
Manufacturing Plan activities, (ii) working activities other than R&D Plan activities and Manufacturing Plan activities (e.g., work on other projects, administrative duties, and other working activities not allocable to the
Collaboration) and (iii) weekday holidays, vacation, medical leave and other paid-time-off, collectively), and (b) the denominator of such fraction shall be [*] hours. The numerator shall exclude paid-time-off and administrative and other
non-allocable activities. For purposes of the foregoing, “monthly working hours” for a given calendar month shall be equal to (x) the total number of weekdays (including weekday holidays) in such calendar month multiplied by
(y) [*] hours. 
 1.39 “FTE Costs” means the amounts determined by multiplying (a) the number of FTEs allocated by
a Party during the relevant time period, subject to any limitations set forth in the applicable R&D Plan or Manufacturing Plan and associated budget(s) or otherwise established by the Joint Steering Committee, by (b) the applicable FTE
Rates. 
 1.40 “FTE Rate” means, for each functional area, the rate set forth below corresponding to such functional area,
to be adjusted annually (beginning in January of 2007) for inflation using the latest available U.S. Producer Price Index for finished goods, less food and energy (WPUSOP3500) as published by the Bureau of Labor Statistics as a simple percentage. In
addition, the Joint Steering Committee shall discuss and approve, as needed, further adjustments to FTE Rates every [*] on a prospective basis 

  

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beginning in January of [*]. In the event the Joint Steering Committee is unable to reach consensus on any adjustment pursuant to the immediately preceding
sentence, then SPRI shall have the deciding vote with respect thereto but shall, in reaching its decision, give due consideration to the FTE rates reflected in XOMA’s then most recent comparable agreements of similar scope and financial terms
with Third Parties. The FTE Rate is intended to embody costs (i) directly attributable to such Party’s supervisory functions, service functions, occupancy costs, and its payroll, information systems, or purchasing functions, all of which
are in direct support of the development, manufacture, use and/or sale of an applicable Collaboration Product, and (ii) allocated to departments based on space occupied or headcount or other activity-based methods; but shall not include any
costs attributable to general corporate activities including but not limited to executive management, investor relations, human resources, business development, legal affairs, finance and employee costs associated with stock option plans and other
equity incentive plans as permitted by applicable accounting rules. For the avoidance of doubt, the services of administrative employees and support services necessary for the conduct of the Collaboration are considered part of general and
administrative services overhead and, as such, the costs for such services have been included in the calculation of the fully burdened FTE Rates listed herein. [*] Establishment of annual FTE Rates for functional areas not set forth in the table
below shall be the responsibility of the JRDC. Such rates will be used to determine the R&D Plan and related budget for the applicable annual period. 
  

					
	 Functional Area
	  	Annual
FTE Rate	 
	 Pre-Clinical
	  	$	[	*]
	 Clinical
	  	$	[	*]
	 Regulatory
	  	$	[	*]
	 Pilot Plant (Process Development)
	  	$	[	*]
	 Quality
	  	$	[	*]
	 Technical Development (Cell Line Work and Assay Development)
	  	$	[	*]
	 Project Management
	  	$	[	*]

 1.41 “GAAP” means United States generally accepted accounting principles, as they
exist from time to time, consistently applied. 
 1.42 “Human EngineeringTM Technology” means the Human
EngineeringTM technology Controlled by XOMA, as more fully described in Schedule 1.42. 
 1.43 “IND” means an
Investigational New Drug application filed with the U.S. Food and Drug Administration or a similar application for the clinical testing of a Collaboration Product in human subjects filed with a foreign Regulatory Authority. 
 1.44 “Indemnitee” has the meaning specified in Section 12.4 hereof. 
 1.45 “Indemnitor” has the meaning specified in Section 12.4 hereof. 
 1.46 “Initial Royalty Period” means, for each Collaboration Product the period commencing with the First Commercial Sale thereof and
continuing on a country-by-country basis until [*]. 
  

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 1.47 “Joint Patent Committee” has the meaning specified in Section 3.1.3 hereof.

 1.48 “Joint Project Team” has the meaning specified in Section 3.1.2 hereof. 
 1.49 “Joint Steering Committee” has the meaning specified in Section 3.1.1 hereof. 
 1.50 “JRDC” has the meaning specified in Section 3.1.2. 
 1.51 “Know-How” means any and all know-how, trade secrets, data, processes, techniques, procedures, compositions, materials, devices,
methods, formulas, protocols, and research, pre-clinical and clinical data and information, including any and all chemical, biochemical, toxicological, and scientific research information, whether in written, electronic, graphic or video form or any
other form or format. Know-How shall not include Patent Rights. 
 1.52 “Laws” means all laws, statutes, rules, regulations,
ordinances and other pronouncements having the effect of law of any federal, national, multinational, state, provincial, county, city or other political subdivision, domestic or foreign. 
 1.53 “LIBOR” has the meaning specified in Section 7.12 hereof. 
 1.54 “Manufacturing” or “Manufacture” means all activities set forth in the applicable Manufacturing Plan associated
with the production, processing, formulating, filling, finishing and packaging of Collaboration Products in the Field, including pilot plant process development; pilot plant stability testing; manufacturing process development; manufacturing process
and assay validation; manufacturing scale-up; preclinical, clinical and commercial manufacture; and analytical development, quality assurance and quality control activities directly related to any of the preceding activities. 
 1.55 “Manufacturing Costs” means, with respect to the Manufacture of a Collaboration Product as set forth in the applicable
Manufacturing Plan, the [*] internal costs of XOMA, which costs shall be determined based on FTE Costs or Batch Price, and the [*] costs billed to XOMA by Third Parties, in each case consistent with and directly related to the budget set forth in
the applicable Manufacturing Plan incurred in pilot plant process development; manufacturing process development; manufacturing process improvement; manufacturing scale-up; the development of manufacturing standard operating procedures, batch
records, and quality assurance and quality control methods and procedures; and the time of manufacturing personnel for preparing, submitting, reviewing or developing data or information for the purpose of a drug master file or for submission to a
Regulatory Authority. 
 1.56 “Manufacturing Plan” has the meaning specified in Section 5.1.1 hereof. 
 1.57 “Master Cell Bank” means an aliquot of a single pool of cells which generally has been prepared from the selected cell clone under
defined conditions, dispensed into multiple containers and stored under defined conditions. The single pool of cells will be generated from a cell line having agreed upon characteristics, including [*], established prior to the initiation of
preparation of such Master Cell Bank pursuant to the relevant R&D Program, or as subsequently agreed to by the Joint Steering Committee, based on relevant cGMP and GLP standards for [*]. 
 1.58 “Net Sales” means, with respect to each country of the world, the gross amount invoiced by SPRI, or its Affiliates or sublicensees,
on sales of a Collaboration Product to a Third Party end user, and exclusive of intercompany transfers or sales, less the actually granted or incurred reasonable and customary deductions from such gross amounts including: (i) normal and
customary trade, cash and quantity discounts, allowances and credits; (ii) credits or allowances for damaged goods, returns or rejections and 

  

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retroactive price reductions; (iii) sales or similar taxes (including duties or other governmental charges levied on, absorbed or otherwise imposed
including without limitation value added taxes or other governmental charges otherwise measured by the billing amount, when included in billing); (iv) freight, postage, shipping, customs duties and insurance charges; (v) charge back
payments and rebates (or equivalents thereof) granted to managed health care organizations or to federal, state and local governments, their agencies, and purchasers and reimbursers or to trade customers, including but not limited to, wholesalers
and chain and pharmacy buying groups; and (vi) commissions paid to Third Parties other than sales personnel and sales representatives or sales agents. 
 In the event the Collaboration Product is sold as part of a Combination Product (as defined below), the Net Sales from the Combination Product, for the purposes of determining royalty payments, will be determined by
[*]. 
 In the event that the average sale price of the Collaboration Product can be determined but the average sale price of the other
active compounds or active ingredients cannot be determined, Net Sales for purposes of determining royalty payments will be calculated by [*]. If the average sale price of the other active compounds or active ingredients can be determined but the
average price of the Collaboration Product cannot be determined, Net Sales for purposes of determining royalty payments will be calculated by [*]. 
 In the event that the average sales price of both the Collaboration Product and the other active compounds or active ingredients in the Combination Product cannot be determined, the Net Sales of the Collaboration Product shall be negotiated
in good faith by the Parties [*]. 
 As used above, the term “Combination Product” means any Collaboration Product sold in
conjunction with any other active component(s) (whether packaged together or in the same therapeutic formulation). 
 Free samples of
Collaboration Product and the disposition of Collaboration Product for, or the use of Collaboration Product in, pre-clinical or clinical (Phase 1 – 3) trials or other market-focused (Phase 4) trials in which Collaboration Product is provided to
patients without any payment shall not result in any Net Sales. 
 1.59 “Patent Prosecution” has the meaning specified in
Section 9.2.1 hereof. 
 1.60 “Patent Rights” means all existing patents and patent applications and all patent
applications hereafter filed and patents hereafter issued, including, without limitation, any continuations, continuations-in-part, divisionals, provisionals or any substitute applications, any patent issued with respect to any such patent
applications, any reissue, reexamination, renewal or extension (including any supplemental protection certificate) of any such patent, and any confirmation patent or registration patent or patent of addition based on any such patent, and all foreign
counterparts of any of the foregoing. 
 1.61 “Phage Display License Agreements” means the license agreements listed in
Schedule 1.61. 
 1.62 “Phase 1 Trial” means a human clinical trial in any country that is intended to initially
evaluate the safety and/or pharmacological effect of a Collaboration Product in subjects as more fully described in 21 C.F.R. 312.21(a), or its foreign equivalent. For purposes of this Agreement, “commencement of a Phase 1 Trial” for
a Collaboration Product means the first introduction of such Collaboration Product into a human patient in a Phase 1 Trial. 
  

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 1.63 “Phase 2 Trial” means a human clinical trial in any country that is intended to
initially evaluate the effectiveness of a Collaboration Product for a particular indication or indications in patients with the disease or indication under study as more fully described in 21 C.F.R. 312.21(b), or its foreign equivalent. For purposes
of this Agreement, “commencement of a Phase 2 Trial” for a Collaboration Product means the first introduction of such Collaboration Product into a human patient in a Phase 2 Trial. 
 1.64 “Phase 3 Trial” means a pivotal human clinical trial, generally undertaken after proof of concept has been demonstrated (whether by
trend, biomarker or otherwise), in numbers of patients anticipated to be adequately powered, in any country, the results of which could be used to establish safety and efficacy of a Collaboration Product as a basis for a BLA as more fully described
in 21 C.F.R. 312.21(c) or its foreign equivalent. For purposes of this Agreement, “commencement of a Phase 3 Trial” for a Collaboration Product means the first introduction of such Collaboration Product into a human patient in a Phase 3
Trial. In the event of a Phase 2/3 trial, initiation of Phase 3 shall be deemed to have occurred upon a decision by SPRI to continue enrollment for the pivotal portion of such trial. 
 1.65 “Plan” means an R&D Plan or Manufacturing Plan, as the case may be. 
 1.66 “Pre-existing Obligations” means the obligations of SPRI or XOMA, as the case may be, existing under agreements in effect prior to
the Effective Date with respect to SPRI Background Technology or XOMA Background Technology, in each case as disclosed to the other Party in writing (a) prior to the execution of this Agreement, (b) if related to a Proposed Target, in
accordance with Section 2.2, and/or (c) if related to a Program Antibody, at the time such Program Antibody is first disclosed to the JRDC or otherwise promptly upon a Party’s realization that such obligation is relevant to the
activities to be carried out in the course of the Collaboration, as applicable. 
 1.67 “Program Antibody” means an Antibody
Product that (a) is first identified or discovered by XOMA in the course of the Collaboration, (b) (i) is Controlled by SPRI, (ii) either is in SPRI’s or any of its Affiliates’ possession as of the Effective Date or is
discovered or acquired by SPRI or any of its Affiliates during the Program Term but outside the conduct of the Collaboration, and (iii) is designated a Program Antibody by the Joint Steering Committee, or (c) the Parties agree to acquire
from a Third Party, and, in the case of clauses (a), (b) and (c), selectively binds to and acts through a Collaboration Target; provided, however, that in no event shall an Antibody Product that is subject to one or more
Pre-existing Obligations become a Program Antibody unless such designation is affirmatively agreed to by the Joint Steering Committee after disclosure of the nature of such Pre-existing Obligation(s) by the applicable Party, such agreement not to be
unreasonably withheld or delayed. 
 1.68 “Program Director” has the meaning specified in Section 3.2 hereof.

 1.69 “Program Materials” means (a) any Program Antibodies and (b) any materials other than Program Antibodies
Controlled by a Party or jointly by the Parties that are first identified or discovered in the conduct of the Collaboration and during the applicable Program Term. 
 1.70 “Program Patent Rights” means any Patent Rights Controlled by a Party or jointly by the Parties that Cover any Program Technology first invented, discovered, made, conceived, reduced to practice
or otherwise licensed or acquired, or Program Materials first identified or discovered, during the applicable Program Term. 
 1.71
“Program Technology” means any and all Know-How and inventions Controlled by a Party or jointly by the Parties that are first invented, discovered, made, conceived, reduced to practice or otherwise licensed or acquired in the
conduct of the Collaboration and during the applicable Program 

  

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Term; provided that Know-How or inventions that constitute an improvement to the Human EngineeringTM Technology (including any Know-How or
inventions otherwise meeting this definition and constituting an improvement thereto) shall not be included in Program Technology. For clarity, Program Technology excludes Program Materials. 
 1.72 “Program Term” has the meaning specified in Section 2.1.2 hereof. 
 1.73 “Proposed Targets” has the meaning specified in Section 2.2.2 hereof. 
 1.74 “R&D Costs” means costs and expenses that are incurred after the Effective Date by either Party in performing Research and
Development activities consistent with and directly related to an applicable R&D Plan and associated budget, including: 
 (a) the costs of internal scientific, medical, technical, and/or managerial personnel engaged in such efforts, which costs shall be determined based on FTE Costs, unless another basis is otherwise agreed upon by the Parties in writing; and

 (b) all [*] costs and expenses incurred, including payments to investigators, contract research organizations, and
consultants, for preclinical studies, pharmacodynamic or pharmacokinetic studies, molecular biology, toxicology studies, data management, statistical design, programming and analysis, clinical studies, clinical trial management, document preparation
and review, subject recruitment and reimbursement, insurance, contract negotiation and travel; 
 (c) fees and costs incurred
in connection with the preparation, filing and submission of INDs, BLAs and other regulatory filings with Regulatory Authorities (including pharmacoeconomic studies and any other clinical studies reasonably necessary for Regulatory Approval by
relevant Regulatory Authorities to sell such Collaboration Product in each country); 
 (d) Collaboration related costs
incurred under any Third Party licenses entered into prior to the Effective Date and disclosed to the other Party prior to the Effective Date or in accordance with Section 2.8; 
 (e) the [*] costs and expenses of clinical supplies, lab supplies, animals and other direct charges for such efforts as set forth in the
R&D Plan, including: (i) costs and expenses incurred to purchase and/or package comparator or combination drugs or devices; and (ii) costs and expenses of disposal of clinical samples; 
 (f) the [*] costs of capital equipment incurred for Collaboration projects [*]; and 
 (g) any other costs included in the budget for such R&D Plan. 
 1.75 “R&D Plan” means the plan relating to a particular Collaboration Target for each Contract Year prepared, developed and approved
in accordance with Section 2.2.5 or Section 4.2.1, as applicable. An outline of the tasks to be considered for inclusion in each R&D Plan is set forth in Schedule 1.75. 
 1.76 “R&D Program” means the Research and Development activities relating to a particular Collaboration Target and to be conducted
in accordance with an applicable R&D Plan. 
 1.77 “Receiving Party” has the meaning specified in Section 1.23
hereof. 
  

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 1.78 “Regulatory Approval” means any and all approvals (including any applicable
governmental price and reimbursement approvals), licenses, registrations, or authorizations of any federal, national, multinational, state, provincial or local regulatory agency, department bureau or other governmental entity that are necessary for
the manufacture, use, storage, import, transport, promotion, marketing and sale of a Collaboration Product in the Field in a country or group of countries. 
 1.79 “Regulatory Authority” means any governmental authority in a country or region that regulates the manufacture or sale of pharmaceutical products, including the FDA and the EMEA, and any
successors thereto. 
 1.80 “Representatives” has the meaning specified in Section 3.8.2.2 hereof. 
 1.81 “Research and Development” means the conduct of activities relating to the discovery of Antibodies for Collaboration Targets, the
identification, characterization, selection, optimization and research of Program Antibodies and Collaboration Products and the conduct of all tests, clinical and other studies and other activities (including test method development, toxicology
studies, statistical analysis and report writing, preclinical and other testing, packaging and regulatory affairs, product approval and registration activities) set forth in, or required to obtain the information set forth in, applicable R&D
Plan(s). Research and Development may include without limitation (a) the discovery of Program Antibodies that selectively bind to and act through Collaboration Targets, (b) the development of assays for Program Antibodies to, inter
alia, confirm the activity of such Program Antibodies or Collaboration Target, (c) the Human EngineeringTM of non-human Antibodies that selectively bind to and act through such Collaboration Target, and (d) the performance of
affinity maturation on such Program Antibodies, in each case with the objective of identifying Program Antibodies that meet the criteria for designation as Collaboration Products. 
 1.82 “Specifications” means, with respect to any Collaboration Product, the applicable written specifications for such Collaboration
Product in effect at a particular time including, but not limited to, specifications provided in any Regulatory Approval for such Collaboration Product. 
 1.83 “SPRI Background Technology” means any and all Know-How and Patent Rights Controlled by SPRI as of the Effective Date or that comes to be Controlled by SPRI during the Program Term (other than
the Program Technology) and, in particular, any such Patent Rights and Know-How Covering any Collaboration Target, Program Antibody or Collaboration Product, for purposes of conducting Research and Development or Manufacturing activities in
connection with the Collaboration. For the avoidance of doubt, the Parties acknowledge that, to the extent any SPRI Background Technology is covered by a license or other agreement with a Third Party, such SPRI Background Technology shall, for all
purposes of this Agreement, be subject to the limitations, restrictions and financial obligations established in such Third Party license or agreement, with SPRI being responsible for the payment of all payments due thereunder. 
 1.84 “Target” means a gene and the products encoded by such gene, including, without limitation, (a) any partial or full-length DNA
sequence from such gene (including any mutant or polymorphic forms thereof), (b) any RNA sequence (including any post-transcriptionally modified variants thereof) encoded by any such gene, (c) any peptide, polypeptide or protein (including
any post-translationally modified variants thereof) encoded by any such gene, (d) any derivatives or fragments of any of the foregoing, and/or (e) any species variants or homologs of any of the foregoing. Each Target shall be identified by
the full-length cDNA sequence of the gene and/or the amino acid sequence of the encoded protein or, in the event the gene has more than one splice variant form, by the full-length cDNA sequence of at least one splice variant form of such gene and/or
the amino acid sequence of the encoded protein (with all such splice variants being included within the definition of Target). 
  

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 1.85 “Territory” means all of the countries of the world. 
 1.86 “Upfront Fee” has the meaning specified in Section 7.1 hereof. 
 1.87 “Third Party” means any person or entity other than SPRI, XOMA and their respective Affiliates. 
 1.88 “Valid Claim” means a claim of an issued and unexpired patent which has not been held permanently revoked, unenforceable or invalid
by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal and that is not admitted to be invalid or unenforceable through reissue, disclaimer or otherwise.

 1.89 [*] 
 1.90 “XOMA
Background Technology” means any and all Know-How and Patent Rights Controlled by XOMA as of the Effective Date, or acquired or developed by XOMA during and in connection with the Collaboration (other than the Program Technology), that are
[*] for (a) research related to Collaboration Target(s) or (b) Research and Development, Manufacture or commercialization of Program Antibody(ies) or Collaboration Product(s). For the avoidance of doubt, the Parties acknowledge that, to
the extent any XOMA Background Technology is covered by a license or other agreement with a Third Party, such XOMA Background Technology shall, for all purposes of this Agreement, be subject to the limitations, restrictions and financial obligations
established in such Third Party license or agreement, with SPRI being responsible for the payment of all Collaboration- related payments due thereunder. XOMA Background Technology excludes the Human EngineeringTM Technology. 
 ARTICLE 2 
 COLLABORATION OVERVIEW

 2.1 General. 
 2.1.1 Objectives. The Parties intend to carry out a program in which SPRI and XOMA will collaborate to identify and characterize Program Antibodies and to carry out the Research and Development and
Manufacturing of Antibody Products that act through Collaboration Targets for use in the Field (the “Collaboration”), consistent with the objectives set forth in the applicable Plan(s). It is intended that the Collaboration will be
conducted as a unified collaborative effort with activities by the Parties carried out primarily at each Party’s respective facilities, and this intent shall be reflected in the applicable Plan(s). 
 2.1.2 Program Term. Each R&D Program shall have its own term, which shall commence on the date the R&D Program is initiated
and shall continue until SPRI assumes full responsibility for the relevant Collaboration Product(s) (each, a “Program Term”). In no event shall XOMA be obligated, without its prior approval, to carry out activities beyond those
listed in Section 4.1 and Schedule 1.75 as activities which it is anticipated XOMA may conduct. 
 2.1.3 Certain
Restrictions. 
 2.1.3.1 Once a Proposed Target is disclosed to and accepted by XOMA as a Collaboration Target (as
provided in Section 2.2), neither Party will conduct work on its own, or will work with any Third Party (except as provided in Section 2.4.3), on any preclinical research program to identify antibodies directed to such Collaboration Target
for 

  

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so long as SPRI is funding XOMA’s activities with respect to such Collaboration Target under the Collaboration. For purposes hereof, “funding
XOMA’s activities with respect to such Collaboration Target under the Collaboration” does not include Manufacturing related activities (or required or requested regulatory or similar follow-up due to XOMA having conducted prior activities
pursuant to this Agreement) beyond those activities enumerated in Schedule 1.75. After SPRI has stopped such funding, either Party may work on such Collaboration Target on its own or with a Third Party under the following conditions, provided
that such work does not use any Confidential Information of the other Party, Program Materials or Program Technology except as otherwise permitted hereby: 
 (a) for a period of [*], neither Party will conduct an internal preclinical antibody research program (except SPRI may continue the program(s) initiated in collaboration with XOMA) with respect to such Collaboration
Target nor solicit any Third Party to sponsor such a program; thereafter, either Party may conduct its own preclinical antibody research program with respect to such Collaboration Target and/or solicit one or more Third Parties to sponsor such a
program; or 
 (b) following [*], in the event that either Party receives an unsolicited request from a Third Party to
initiate a preclinical antibody research program with respect to such Collaboration Target, it will be free to do so. 
 The
foregoing provisions of this Section 2.1.3.1 shall not apply [*]. 
 2.1.3.2 SPRI agrees that, during the Chiron
Exclusivity Period, it will not conduct any research or development in the field of Cancer with respect to any Antibodies or Antibody Products provided by XOMA, including Program Antibodies. Notwithstanding the foregoing, SPRI may use models of its
own choosing to demonstrate the therapeutic activity for an Antibody or Antibody Product that will not be used in the field of Cancer during the Chiron Exclusivity Period. [*] 
 2.2 Selection of Collaboration Targets. 
 2.2.1 Initial Target. SPRI has designated [*] as the initial Target, and XOMA has accepted such Target into the Collaboration, thereby making it a Collaboration Target and the subject of the first R&D
Program. In addition, the Parties acknowledge that [*] additional Proposed Targets have been disclosed to the Escrow Agent and have cleared XOMA’s conflict clearance procedure, but have not been designated by SPRI for inclusion in the
Collaboration pursuant to Section 2.2.2 and therefore are not yet Collaboration Targets. 
 2.2.2 Proposal of
Additional Targets. As used herein, “Proposed Targets” means Targets identified and validated by SPRI as having potential application in the Field and which are to be considered as candidates for Collaboration Targets. During
the period [*], SPRI may request XOMA’s consent (which consent shall not be unreasonably withheld) to submit additional Proposed Targets to the Escrow Agent, for consideration as proposed Collaboration Targets, but shall have no obligation to
submit any particular Target for consideration as a Proposed Target. 
 2.2.3 Exclusion of Targets from Consideration.
Upon receipt of XOMA’s written consent as provided in Section 2.2.2, SPRI shall submit the identity of the Proposed Target to the Escrow Agent in confidence for comparison against XOMA’s list of Excluded Targets, which 

  

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XOMA may update from time to time. In the event such Proposed Target matches any Excluded Target on such list, the Escrow Agent shall promptly so notify each
Party in writing. In the event the Proposed Target does not match any Excluded Target, the Escrow Agent shall promptly so notify each Party in writing and SPRI shall disclose the identity of the Proposed Target to XOMA. For the avoidance of doubt,
the Escrow Agent shall not disclose the identity of the Proposed Target to XOMA. All fees and expenses of the Escrow Agent related to the performance of services under this Agreement shall be borne by SPRI. 
 2.2.4 Disclosure of Additional Information. In the event the Escrow Agent notifies the Parties that a Proposed Target does not
match any Excluded Target, SPRI shall promptly disclose to XOMA [*]. 
 2.2.5 Designation of Collaboration Targets.
Within [*] following the submission by SPRI to XOMA of the information required pursuant to Section 2.2.4(a) – (c), XOMA shall give SPRI written notice of its rejection of or its intention, subject to mutual agreement between the Parties
on an initial R&D Plan as provided below, to accept such Proposed Target as a Collaboration Target. If XOMA indicates that it intends to accept the Proposed Target as a Collaboration Target, then within [*] of such indication of intent to
accept, the Parties shall prepare and agree (or conclude that they cannot agree) on an initial R&D Plan for such Collaboration Target. If such initial R&D Plan is mutually agreed within such period, then such Proposed Target shall become a
Collaboration Target. XOMA may elect to reject such Proposed Target in the event that [*]. In the event XOMA rejects such Proposed Target or the Parties cannot agree on an initial R&D Plan, then such Proposed Target shall not become a
Collaboration Target. In the event XOMA accepts such Proposed Target as a Collaboration Target, then the Parties shall proceed with the Research and Development of Antibody Products directed to such Collaboration Target in accordance with the
applicable Plans. In the event that XOMA rejects a Proposed Target or the Parties cannot agree on an initial R&D Plan under this Section 2.2.5, XOMA shall not initiate an internal preclinical antibody research program directed to such
rejected Target, directly or indirectly, or solicit any Third Party to sponsor such a program, for a period of [*] after the date of rejection under the following conditions: [*]. 
 2.3 [*] 
 2.4 Conduct of
Collaboration. 
 2.4.1 Efforts. Each Party shall use Commercially Reasonable and Diligent Efforts to conduct the
activities of the Collaboration that are assigned to it in the then-applicable Plan(s), and each shall devote sufficient resources to carry out such respective activities. 
 2.4.2 Resources. Over the course of the Collaboration, tasks will be allocated between the Parties in the best interest of the
Collaboration. The Parties agree to commit to the Collaboration the personnel necessary to meet their respective responsibilities set forth in each Plan. 
 2.4.3 Subcontractors. As necessary and in furtherance of the Collaboration, either Party may enter into Research and Development-related agreements or subcontracts in accordance with this Section 2.4.3;
provided that [*]. 
 2.4.4 Reports. Each Party shall submit written quarterly reports to the Joint Steering
Committee, as may be required by the then-current Plan(s), detailing its activities under the Collaboration. 
  

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 2.5 Collaboration Records. In order to protect the Parties’ Patent Rights and Know-How under
U.S. law in respect of any inventions conceived or reduced to practice during or as a result of the Collaboration, each Party agrees to maintain a policy or procedures for its employees to record and maintain all data and information developed
during the Collaboration in such a manner as to enable the Parties to use such records to establish the earliest date of invention and/or diligence to reduction to practice. At a minimum, the policy or procedures shall require such individuals to
record all inventions generated by them in standard laboratory notebooks or other suitable means that are dated and corroborated by non-inventors on a regular, contemporaneous basis. 
 2.6 Disclosure of Collaboration Results. Subject to restrictions imposed by a Party’s confidentiality obligations to any Third Party with
respect to SPRI Background Technology or XOMA Background Technology, each Party will disclose to the JRDC and to the Joint Patent Committee all Program Technology and Program Materials that are discovered, invented or made by such Party in the
course of the Collaboration and that are useful in or relate to the Collaboration, including without limitation information regarding Collaboration Targets, Program Antibodies and Collaboration Products and uses thereof and the results of all
Research and Development studies. Such Program Technology and Program Materials will be promptly disclosed to the JRDC and to the Joint Patent Committee, with meaningful discoveries or advances being communicated as promptly as practicable after
such information is obtained or its significance is appreciated. [*] Any information disclosed pursuant to this Section 2.6 may be used by the other Party solely for the purposes of the Collaboration or as otherwise expressly permitted in this
Agreement. 
 2.7 Material Transfer. In order to facilitate the Collaboration, either Party may provide to the other Party certain
Program Materials Controlled by the supplying Party for use by the other Party in furtherance of the Collaboration. All such Program Materials shall be considered the Confidential Information of both Parties and shall be subject to the restrictions
in Article 10. Except as otherwise provided under this Agreement or in accordance with the applicable Plan(s), all such Program Materials delivered to the other Party shall remain the sole property of the supplying Party, shall be used only in
furtherance of the Collaboration and solely under the control of the other Party and its Affiliates, shall not be used or delivered to or for the benefit of any Third Party without the prior written consent of the supplying Party and shall not be
used in research or testing involving human subjects, in each case except as may be provided in the applicable R&D Plan. The Program Materials supplied under this Section 2.7 must be used with prudence and appropriate caution in any
experimental work, since not all of their characteristics may be known. THE PROGRAM MATERIALS ARE PROVIDED “AS IS” AND WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR OF FITNESS FOR ANY PARTICULAR PURPOSE OR ANY WARRANTY THAT THE USE OF THE MATERIALS WILL NOT INFRINGE OR VIOLATE ANY PATENT OR OTHER PROPRIETARY RIGHTS OF ANY THIRD PARTY. 
 2.8 [*] 
 ARTICLE 3 
 COLLABORATION MANAGEMENT 
 3.1
Collaboration Committees. 
 3.1.1 Joint Steering Committee. As soon as practicable after the Effective Date,
XOMA and SPRI shall establish a Joint Steering Committee (the “Joint Steering Committee”) comprised of three (3) representatives from each of XOMA and SPRI, each of whom shall have experience and seniority sufficient to enable
him or her to make decisions on behalf of the Party 

  

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he or she represents within the scope of the responsibilities of the Joint Steering Committee as provided herein. 
 3.1.2 Joint Research and Development Committee. As soon as practicable after the Effective Date, XOMA and SPRI shall establish a
Joint Research and Development Committee (the “JRDC”) comprised of three (3) representatives from each of XOMA and SPRI, each of whom shall have experience and seniority sufficient to enable him or her to make decisions on
behalf of the Party he or she represents within the scope of the responsibilities of the JRDC as provided herein. From time to time during the Program Term, the JRDC may establish one or more Joint Project Teams (each, a “Joint Project
Team”) to implement various aspects of any R&D Plan. Such teams shall be governed in the same manner and subject to the relevant requirements as set forth herein for the JRDC. 
 3.1.3 Joint Patent Committee. As soon as practicable after the Effective Date, XOMA and SPRI shall establish a Joint Patent
Committee (the “Joint Patent Committee”) comprised of an equal number of representatives designated by each of XOMA and SPRI, each of whom shall have experience and seniority sufficient to enable him or her to make decisions on
behalf of the Party he or she represents within the scope of the responsibilities of the Joint Patent Committee as provided herein. 
 3.2
Program Directors. Each Party shall appoint one of its designees on the Joint Steering Committee and/or the JRDC to serve as a program director (each, a “Program Director”) with responsibility for overseeing the day-to-day
activities of the Parties with respect to the Collaboration and for being the primary point of contact between the Parties with respect to the Collaboration. 
 3.3 Replacement of Collaboration Committee Representatives and Program Directors. Each Party shall be free to replace its representative members of any Collaboration Committee and its Program Director with new
appointees who have authority to act on behalf of such Party, on notice to the other Party. 
 3.4 Responsibilities of Joint Steering
Committee. The Joint Steering Committee shall be responsible for overseeing and directing the Parties’ interaction and performance of their respective obligations under this Agreement. The respective members of the Joint Steering Committee
shall be responsible for obtaining all necessary approvals from the managements of their respective companies for the decisions they will be making as members of the Joint Steering Committee. Without limiting the generality of the foregoing, its
duties shall include: 
 (a) preparing such procedures as may be necessary for the operation of the Joint Steering Committee,
JRDC and Joint Patent Committee, and other committees the Joint Steering Committee decides to establish to assure the efficient operation of the Collaboration; 
 (b) approving strategy for the overall Research and Development and Manufacturing of Collaboration Products in the Field in the Territory
and for all other activities conducted by the Parties hereunder; 
 (c) reviewing and approving the annual R&D Plans
proposed by the JRDC and approving the budget therefor and any modifications thereto as recommended by the JRDC; 
 (d)
reviewing and approving the Manufacturing Plans proposed by the applicable Party and approving the budget therefor and any modifications thereto as recommended by such Party; 
  

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 (e) overseeing the implementation of the Plans and allocation of resources and other
activities in support of the Collaboration; 
 (f) establishing criteria for selection of Collaboration Products; 

(g) selecting Collaboration Products, including a lead Program Antibody and one or more backup Program Antibodies for each
Collaboration Target; 
 (h) facilitating the transfer of technology between the Parties through the JRDC; 
 (i) upon the recommendation of the JRDC, making decisions with respect to (i) the preclinical and clinical Development of
Collaboration Products, and (ii) the in-licensing of applicable technology; 
 (j) evaluating the performance of the JRDC
and Joint Patent Committee, and on a quarterly basis at a minimum, evaluating the progress of the R&D Program(s) against the applicable R&D Plan(s), including their respective timelines; 
 (k) resolving matters within the responsibilities of the JRDC and Joint Patent Committee as to which the members of such Collaboration
Committee are unable to reach a consensus, and dissolving each such Collaboration Committee when its duties under the Collaboration are complete; and 
 (l) addressing issues and resolving differences that may arise between the Parties. 
 3.5
Responsibilities of JRDC. The JRDC shall be responsible for preparing for approval by the Joint Steering Committee and implementing the applicable annual R&D Plan, allocation of resources and other activities in support of the
Collaboration, with the objective of expeditiously identifying Program Antibodies meeting the criteria for designation as Collaboration Products. Without limiting the generality of the foregoing, its duties shall include; 
 (a) establishing criteria for the selection of Program Antibodies; 
 (b) selecting Program Antibodies for characterization and optimization in the conduct of the Collaboration; 
 (c) monitoring, reviewing and reporting on the progress of the Collaboration; 
 (d) considering modifications to the applicable R&D Plan budget(s) as may be necessary or appropriate and, to the extent agreed upon
by the JRDC, recommending that the Joint Steering Committee approve such modifications; 
 (e) proposing and overseeing the
Research and Development strategy of Collaboration Products; 
 (f) overseeing the filing of INDs with the FDA pursuant to
Section 4.3.1; 
 (g) establishing advisory committees comprised of scientific, medical and/or other appropriate experts
not affiliated with either Party to advise the JRDC on matters related to the Research and Development of Collaboration Products; 
  

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 (h) with advice from the Joint Patent Committee, evaluating the need for licenses from
Third Parties, and determining their utility in the Collaboration (if any), and making the appropriate recommendation(s) to the Joint Steering Committee; 
 (i) providing all appropriate information regarding the progress of the R&D Plan(s) to the Joint Steering Committee in advance of each quarterly Joint Steering Committee meeting; and 
 (j) performing such other activities as are contemplated by the terms of this Agreement. 
 The JRDC shall report its activities and make proposals to the Joint Steering Committee at least once each Contract Quarter, but more frequently as
appropriate. 
 3.6 Responsibilities of Joint Patent Committee. The Joint Patent Committee shall be responsible for forming and
implementing the intellectual property strategy of the Collaboration, with the objective of maximizing the patent and other protections for Program Antibodies and Collaboration Products afforded by applicable intellectual property Laws. The Joint
Patent Committee shall report its activities and make proposals to the Joint Steering Committee at least once each Contract Quarter, but more frequently as appropriate. 
 3.7 Meetings of Collaboration Committees. As applicable, the Joint Steering Committee and the JRDC shall meet at least once every Contract Quarter, and more frequently as the Parties deem appropriate, on such
dates and at such times as the Parties shall agree, on [*] written notice to the other Party unless such notice is waived by the Parties. The other Collaboration Committees shall meet at a frequency to be mutually agreed by the Parties when such
committees are created. The first meeting of the Joint Steering Committee shall take place as soon as [*], but no later than [*], after the Effective Date. Each Collaboration Committee may convene or be polled or consulted from time to time by means
of telecommunications, videoconferences or correspondence, as deemed necessary or appropriate by the Parties. To the extent that meetings are held in person, they shall alternate between the offices of the Parties unless the Parties otherwise agree.

 3.8 Decisions. 
 3.8.1 Quorum; Voting. A quorum for a meeting of a Collaboration Committee shall require the presence of at least one SPRI member (or designee) and at least one XOMA member (or designee) in person or by telephone. All decisions made
or actions taken by a Collaboration Committee shall be made unanimously by its members, with the SPRI members cumulatively having one vote and the XOMA members cumulatively having one vote. 
 3.8.2 Dispute Resolution. 
 3.8.2.1 In the event that unanimity cannot be reached by either the JRDC or the Joint Patent Committee with respect to a matter that is a subject of their respective decision-making authority, then the matter shall be
referred for further review and resolution to the Joint Steering Committee. In the event that unanimity cannot be reached by the Joint Steering Committee with respect to a matter that is a subject of its decision-making authority, then SPRI shall
have the deciding vote with respect to such matter, except as otherwise provided in this Section 3.8.2. 
  

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 3.8.2.2 In the event that unanimity cannot be reached by the Joint Steering Committee
with respect to a matter that is a subject of its decision-making authority [*], the matter shall be referred for further review and resolution to the Chief Executive Officer of XOMA, or such other similar position designated by XOMA from time to
time, and the President of SPRI, or such other similar position designated by SPRI from time to time (the “Representatives”). The Representatives shall use reasonable efforts to resolve the matter within [*] after the matter is
referred to them. 
 3.8.2.3 Any dispute over (i) the interpretation of the meaning of any term or condition of this
Agreement or (ii) [*] may be referred by either Party to a Third Party arbitrator or arbitrators, in accordance with the following procedures, whose decision shall be non-binding. The Parties shall attempt to mutually agree upon a single
independent Third Party arbitrator (who shall be a professional with appropriate experience in the subject matter at issue in such dispute) within [*] of providing written notice of an election to pursue arbitration hereunder. If the Parties are
unable to mutually agree upon one such person, then each Party shall appoint one independent Third Party professional with appropriate experience in the subject matter at issue in such disagreement within [*] after the date of the arbitration notice
and such person(s) shall select a single independent Third Party arbitrator, who shall be a professional with appropriate experience in the subject matter at issue in such disagreement. Each Party shall present all relevant information supporting
its position on the matter in dispute and all other information as such Party reasonably desires regarding such disagreement. Within [*] after the date of the arbitration notice, the arbitrator shall provide written notice to the Parties regarding
his or her determination regarding such disagreement. If the Parties cannot resolve any such matter within [*] following the arbitrator’s provision of written notice to the Parties regarding his or her determination regarding such disagreement,
the Parties shall be free to pursue all available recourse both at law and in equity with respect to the applicable matter(s). 
 3.8.2.4 Notwithstanding anything herein to the contrary, SPRI shall not have the deciding vote if: [*]. 
 3.9 Minutes. As
soon as reasonably practicable after each Collaboration Committee meeting, a member of such Collaboration Committee designated by the Party hosting such meeting shall prepare and distribute draft minutes of the meeting (which shall provide a summary
of the discussions at the meeting and a list of any actions, decisions or determinations approved by such Collaboration Committee) and shall revise such draft to reflect any comments thereon received from other members of such Collaboration
Committee. Minutes in final form shall be circulated to all members of such Collaboration Committee sufficiently in advance of the next meeting to allow review and approval prior to the next meeting of such Collaboration Committee. Final minutes
(including the actions, decisions or determinations included therein) shall be approved no later than the date of the next such meeting. 
 ARTICLE 4 
 RESEARCH AND DEVELOPMENT PROGRAMS 
 4.1 General. The Research and Development of Antibodies for Collaboration Targets, Program Antibodies (including their identification,
characterization, selection and optimization) and Collaboration Products will be pursued jointly by the Parties under the direction of the JRDC in accordance with annual R&D Plans. Each Party shall use Commercially Reasonable and Diligent
Efforts to conduct those 

  

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Collaboration activities for which it has responsibility. It is anticipated that key activities to be conducted by XOMA may include the following: [*].

 4.2 R&D Plans. 
 4.2.1 The JRDC shall be responsible for preparation of, and the Joint Steering Committee shall be responsible for approval of, the R&D Plan for each Collaboration Target for every Contract Year (other than the
First Contract Year) during the applicable Program Term at least [*] prior to the commencement of such Contract Year. The R&D Plan relating to the first Collaboration Target for the First Contract Year shall be prepared by the Parties and
approved by the JRDC within [*] after the Effective Date. The first R&D Plan relating to any other Collaboration Target shall be prepared and agreed to in accordance with Section 2.2.5. Prior to the approval of any R&D Plan (or as soon
as reasonably practicable following any change or proposed change to an approved R&D Plan that would affect XOMA’s proposal regarding discovery and/or optimization technologies), XOMA shall identify to SPRI in writing the discovery and/or
optimization technology or technologies that XOMA proposes to use to discover and/or optimize Antibodies in accordance with such R&D Plan (or change or proposed change thereto). In addition, XOMA’s in-house patent counsel shall discuss with
SPRI’s designated intellectual property counsel XOMA’s counsel’s then current knowledge about any Third Party patent issues related to such technology, including but not limited to any Third Party patent or patent application that
contains claims which, if granted or issued, are or would be infringed by XOMA’s use of such technology or which could provide a basis for an allegation of infringement by either Party in operating under the terms of this Agreement. [*] In the
first Contract Year in which the Parties designate a Collaboration Product, the JRDC shall revise the initial R&D Plan for such Collaboration Product to include the preclinical Research and Development activities for such Collaboration Product
[*]. The responsibility of the JRDC for preparing annual R&D Plans shall terminate upon the completion of all Research and Development activities under all R&D Plans. 
 4.2.2 Each annual R&D Plan shall be in writing and shall set forth with reasonable specificity the Research and Development
objectives, priorities, activities, milestones, budgets, personnel requirements, other resources and allocations of responsibilities between the Parties for the period covered by such annual R&D Plan in a manner consistent with the terms of this
Agreement. The R&D Plans shall cover all aspects of Research and Development (including without limitation the discovery of Antibodies for Collaboration Targets and the identification, characterization, selection and optimization of Program
Antibodies prior to their designation as Collaboration Products) and shall include, with reasonable specificity, the Research and Development activities to be performed by each Party and the Research and Development activities, if any, to be
performed by subcontractors. The JRDC may agree on modifications, and recommend that the Joint Steering Committee approve such modifications, to the provisions of any R&D Plan at any time. 
 4.2.3 [*] 
 4.3 Regulatory
Matters. 
 4.3.1 Regulatory Responsibility. The preparation, filing, prosecution and maintenance of INDs and other
regulatory documents required to be filed with any Regulatory Authority with regard to each Collaboration Product will be in the name of SPRI. With respect to each Collaboration Product, SPRI shall oversee, monitor and coordinate all regulatory
actions, communications and filings with and submissions to Regulatory Authorities, including filings and submissions of supplements and amendments thereto, with respect to each Collaboration Product, shall 

  

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give XOMA a reasonable opportunity for prior review of and comment on all such substantive communications, filings and submissions and shall incorporate
those of such comments as can reasonably be incorporated into such communications, filings and submissions. Ownership and control of all establishment licenses and other Regulatory Approvals shall be, to the extent possible, in the name of SPRI, or
as otherwise agreed by the Joint Steering Committee. 
 4.3.2 Regulatory Meetings and Correspondence. SPRI shall be
responsible for interfacing, corresponding and meeting with Regulatory Authorities with respect to such Collaboration Product, and XOMA will promptly refer any contacts or questions from Regulatory Authorities to SPRI. XOMA will be entitled to
attend all meetings and, if reasonably practicable, telephone conferences with Regulatory Authorities. 
 4.3.3 Reporting
Adverse Drug Reactions. After the Effective Date and prior to the first IND filing for a Collaboration Product, the Parties will develop and mutually agree upon safety data exchange procedures governing the collection, investigation, reporting,
and exchange of information concerning Adverse Drug Reactions, product quality and product complaints involving Adverse Drug Reactions, sufficient to permit each Party to comply with its legal obligations, [*]. The safety data exchange procedures
will be promptly updated if required by changes in the Law or by agreement between the Parties. SPRI will be responsible for reporting all Adverse Drug Reactions to the appropriate Regulatory Authorities in the applicable country(ies) or region(s)
in accordance with applicable Laws. 
 4.3.4 DMF Reference Right. XOMA hereby grants SPRI a right of reference to any
Drug Master File or similar filing that XOMA may make relating to [*] for any Collaboration Product and upon request shall provide a letter of access to such filing allowing regulatory review of such filing by the FDA in conjunction with SPRI’s
submissions to the FDA with respect to such Collaboration Product. 
 ARTICLE 5 
 MANUFACTURING AND SUPPLY 
 5.1
Designation of XOMA as Manufacturing Party. 
 5.1.1 Generally. XOMA shall have the first right to Manufacture
and supply (itself or through one or more Third Parties) all quantities of each Collaboration Product necessary for Research and Development through the [*] of such Collaboration Product. XOMA shall be responsible for implementing all aspects of
Manufacturing under the direction and oversight of the Joint Steering Committee, as set forth in Section 3.4, and in accordance with a manufacturing plan proposed by XOMA for the applicable Collaboration Product(s) in the Field in the Territory
and subject to review and approval by the Joint Steering Committee. Such manufacturing plan shall describe the specific Manufacturing activities to be undertaken by XOMA, shall include a general description of the personnel and other resources of
XOMA to be used in the implementation thereof and shall set forth a unanimously agreed budget for such activities (each, as may be modified or amended and approved from time to time in accordance with this Agreement, a “Manufacturing
Plan”). [*] 
 5.1.2 [*] 
  

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 5.2 Supply. 
 5.2.1 Product Supply. XOMA shall use Commercially Reasonable and Diligent Efforts to supply (subject to Section 5.1) all
requirements of Collaboration Product consistent with the Plan(s) [*] for such Collaboration Product. 
 5.2.2 Certain
Covenants. XOMA covenants that, during the term of this Agreement, it will (a) use Commercially Reasonable and Diligent Efforts to avoid shortfalls of supply based on the forecasts provided to it in the Manufacturing Plan(s), shall promptly
notify SPRI in the event it becomes aware of any probable shortfall and shall use Commercially Reasonable and Diligent Efforts to remedy any shortfall of supply as soon as practicable; (b) be responsible for manufacturing, filling, packaging
and warehousing of the Collaboration Product in conformity with applicable cGMP Guidelines and the Specifications, and in accordance, in all material respects, with all other applicable Laws; (c) maintain or cause to be maintained all records
necessary and appropriate to demonstrate compliance with applicable cGMP Guidelines; and (d) grant SPRI the right, on reasonable advance notice and during normal business hours during the term of this Agreement, to have its personnel or
representatives with quality control or quality assurance responsibilities inspect and audit the facilities and operations of XOMA directly related to the manufacture and supply of the Collaboration Product in order to confirm compliance with the
covenants contained in this Section 5.2.2; provided that the foregoing inspection and audit right of SPRI shall be limited to [*] such visit per calendar year and [*] such personnel or representatives per visit, [*]. 
 5.3 Manufacturing Technology Transfer. Unless the Parties otherwise agree in writing during the applicable Program Term, as soon as reasonably
practicable following XOMA providing to SPRI [*], XOMA shall, at SPRI’s expense, make a complete Manufacturing technology transfer to SPRI, an Affiliate or a Third Party designee, of all Program Materials, Program Technology and all other
information and materials necessary for SPRI to Manufacture the Collaboration Product on its own using the developed process. The Third Party designee shall be subject to XOMA’s prior approval, which shall not be unreasonably withheld. XOMA
shall provide reasonable assistance to SPRI, at SPRI’s expense, to enable SPRI to begin Manufacturing the Collaboration Product [*]. 
 ARTICLE 6 
 GRANTS OF RIGHTS; COVENANTS 
 6.1 Grants of Licenses. 
 6.1.1 By XOMA. Subject to the terms of this Agreement
and any applicable Pre-existing Obligations, during the term of this Agreement, XOMA hereby grants to SPRI, in the Field and within the Territory: 
 (a) an exclusive right and license, with the right to sublicense, under XOMA’s interests in any Program Patent Rights and Program Technology relating to a Program Antibody, to make, have made, use, sell and
import such Program Antibody; 
 (b) an exclusive right and license, without the right to sublicense except as provided in
clause (c), under XOMA’s interests in any Program Patent Rights directed to one or more Antibodies binding to and reactive with the same Target as a Program Antibody (including compositions containing, methods of using and methods of making
such Antibodies), to make, have made, use, sell and import such related Antibody(ies); provided, 

  

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that any such related Antibodies that are not Collaboration Products shall be subject to (i) [*] royalty due XOMA [*] for the term of [*], and
(ii) milestone payments equal to [*] payable upon achievement of each event set forth in Section 7.3 achieved subsequent to SPRI’s initiation of a program with respect to such related Antibody, [*]; 
 (c) SPRI may sublicense the rights granted in this clause (b) but only in conjunction with a sublicense under clause (a) above
of rights to a Program Antibody; 
 (d) a non-exclusive right and license, with the right to sublicense, under the XOMA
Background Technology to make, have made, use, sell and import Program Antibodies; 
 (e) a non-exclusive right and license,
with the right to sublicense, under any Patent Rights and Know-How Controlled by XOMA Covering any control antibodies provided by XOMA for the sole purpose of using such control antibodies to evaluate the Program Antibodies; and 
 (f) an exclusive right and license, with the right to sublicense, under any Program Patent Rights or other Patent Rights and Know-How
Controlled by XOMA Covering each antibody-producing cell line created by XOMA that expresses a Program Antibody provided by XOMA, for the sole purpose of using such cell line to produce the applicable Program Antibody. 
 For the avoidance of doubt, the above license grants do not include the Human EngineeringTM Technology, although to the extent XOMA uses the Human
EngineeringTM Technology in the Collaboration, patent claims arising out of XOMA’s activities in connection with the Collaboration directed to Human EngineeredTM Program Antibodies are included in the license grant set forth in clause
(a) above. 
 6.1.2 By SPRI. Subject to the terms of this Agreement and any applicable Pre-existing Obligations,
during the Program Term, SPRI hereby grants to XOMA, in the Field and within the Territory, a non-exclusive right and license, without any right to sublicense (except as set forth below), under the SPRI Background Technology, to conduct activities
in connection with the Collaboration. Such right and license shall include the right to grant sublicenses to Affiliates of XOMA and to Third Parties hired by XOMA to conduct work on the Collaboration and that are approved by, and under terms and
conditions that are approved by, the Joint Steering Committee. Any such sublicense shall be set forth in a written agreement containing confidentiality, non-use and ownership of intellectual property provisions consistent with and no less
restrictive than those contained herein; shall be subject and subordinate to the terms and conditions of this Agreement; and a copy of such sublicense agreement shall be submitted to the Joint Steering Committee for approval prior to execution. XOMA
shall provide SPRI with a copy of each sublicense agreement promptly after executing the same; provided, however, that subject to the exceptions set forth in Section 1.21, each such sublicense agreement shall be Confidential
Information of XOMA. 
 6.2 No Grant of Other Technology or Patent Rights. Except as otherwise expressly provided in this Agreement,
under no circumstances shall a Party hereto, as a result of this Agreement, obtain any ownership interest in or other right to any technology, know-how, patents, patent applications, gene or genomic sequence data or information, products, or
biological materials of the other Party, including items owned, controlled or developed by, or licensed to, the other Party, or transferred by the other Party to said Party, at any time pursuant to this Agreement. 
  

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 6.3 [*] 
 ARTICLE 7 
 FINANCIAL TERMS 
 7.1 Upfront Fee. For each Proposed Target that becomes a Collaboration Target, SPRI shall pay XOMA a non-refundable fee in cash of [*] (each, an
“Upfront Fee”) within [*] of acceptance by XOMA of such Proposed Target for Research and Development in accordance with Section 2.2.5 hereof. The Parties acknowledge that, because the first Target has been accepted into the
Collaboration, the first Upfront Fee is due within [*] of execution of this Agreement by the Parties. 
 7.2 Annual Maintenance Fee.
For each R&D Program then in effect, SPRI shall pay XOMA a non-refundable fee in cash of [*] (each, an “Annual Maintenance Fee”) on the second anniversary of the Effective Date and on each anniversary of the Effective Date
thereafter [*]. 
 7.3 Milestones. For each R&D Program (in the case of the first milestone event set forth below) or for each
Program Antibody (in the case of each of the remaining milestone events set forth below), SPRI shall pay XOMA the following milestone payments upon the occurrence of each of the following events: 
  

							
	  	  	 Event
	  	Payment
Amount	 
	 1.
	  	Delivery to SPRI of at least one (1) Program Antibody that meets the success criteria established at the initiation of the related R&D Program	  	$	[*	]
	 2.
	  	Successful establishment of Master Cell Bank (i.e., successfully passes FDA Points to Consider and ICH guidelines for cell bank testing)	  	$	[*	]
	 3.
	  	First patient dosed in first indication	  	$	[*	]
	 4.
	  	First patient dosed in a Phase 2 Trial in first indication	  	$	[*	]
	 5.
	  	First patient dosed in a Phase 3 Trial in first indication	  	$	[*	]
	 6.
	  	First patient dosed in a Phase 3 Trial in second indication or for purposes of label expansion	  	$	[*	]
	 7.
	  	Submission of BLA or equivalent in first indication	  	$	[*	]

  

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	  	 	 Event
	  	Payment
Amount	 
	 8.
	 	Submission of BLA or equivalent in second indication or for purposes of label expansion	  	$	[*	]
	 9.
	 	First to occur of Regulatory Approval in the United States or Regulatory Approval and pricing approval outside the United States in first indication	  	$	[*	]
	 10.
	 	First to occur of Regulatory Approval in the United States or Regulatory Approval and pricing approval outside the United States in second indication or of label expansion	  	$	[*	]

 [*] 
 7.4 Royalty. For each Collaboration Product, SPRI shall pay XOMA a royalty of [*] of Net Sales of such Collaboration Product during the Initial Royalty Period. After the Initial Royalty Period with respect to a particular
Collaboration Product has ended, and for a period of time of up to [*] thereafter, a [*] royalty of [*] will apply in each country where the royalty referred to in the immediately preceding sentence has been paid, provided that (a) the
full period during which a royalty shall be payable in such country shall not exceed [*], and (b) [*]. Upon expiration of such period, SPRI shall be deemed to have a fully paid-up license to such Collaboration Product and the related Program
Materials, including any cell line producing such Collaboration Product. 
 7.5 Reporting and Payment. 
 7.5.1 Milestones. During the term of this Agreement, SPRI shall within [*] after the achievement of any milestone event referred to
in Section 7.3, furnish to XOMA a written notice indicating the milestone achieved and, if applicable, the relevant indication, label expansion and/or Regulatory Authority. 
 7.5.2 Royalties. During the term of this Agreement following the First Commercial Sale of any Collaboration Product, SPRI shall
(a) as soon as [*] after the end of each Contract Quarter but in any event within [*] thereof, furnish to XOMA a written quarterly royalty report of, on a Collaboration Product-by-Collaboration Product basis: 
 (i) the gross sales and Net Sales of Collaboration Products sold by SPRI, its sublicensees and their respective Affiliates during the
reporting period and the calculation of Net Sales from such gross sales; 
 (ii) the royalties payable in United States
dollars which shall have accrued hereunder in respect of such Net Sales; 
 (iii) the dates of the First Commercial Sales of
Collaboration Products in any country during the reporting period; and 
  

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 (iv) the exchange rates used in determining the amount of United States dollars payable
hereunder. 
 Royalties payable on sales in countries other than the United States shall be calculated in accordance with the standard
exchange rate conversion practices used by SPRI for financial accounting purposes. If no royalty or payment is due for any royalty period hereunder, SPRI shall so report. SPRI shall keep, and shall require its sublicensees to keep (all in accordance
with GAAP), complete and accurate records in sufficient detail to properly reflect all gross sales and Net Sales and to enable the royalties payable hereunder to be determined. SPRI shall include in each agreement with each applicable sublicensee a
provision requiring such sublicensee to make reports to SPRI, to keep and maintain records of sales made pursuant to such agreement and to grant access to such records by XOMA’s independent certified public accountant to the same extent
required of SPRI under this Agreement. 
 7.5.3 Payment Terms. Milestone payments for each milestone event shall be due
as soon as practicable, but in any event within [*], following the time of SPRI’s report under Section 7.5.1 for such milestone event shall be due. Royalty payments for each Contract Quarter shall be due simultaneously with SPRI’s
royalty report under Section 7.5.2 for such Contract Quarter. 
 7.6 Costs and Expenses. 
 7.6.1 FTEs. SPRI shall be responsible for all of its own R&D Costs and Manufacturing Costs, if any, and shall pay XOMA [*] of
XOMA’s R&D Costs and [*] of XOMA’s Manufacturing Costs (excluding in each case the costs of Third Party goods and services, which are addressed in Section 7.6.2 below, and Batch production costs, which are addressed in
Section 7.7 below), calculated on a functional area-by-functional area basis based on FTE Rates. 
 7.6.2 Third Party
Costs. Charges for Third Party goods and services and other financial obligations to Third Parties incurred or undertaken consistent with and directly related to any Plan shall be the responsibility of SPRI. XOMA will separately charge SPRI for
XOMA’s [*] costs, which may include, but are not limited to, extraordinary raw materials (e.g., purification resins), project required capital purchases (e.g., dedicated purification columns), outside testing, and reasonable
Collaboration-specific travel expenses. 
 7.6.3 Committee Expenses. SPRI shall be responsible for all travel and
related costs for its representatives, and, to the extent not paid pursuant to Section 7.6.1, shall reimburse XOMA, pursuant to Section 7.14, for all reasonable travel and related costs for XOMA’s representatives whose FTE costs are
not otherwise reimbursed by SPRI, to attend meetings of, and otherwise participate on, any Collaboration Committee. 
 7.6.4
Advances. SPRI will make advance payments to XOMA in quarterly increments with the funds being drawn down on a monthly basis according to work actually done, plus any other associated direct costs and expenses due XOMA and incurred in each
such month. XOMA shall provide reasonably detailed invoices, including supporting documentation for disbursements, to SPRI for each monthly payment. The advance payment for a particular quarter will be adjusted for any credits or unpaid balance from
the preceding quarter, plus the projected costs for such quarter. 
 7.7 Batch Prices. For each Batch Manufactured by XOMA in
accordance with a Manufacturing Plan, SPRI shall pay XOMA the Batch Price. XOMA will separately charge SPRI for [*] costs, which may include, but are not limited to, extraordinary raw materials (e.g., purification resins), project 

  

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required capital purchases (e.g., dedicated purification columns), outside testing, and reasonable Collaboration-specific travel expenses. 
 7.8 Records. The Parties shall each keep accurate books and accounts of record in connection with the R&D Programs and the Manufacture of
Collaboration Products in a manner consistent with GAAP and in sufficient detail to permit accurate determination of all figures necessary for verification of R&D Costs, Manufacturing Costs and Net Sales hereunder. 
 7.9 Audits. Upon the written request of a Party, the other Party shall permit an independent certified public accountant selected by the
requesting Party and acceptable to the other Party, which acceptance shall not be unreasonably withheld or delayed, to have access, at reasonable times and during normal business hours, to such records of such other Party as may be reasonably
necessary to verify the accuracy of an SPRI payment report or XOMA charges and invoices submitted to SPRI hereunder, provided that such records shall be limited to the immediately preceding [*] period. In the event of an SPRI audit of XOMA
charges and invoices, SPRI may use its internal finance or audit personnel to conduct the audit in lieu of the certified public accountant under the same conditions set forth in this Section 7.9 and any negative audit findings by such internal
personnel may be confirmed by a certified public accountant if so requested by XOMA. Each Party shall use commercially reasonable efforts to schedule all such verifications within [*] after the requesting Party makes its written request. All such
verifications shall be conducted not more than [*] in, or with respect to, each Contract Year. The report of the requesting Party’s independent certified public accountant or internal personnel shall be made available to both Parties. Subject
to the other Party’s rights under Section 14.8, in the event the requesting Party’s independent certified public accountant or internal personnel concludes that additional amounts were owed to the requesting Party for such period, the
additional amounts shall be paid by the other Party within [*] of the date the requesting Party delivers to the other Party such written report so concluding, unless such report contains manifest error. In the event the requesting Party’s
independent certified public accountant or internal personnel concludes that there was an overpayment to such Party during such period, the overpayment shall be repaid by the requesting Party within [*] of the date the requesting Party received such
written report so concluding, unless such report contains manifest error. The fees charged by such independent certified public accountant shall be paid by the requesting Party unless such audit discloses a payment discrepancy of more than [*] of
the amount due under this Agreement for the period in question, in which case the Party responsible for a payment discrepancy that is detrimental to the other Party will bear the full cost of such audit. Each Party agrees that all information
subject to review under this Section 7.9, or under any agreement with a sublicensee of SPRI, is confidential and that the Party receiving such information shall cause its independent certified public accountant or internal personnel to retain
all such information in confidence. The requesting Party’s independent certified public accountant or internal personnel shall only report to the requesting Party as to the computation of royalties or charges and invoices payable under this
Agreement, as applicable, and shall not disclose to the requesting Party any other information of the other Party or any sublicensee of SPRI. 
 7.10 Withholding Taxes. In the event that any royalties or other payments due to a Party are subject to withholding tax required by Law to be paid to the taxing authority of any foreign country, the amount of such tax may be withheld
from the applicable royalties or other payment due such Party. The Party owing such payment shall promptly pay such tax on behalf of the Party to which such payment is owed and shall furnish the Party to which such payment is owed with a certificate
of withholding tax so deducted for such Party’s avoidance of duplicate taxation in United States. Except as permitted in accordance with Section 1.58, the Party owing such payment may not deduct any other withholding or any other
governmental charges from the payments agreed upon under this Agreement, except to the extent same are paid on behalf of, or for the benefit of, the Party to which such payment is owed. The Party owing 

  

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such payment shall maintain official receipts of payment of any such withholding taxes and shall forward such receipts to the Party to which such payment is
owed. 
 7.11 Blocked Currency. If by Law conversion into United States dollars or transfer of funds of a convertible currency to the
United States is restricted or forbidden, the Party owing such payment shall give the Party to which such payment is owed prompt written notice and shall make such payment due under this Article 7 through such means or methods as are lawful in
such country as the Party to which such payment is owed may reasonably designate. Failing the designation by the Party to which such payment is owed of such lawful means or methods within [*] after such written notice is given to such Party, the
Party owing such payment shall deposit such royalty payment in local currency to the credit of the Party to which such payment is owed in a recognized banking institution designated by such Party, or if none is designated by such Party within the
[*] period described above, in a recognized banking institution selected by the Party owing such payment and identified in a written notice to other Party, and such deposit shall fulfill all obligations of the Party owing such payment to the other
Party with respect to such payment. 
 7.12 Interest on Late Payments. Any failure by SPRI to make a payment within [*] after the date
when due shall obligate SPRI to pay interest, the interest period commencing on the due date and ending on the payment date. The applicable interest rate shall be [*]. For clarity, it is understood that the calculation of Net Sales will require an
ongoing reconciliation process, and no interest shall be payable under this Section 7.12 with respect to any adjustments that are made from the initial report of Net Sales, as applicable, for a particular Contract Quarter so long as the
calculation of Net Sales that was reflected in the royalty statement for such calendar quarter was made in good faith. 
 7.13 Manner of
Payment. Except as provided in Section 7.11, payments to be made by one Party to the other under this Agreement shall be payable in United States dollars and shall be paid by wire transfer in immediately available funds to such bank account
as is designated in writing by such Party from time to time. Attached hereto as Schedule 7.13 is such bank account information for payments to be made to XOMA hereunder, until such time as XOMA designates a different bank account as provided
herein. 
 7.14 Reimbursement for Travel Expenses. Reimbursement for any travel related expenses under this Agreement shall be subject
to SPRI’s internal travel reimbursement policy and guidelines, a copy of which is attached hereto as Schedule 7.14. 
 ARTICLE
8 
 PRODUCT DEVELOPMENT DILIGENCE 
 8.1 SPRI Obligations. SPRI shall use Commercially Reasonable and Diligent Efforts to actively Develop and seek Regulatory Approval for at least one Program Antibody selectively binding to and acting through
each applicable Collaboration Target and use Commercially Reasonable and Diligent Efforts to market and sell the related Collaboration Product. 
 8.2 XOMA Obligations. With respect to each Collaboration Target for which XOMA completes Research and Development activities set forth in any R&D Plans, XOMA shall deliver to SPRI copies of all such data, information,
registrations and applications therefore, or, where appropriate, otherwise provide SPRI with reasonable access, directly or indirectly, to such data, information, registrations or applications (e.g., by way of a letter of access to a Drug Master
File or similar filing), in each case as [*] to enable SPRI to pursue the development and commercialization of such Collaboration Product(s). 
  

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 8.3 Termination of an R&D Program or a Collaboration Product License. With respect to each
Collaboration Target for which SPRI fails to timely satisfy its diligence obligations under Section 8.1 above, or the Research and Development of which SPRI otherwise abandons, subject to the provisions of Section 8.4, at the option of
XOMA,
 (a) the corresponding R&D Program shall terminate, the licenses granted under Section 6.1.1 by XOMA to
SPRI with respect to the applicable Collaboration Product(s) shall terminate, except for the license granted in Section 6.1.1(b) which shall be converted to a co-exclusive license between SPRI and XOMA, and (for the avoidance of doubt) the
provisions of Section 2.1.3 with respect to such Collaboration Target shall terminate for XOMA but shall remain in effect for SPRI; 
 (b) SPRI shall be deemed to have granted to XOMA 
 (i) an exclusive right and license, with
the right to sublicense, under SPRI’s interests in any Program Patent Rights and Program Technology relating to any Program Antibodies to such Collaboration Target, to make, have made, use, sell and import such Antibodies; and 
 (ii) a co-exclusive (with SPRI) right and license, with the right to sublicense, under any other of SPRI’s interests in Program
Patent Rights, to make, have made, use, sell and import Antibodies to such Collaboration Target; 
 (c) SPRI shall transfer to
XOMA ownership of all cell lines, including Master Cell Banks, that produce Collaboration Products to such Collaboration Target as to which ownership was previously transferred to SPRI pursuant to Section 5.3; and 
 (d) without limiting the foregoing, SPRI shall (i) deliver to XOMA copies of all such data, information, registrations and
applications therefore (or, where appropriate, otherwise provide XOMA with reasonable access, directly or indirectly, to such data, information, registrations or applications (e.g., by way of a letter of access to a Drug Master File or similar
filing)) as are existing, and (ii) grant such other licenses and/or sublicenses as are available under any Patent Rights Controlled by SPRI as of the date of such termination and used or contemplated to be used by SPRI in the course of the
Collaboration (as demonstrated by the Parties’ written records or otherwise as reasonably agreed by the Parties at the time of such termination), subject to XOMA being responsible for any Third Party payments for such licenses or sublicenses,
where each of (i) or (ii) is reasonably necessary to enable XOMA to pursue the development and commercialization of such Collaboration Product(s). 
 If the termination or abandonment is prior to IND filing for the relevant Collaboration Product, XOMA may continue any R&D Program with respect to such Collaboration Target or the development or commercialization of a related
Collaboration Product free of charge, provided that if SPRI is not developing an Antibody binding to and reactive with the same Target, then XOMA shall pay to SPRI a royalty on the Net Sales of any products so licensed in an amount equal to [*] the
royalty SPRI would have been required to pay XOMA hereunder, and for the term of a Valid Claim of any Program Patent Rights Covering such product, had such product been a Collaboration Product. If the termination or abandonment is after IND filing
for the relevant Collaboration Product, XOMA’s option with respect to clauses (b), (c) and (d) of this Section 8.3 shall be subject to XOMA paying to SPRI, with respect to any such R&D Program or Collaboration Product as to
which such option is exercised, (i) a royalty on Net Sales of any products so licensed in an amount equal to [*] the royalty that SPRI would have been required to pay XOMA hereunder, and for the term of a Valid Claim of any Program Patent
Rights Covering such products, 

  

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had such product been a Collaboration Product and (ii) milestone payments in amounts equal to [*] the payments that SPRI would have been required to pay
XOMA hereunder had such product been a Collaboration Product. 
 8.4 Conditions for Termination of an R&D Program or a Collaboration
Product License. Notwithstanding the provisions of Section 8.3 above, SPRI’s exclusive rights under Section 6.1.1 shall not terminate as set forth above and SPRI shall not be required to deliver such copies or provide such access
unless (a) XOMA gives to SPRI [*] prior written notice of XOMA’s intent to terminate such licenses, stating the reasons and justification for such termination and recommending steps which SPRI should take to satisfy its diligence
obligations hereunder, and (b) SPRI (or its sublicensee) has not used Commercially Reasonable and Diligent Efforts during such [*] period to pursue the research and/or development of, and/or to obtain Regulatory Approvals for, a Collaboration
Product with respect to such Collaboration Target and/or the active outlicensing of such a Collaboration Product. In the event that SPRI disagrees with a termination notice under this Section or Section 8.3, the provisions of Section 14.8
shall apply. 
 8.5 Mutual Termination of an R&D Program for Futility. An R&D Program may be terminated by the mutual written
agreement of the Parties for reasons of futility, such as the publication of blocking Third Party Patent Rights or technical failure. In such an event, 
 (a) the licenses granted under Section 6.1 with respect to all Collaboration Products as to which such termination relates shall terminate and (for the avoidance of doubt) the provisions of Section 2.1.3
with respect to the Collaboration Target that is the subject of such R&D Program shall terminate; 
 (b) each Party shall
be deemed to have granted to the other Party non-exclusive licenses under such Party’s interests in any Program Patent Rights, Program Materials and Program Technology with respect to Antibodies to such Collaboration Target and such licenses
shall be limited to each Party’s internal research use (as used in Sections 8.5(b) and 8.5(c), “internal research” shall mean any activities conducted internally by a Party or by a Third Party contractor for the sole benefit of a
Party for a program prior to the filing of an IND); and 
 (c) SPRI shall be deemed to have granted to XOMA a non-exclusive
right and license to all cell lines, including Master Cell Banks, that produce Collaboration Products to such Collaboration Target as to which ownership was previously transferred to SPRI pursuant to Section 5.3 and both Parties shall be
limited in their use of such cell lines to internal research. 
 ARTICLE 9 
 INTELLECTUAL PROPERTY 
 9.1 Ownership of Intellectual Property.

 9.1.1 Ownership of Background Technologies. Subject to the rights and licenses granted under this Agreement, XOMA
(and its licensors, as applicable) shall own and retain all rights to the XOMA Background Technology and SPRI (and its licensors, as applicable) shall own and retain all rights to the SPRI Background Technology. 
  

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 9.1.2 Ownership of Program Technology. 
 9.1.2.1 Inventorship. Inventorship for patentable inventions and discoveries conceived or reduced to practice in the course of the
performance of activities pursuant to this Agreement shall be determined in accordance with U.S. patent laws. In the event of a dispute regarding inventorship, the matter shall be referred to the Joint Patent Committee, and if the Joint Patent
Committee is unable to resolve such inventorship dispute, then either Party may present the matter to a court of competent jurisdiction for resolution as provided in Section 9.6. 
 9.1.2.2 Ownership of Program Materials and Technology. Subject to the rights and licenses granted under this Agreement, title to
all Program Materials and Program Technology, including, without limitation, all Program Patent Rights therein, shall be based upon the inventorship for such Program Materials and Program Technology. Subject to the rights and licenses granted under
this Agreement, (a) SPRI shall own Program Materials and Program Technology invented solely by employees, agents, consultants or contractors of SPRI or a SPRI Affiliate; (b) XOMA shall own Program Materials and Program Technology invented
solely by employees, agents, consultants or contractors of XOMA or a XOMA Affiliate; and (c) SPRI and XOMA shall jointly own Program Materials and Program Technology invented jointly by employees, agents, consultants or contractors of both SPRI
and XOMA or Affiliates of SPRI and XOMA. 
 9.1.3 Certain Rights With Respect to Program Materials and Technology.

 9.1.3.1 Subject to the terms of this Agreement and any applicable Pre-existing Obligations, SPRI hereby grants to XOMA,
within the Territory, a non-exclusive, [*] right and license, with the right to sublicense, under SPRI’s interest in the Program Materials and the Program Technology, including without limitation any Program Patent Rights Controlled by SPRI,
that are related to antibody discovery, optimization or evaluation or general cell line development or protein expression methodology, for purposes of discovering, creating, researching, developing, manufacturing and commercializing antibodies and
antibody products and related activities with respect thereto, including without limitation the conduct of activities in connection with the Collaboration and any product or use that, but for the license grant in this Section 9.1.3.1 would
infringe any Program Patent Rights Controlled by SPRI. 
 9.1.3.2 Subject to the exclusive licenses granted to SPRI hereunder
and any applicable Pre-existing Obligations, XOMA shall have the right to exploit or to grant licenses under the Program Technology and Program Patent Rights jointly owned by the Parties as provided in Section 9.1.2.2, without the prior
approval of any Collaboration Committee or the approval of, or accounting or other financial obligations to, SPRI. To the extent any Laws governing any portion of the Program Technology require the consent of the other joint owner(s) of such portion
of the Program Technology in order for a Party to exploit or grant licenses to such portion of the Program Technology, each Party hereby grants such consent to the other Party for the exploitation of and/or grant of licenses to such portion of the
Program Technology. 
 9.2 Prosecution and Maintenance of Program Patent Rights. 
 9.2.1 Primary Prosecution Rights. SPRI shall have responsibility for Patent Prosecution (as defined below) of Program Patent Rights
Covering inventions within the Program Materials 

  

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and the Program Technology that in accordance herewith (a) are solely owned by SPRI, (b) are jointly owned by SPRI and XOMA or (c) are solely
owned by XOMA and which contain Antibody Related Claims (as defined below). XOMA shall have the right to participate therein and be represented by counsel of its choice. XOMA shall have responsibility for Patent Prosecution of Program Patent Rights
Covering inventions within the Program Materials and the Program Technology that in accordance herewith are solely owned by XOMA and which do not contain Antibody Related Claims. The Party carrying out such responsibility shall bear all Patent
Prosecution expenses, including attorneys’ fees, incurred by such Party, or by the other Party at the request of the prosecuting Party, in the performance of Patent Prosecution. As used herein, “Patent Prosecution” means, with
respect to particular Program Patent Rights, (i) preparing, filing and prosecuting patent applications (including, but not limited to, provisional, reissue, continuing, continuation, continuation-in-part, divisional, and substitute applications
and any foreign counterparts thereof) for such Program Patent Rights; (ii) maintaining such Program Patent Rights; and (iii) managing any interference or opposition or similar proceedings relating to the foregoing. As used herein,
“Antibody Related Claims” means those claims included in the Program Patent Rights which are directed to [*]. 
 9.2.2 Secondary Prosecution Rights. If SPRI elects not to, or fails after reasonable notice from XOMA to use Commercially Reasonable and Diligent Efforts to, pursue Patent Prosecution with respect to an invention within the Program
Materials and Program Technology for which it has Patent Prosecution responsibility, then XOMA shall have the right to assume Patent Prosecution for such invention. In the case where SPRI makes such an election, it shall notify XOMA in writing of
such election at least [*] prior to the next date for action to preserve such Program Patent Rights. If XOMA elects to continue such Patent Prosecution, it may do so at its own expense. In such case, SPRI will provide XOMA with such assistance and
execute such documents as are necessary to continue or permit such Patent Prosecution by XOMA. 
 9.3 Enforcement of the Program Patent
Rights. 
 9.3.1 Notifications. Each Party shall provide to the other Party copies of (a) any written notices
it receives from any Third Party regarding any patent nullity action, declaratory judgment action, alleged invalidity, unenforceability, infringement or non-infringement with respect to Program Patent Rights or alleged misappropriation of
intellectual property with respect to Program Technology, Program Materials or Collaboration Products, and (b) any written allegations it receives from a Third Party that the manufacture, use, sale, offer for sale or import of Program
Technology, Program Materials or any Collaboration Product infringes the intellectual property rights of such Third Party, in each case promptly following receipt thereof. 
 9.3.2 Infringement Proceedings Against Third Parties. 
 9.3.2.1 SPRI shall have the first right, but not the obligation, to institute and direct legal proceedings against any Third Party
believed to be infringing the Program Patent Rights that (a) are Controlled in whole by SPRI, (b) are Controlled jointly by SPRI and XOMA or (c) are Controlled in whole by XOMA and which contain Antibody Related Claims. XOMA shall
have the sole right, but not the obligation, to institute and direct legal proceedings against any Third Party believed to be infringing the Program Patent Rights that are Controlled in whole by XOMA and which do not contain Antibody Related Claims.
Each Party will bear its own costs, including attorneys’ fees, relating to such legal proceedings; provided that the Party directing such legal proceedings shall bear the other Party’s out-of-pocket expenses, including
attorneys’ fees, incurred in complying 

  

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with requests for cooperation made by the directing Party. Any recovery in connection with such suit or proceeding will first be applied to reimburse the
Parties for their out-of-pocket expenses, including attorneys’ fees. All recoveries resulting from such legal proceedings that are in excess of the Parties’ costs of bringing or participating in such action, including attorneys’ fees,
shall be for the account of the Party directing such proceedings. 
 9.3.2.2 If SPRI elects not to exercise, or fails after
reasonable notice from XOMA to use Commercially Reasonable and Diligent Efforts in the exercise of, its right to institute and direct legal proceedings based on the jointly owned Program Patent Rights or XOMA solely owned Program Patent Rights that
do not contain Antibody Related Claims as set forth in Section 9.3.2.1, then XOMA shall have the right to institute and direct such legal proceedings. In the case where SPRI makes such an election, it shall notify XOMA in writing of such
election at least [*] prior to the last available date for instituting any such legal proceeding. If XOMA elects to institute and direct such legal proceedings, it may do so at its own expense. In such case, SPRI will provide XOMA with such
assistance and execute such documents as are necessary to continue or permit such legal proceedings by XOMA. 
 9.3.2.3 In the
event that either Party takes action under this Section 9.3.2, the other Party shall cooperate to the extent reasonably necessary at the sole expense of the acting Party. Upon the reasonable request of such acting Party, the other Party shall
join the suit and shall be represented in any such legal proceedings using counsel of its own choice. The non-acting Party shall have the right to participate and be represented in any such legal proceedings by counsel of its own choice. Neither
Party shall settle any claim or proceeding relating to Program Patent Rights Controlled in whole or in part by the other Party or licensed under this Agreement to the other Party without the prior written consent of such other Party, which consent
shall not be unreasonably withheld or delayed. 
 9.4 Infringement Proceedings by Third Parties. In the event that a Party receives
written notice that it or any of its Affiliates have been individually named as a defendant in a legal proceeding by a Third Party alleging infringement or misappropriation of a Third Party patent or other intellectual property right as a result of
the manufacture, use, sale, offer for sale or import of the Program Technology, the Program Materials or a Collaboration Product, such Party shall promptly notify the other Party in writing. Such written notice shall include a copy of any summons or
complaint (or the equivalent thereof) received regarding the foregoing. In addition to its obligations under Section 12.1, SPRI agrees to defend, indemnify and hold XOMA, its Affiliates and their respective employees and agents harmless from
all claims, losses, damages or expenses (including reasonable attorneys’ fees and costs of litigation) based on, arising out of or in connection with (a) SPRI’s activities, decisions or determinations (or failures to act, decide or
determine) in the course of the Collaboration under this Agreement and/or (b) XOMA’s activities in the course of the Collaboration under this Agreement with respect to Collaboration Targets or Antibodies to Collaboration Targets (including
assays and reagents related thereto) or as otherwise explicitly stated in any approved R&D Plan or any approved modification thereof. SPRI’s obligations under this Section 9.4 shall be subject to the limitations set forth in
Section 12.3, and any claim for indemnification under this Section 9.4 shall be subject to the procedural requirements of Section 12.4. 
  

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 9.5 Cooperation. Each Party hereby agrees: 
 (a) to cooperate in the Patent Prosecution of any inventions within the Program Materials or Program Technology that in accordance
herewith are jointly owned by the Parties in order to segregate the claims so as to implement the terms of Section 9.2; 
 (b) to take all reasonable additional actions and execute such agreements, instruments and documents as may be reasonably required to perfect the other Party’s ownership interest of the Program Materials and the Program Technology in
accordance with the intent of this Agreement; 
 (c) to provide the other Party with copies of drafts of all material filings
with or other submissions to the U.S. Patent and Trademark Office or its foreign counterparts relating to Patent Prosecution, or the court or other tribunal relating to any infringement claims against Third Parties under the Program Patent Rights or
the defense of infringement or misappropriation claims by Third Parties relating to the Program Technology, the Program Materials or a Collaboration Product, in each case reasonably prior to the filing or submission thereof, and to give due
consideration to the comments and suggestions of the other Party in relation thereto; 
 (d) to provide the other Party with
copies of all material filings with or other submissions to the U.S. Patent and Trademark Office or its foreign counterparts relating to Patent Prosecution or the court or other tribunal relating to any infringement claims against Third Parties
under the Program Patent Rights or the defense of infringement or misappropriation claims by Third Parties relating to the Program Technology, the Program Materials or a Collaboration Product; 
 (e) to keep the other Party apprised of material developments in any discussions or negotiations with Third Parties concerning the
licensing of any intellectual property in connection with the Collaboration or the settlement of any dispute relating thereto, and as reasonably requested by the other Party to provide (for review and comment) copies of drafts of any license,
settlement or other agreement relating thereto, as well as copies of the final versions of any such agreements; 
 (f) to
cooperate, as reasonably necessary, with the other Party in gaining patent term extensions, supplemental protection certificates or their equivalents wherever applicable to any Program Patent Rights; 
 (g) to endeavor in good faith to coordinate its efforts with the other Party to minimize or avoid interference with the Patent Prosecution
of the other Party’s patent applications related to inventions within the Program Materials and Program Technology; and 
 (h) to make its employees, Affiliates, agents, independent contractors and consultants reasonably available to the other Party (or to the other Party’s authorized attorneys, agents or representatives and, in any case, at the directing
or acting Party’s expense as provided in this Article 9) to the extent reasonably necessary by the other Party in connection with Patent Prosecution, the pursuit of infringement claims against Third Parties relating to the Program Patent Rights
or the defense of infringement or misappropriation claims by Third Parties relating to the Program Technology, the Program Materials or a Collaboration Product. 
 9.6 Disputes Regarding Intellectual Property. Without limiting or otherwise restricting the Parties’ respective rights and obligations expressly set forth in the other provisions of this Article 9, the
Parties agree that any dispute between them over the ownership, validity, enforceability or infringement 

  

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of any Patent Rights related to the Collaboration and Controlled by either Party that cannot be resolved between them after following the procedures of
Section 14.8 shall be presented only to a court of competent jurisdiction for resolution. 
 ARTICLE 10 
 CONFIDENTIALITY 
 10.1
Nondisclosure Obligations. 
 10.1.1 General. Except as otherwise provided in this Article 10, during the
term of this Agreement and for a period of [*] thereafter, or longer if required by any agreement with a Third Party relating to such Confidential Information, each Receiving Party shall maintain the Confidential Information of each Disclosing Party
in confidence and use it only for purposes specifically authorized under this Agreement. Upon the expiration or termination of this Agreement, each Party shall promptly inform the other Party in writing if any Confidential Information the other
Party received from such Party hereunder is covered by such a Third Party agreement with such Party and if the term of confidentiality for such Confidential Information will extend beyond such [*] period. 
 10.1.2 Limitations. To the extent it is reasonably necessary or appropriate to fulfill its obligations or exercise its rights under
this Agreement and subject to advance written notification to the Disclosing Party: (a) a Party may disclose Confidential Information it is otherwise obligated not to disclose under this Section 10.1, to its Affiliates, sublicensees,
consultants, outside contractors and clinical investigators, on a strict need-to-know basis for the purposes contemplated by this Agreement and on condition that such entities or persons agree to keep the Confidential Information confidential for
the same time periods and to the same extent as such Party is required to keep the Confidential Information confidential hereunder; and (b) a Party or its sublicensees may disclose, using appropriate measures to preserve confidentiality, such
Confidential Information to government or other regulatory authorities to the extent that such disclosure is reasonably necessary to obtain authorizations to conduct clinical trials of, and to commercially market, Collaboration Products pursuant to
this Agreement. Furthermore, a Receiving Party may request permission from the Disclosing Party to disclose such Confidential Information to the extent that such disclosure is reasonably necessary to obtain patents which such Receiving Party is
permitted to obtain hereunder, which permission shall not be unreasonably withheld or delayed. 
 10.1.3 Required
Disclosure. A Receiving Party may disclose Confidential Information pursuant to interrogatories, requests for information or documents, subpoena, civil investigative demand issued by a court or governmental agency or as otherwise required by
Law; provided, however, that the Receiving Party shall notify the Disclosing Party promptly upon receipt thereof, giving (where practicable) the Disclosing Party sufficient advance notice to permit it to oppose, limit or seek
confidential treatment for such disclosure; and provided, further, that the Receiving Party shall furnish only that portion of the Confidential Information which it is advised by counsel is legally required whether or not a protective
order or other similar order is obtained by the Disclosing Party. 
 10.2 Injunctive Relief. The Parties hereto understand and agree
that remedies at law may be inadequate to protect against any breach of any of the provisions of this Article 10 by either Party or their employees, agents, officers or directors or any other person acting in concert with it or on its behalf.
Accordingly, each Party shall be entitled to the granting of injunctive relief by a court of competent jurisdiction against any action that constitutes any such breach of this Article 10. 
  

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 10.3 Publication. 
 10.3.1 SPRI may publish or present data and/or results relating to a Collaboration Product, subject to the prior review of the proposed
disclosure by XOMA, solely for the purposes of determining (a) whether the proposed disclosure contains the Confidential Information of XOMA or (b) whether the information contained in the proposed disclosure should be the subject of a
patent application to be filed by XOMA prior to such disclosure. SPRI shall provide XOMA with the opportunity to review any proposed abstract, manuscript or presentation by delivering a copy thereof to XOMA no less than [*] before its intended
submission for publication or presentation. XOMA shall have [*] from its receipt of any such abstract, manuscript or presentation in which to notify SPRI in writing of any specific objections to the disclosure, based on either the need to seek
patent protection or concern regarding the specific disclosure of the Confidential Information of XOMA, and XOMA shall so notify SPRI within such time period. In the event XOMA objects to the disclosure for a reason identified above, the SPRI agrees
not to submit the publication or abstract or make the presentation containing the objected-to information until XOMA is given a reasonable additional period of time (not to exceed an additional [*]) to seek patent protection for any material in the
disclosure which XOMA believes is patentable (subject, in all events, to Section 10.2) or, in the case of Confidential Information, to allow the SPRI to delete any Confidential Information of XOMA from the proposed disclosure. The SPRI agrees
to delete from the proposed disclosure any Confidential Information of XOMA upon request. 
 10.3.2 Notwithstanding anything
herein to the contrary, the Parties agree that XOMA may use “blinded” data (so long as such use does not jeopardize the patentability of any invention claimed by a patent or patent application filed by SPRI) for purposes of demonstrating,
presenting or otherwise promoting its technologies, expertise, capabilities and/or applications of any thereof. With respect to the immediately preceding sentence, XOMA shall submit such blinded data to SPRI for approval at least [*] prior to
disclosure, such approval not to be unreasonably withheld. The blinded data shall not reveal the identity of SPRI, any Collaboration Target or any Program Antibody. 
 10.3.3 In any manuscript, publication or presentation relating to the Collaboration, SPRI will acknowledge the contributions of XOMA
(including, where appropriate, co-authorship), giving equal prominence in such manuscript, publication or presentation to the name of the other Party. 
 10.4 Publicity. The terms and conditions of this Agreement are Confidential Information hereunder and, except as expressly set forth herein, SPRI and XOMA each agree not to disclose any terms or conditions of
this Agreement to any Third Party without first obtaining the written approval of the other Party prior to such disclosure. The Parties hereby agree to the release of a press release in the form attached hereto as Schedule 10.4 upon full
execution of this Agreement and the terms that are expressly described in such press release shall be deemed to be in the public domain. The Parties may thereafter from time to time (a) mutually agree on revisions to material to be used as a
routine reference, which revisions shall be submitted by one Party for the review and approval of the other Party at least [*] prior to the anticipated use or disclosure of the revised material, such approval not to be unreasonably withheld or
delayed, and (b) disclose any such agreed revised information without consulting the other Party. The terms of this Agreement shall be treated as the Confidential Information of SPRI and XOMA, and, except to the extent required by applicable
law, shall not be disclosed except as otherwise provided herein without the written permission of XOMA or SPRI. If either Party desires to release a separate announcement relating to this Agreement, it shall first allow the other Party [*] to
approve in writing such proposed announcement; provided that such approval shall not be unreasonably withheld or delayed. Nothing herein 

  

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shall be deemed to prohibit, restrict or limit any disclosure that is consistent in all material respects with prior disclosures. 
 ARTICLE 11 
 REPRESENTATIONS AND
WARRANTIES 
 11.1 Representations, Warranties and Covenants of SPRI. SPRI represents and warrants to and covenants with XOMA
that: 
 11.1.1 SPRI is a corporation duly organized, validly existing and in corporate good standing under the laws of New
Jersey; 
 11.1.2 SPRI has the corporate and legal right, authority and power to enter into this Agreement, and to extend the
rights and licenses granted to XOMA in this Agreement; 
 11.1.3 SPRI has taken all necessary action to authorize the
execution, delivery and performance of this Agreement; 
 11.1.4 upon the execution and delivery of this Agreement, this
Agreement shall constitute a valid and binding obligation of SPRI, enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ and contracting Parties’ rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); 
 11.1.5 the performance of SPRI’s obligations under this Agreement will not conflict with its charter documents or result in a breach
of any agreements, contracts or other arrangements to which it is a Party or violate any court or administrative order by which it is bound; and 
 11.1.6 neither it nor any of its employees or consultants working on the Collaboration have been debarred pursuant to the FDC Act or are currently excluded, debarred, suspended or otherwise ineligible to participate
in Federal health care program and SPRI shall promptly notify XOMA of any change in this warranty and representation. 
 11.2
Representations, Warranties and Covenants of XOMA. XOMA represents and warrants to and covenants with SPRI that: 
 11.2.1 XOMA is a limited liability company duly organized, validly existing and in good standing under the laws of Delaware; 
 11.2.2 XOMA has the corporate and full legal right, authority and power to enter into this Agreement, and to extend the rights and licenses granted to SPRI in this Agreement; 
 11.2.3 XOMA has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement; 

11.2.4 upon the execution and delivery of this Agreement, this Agreement shall constitute a valid and binding obligation of XOMA
enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ and contracting Parties’ rights generally and except as
enforceability 

  

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may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); 
 11.2.5 the performance of its obligations under this Agreement will not conflict with XOMA’s charter documents or result in a breach
of any agreements, contracts or other arrangements to which it is a Party [*] or violate any court or administrative order by which it is bound; 
 11.2.6 neither it nor any of its employees or consultants working on the Collaboration have been debarred pursuant to the FDC Act or are currently excluded, debarred, suspended or otherwise ineligible to participate
in Federal health care program and XOMA shall promptly notify SPRI of any change in this warranty and representation; 
 11.2.7 [*]. 
 11.3 Warranty Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY
WARRANTY WITH RESPECT TO ANY PRODUCT, PATENT RIGHTS, GOODS, SERVICES, MATERIALS OR ANY OTHER SUBJECT MATTER OF THIS AGREEMENT, AND EACH PARTY HEREBY DISCLAIMS WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT WITH
RESPECT TO ANY AND ALL OF THE FOREGOING. 
 11.4 Limited Liability. EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, NEITHER SPRI
NOR XOMA WILL BE LIABLE WITH RESPECT TO ANY MATTER ARISING UNDER THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY PUNITIVE, EXEMPLARY, INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS.

 ARTICLE 12 
 INDEMNITY 
 12.1 SPRI Indemnity Obligations. SPRI agrees to defend, indemnify and hold XOMA, its Affiliates and their
respective employees and agents harmless from all claims, losses, damages or expenses (including reasonable attorneys’ fees and costs of litigation) arising as a result of: (a) actual or asserted violations of any applicable law or
regulation by SPRI, its sublicensees and their respective Affiliates by virtue of which any Collaboration Products manufactured, distributed or sold by SPRI, its sublicensees or their respective Affiliates hereunder shall be alleged or determined to
be adulterated, misbranded, mislabeled or otherwise not in compliance with any applicable law or regulation; (b) claims for bodily injury, death or property damage attributable to the manufacture, distribution, sale or use of any Collaboration
Products by SPRI, its sublicensees or their respective Affiliates; (c) a recall of a Collaboration Product manufactured, distributed or sold by SPRI, its sublicensees or their respective Affiliates ordered by a governmental agency or required
by a confirmed Collaboration Product failure as reasonably determined by the Parties hereto; or (d) SPRI’s breach of any of its representations, warranties or covenants hereunder. 
 12.2 XOMA Indemnity Obligations. XOMA agrees to defend, indemnify and hold SPRI, its Affiliates and their respective employees and agents harmless
from all claims, losses, damages or expenses (including reasonable attorneys’ fees and costs of litigation) arising as a result of: (a) actual or asserted violations of any applicable law or regulation by XOMA, its sublicensees and their
respective Affiliates by virtue of which any Collaboration Products manufactured, distributed or sold by XOMA, its sublicensees or their respective Affiliates hereunder shall be alleged or determined to be adulterated, misbranded, mislabeled or
otherwise not in compliance with any applicable law or regulation; (b) claims for 

  

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bodily injury, death or property damage attributable to the manufacture, distribution, sale or use of any Collaboration Products by XOMA, its sublicensees or
their respective Affiliates; (c) a recall of a Collaboration Product manufactured, distributed or sold by XOMA, its sublicensees or their respective Affiliates hereunder ordered by a governmental agency or required by a confirmed Collaboration
Product failure as reasonably determined by the Parties hereto; or (d) XOMA’s breach of any of its representations, warranties or covenants hereunder. 
 12.3 Limitation on Indemnity Obligations. Neither Party, its Affiliates or their respective employees and agents shall be entitled to the indemnities set forth in Sections 12.1 or 12.2, respectively, to
the comparative extent the claim, loss, damage or expense for which indemnification is sought was caused by a negligent, reckless or intentional act or omission by such Party, its directors, officers, employees or authorized agents. 
 12.4 Procedure. If a Party or any of its Affiliates or their respective employees or agents (collectively, the “Indemnitee”)
intends to claim indemnification under this Article 12, the Indemnitee shall promptly notify the other Party (the “Indemnitor”) of any loss, claim, damage, liability or action in respect of which the Indemnitee intends to claim
such indemnification, and the Indemnitor shall assume the defense thereof with counsel selected by the Indemnitor and reasonably acceptable to the Indemnitee; provided, however, that an Indemnitee shall have the right to retain its own
counsel, with the fees and expenses to be paid by the Indemnitee, if representation of such Indemnitee by the counsel retained by the Indemnitor would be inappropriate due to actual or potential differing interests between such Indemnitee and any
other Party represented by such counsel in such proceedings. The Indemnitor shall have the right to settle or compromise any claims for which it is providing indemnification under this Article 12, provided that the consent of the
Indemnitee (which shall not be unreasonably withheld or delayed) shall be required in the event any such settlement or compromise would adversely affect the interests of the Indemnitee. The indemnity agreement in this Article 12 shall not apply
to amounts paid in settlement of any loss, claim, damage, liability or action if such settlement is effected without the consent of the Indemnitor. The failure to deliver notice to the Indemnitor within a reasonable time after the commencement of
any such action, if prejudicial to the Indemnitor’s ability to defend such action, shall relieve such Indemnitor of any liability to the Indemnitee under this Article 12 resulting from such failure, but the omission so to deliver notice to
the Indemnitor will not relieve it of any liability that it may have to any Indemnitee otherwise than under this Article 12. The Indemnitee under this Article 12, its employees and agents, shall cooperate fully with the Indemnitor and its legal
representatives in the investigation of any action, claim or liability covered by this indemnification. 
 12.5 Insurance. Each Party
shall maintain appropriate product liability insurance (and/or self-insurance) with respect to Research and Development and Manufacture of Collaboration Products by such Party in such amount as such Party customarily maintains with respect to sales
of its other products. Each Party shall maintain such insurance for so long as it continues to manufacture or sell Collaboration Products, and thereafter for so long as such Party customarily maintains insurance with respect to sales of its other
products. 
 ARTICLE 13 
 EXPIRATION AND TERMINATION 
 13.1 Term of Agreement. The term of this Agreement shall commence on the Effective Date
and shall continue until the latest of (a) the expiration or termination of the last to expire of any Valid Claim or pending claim within the Program Patent Rights or other Patent Rights Covering the manufacture, use or sale of any
Collaboration Product with respect to which SPRI would have a payment obligation 

  

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to XOMA hereunder, (b) the expiration of the royalty term provided for in Section 7.4, and (c) the cessation of all Research and Development
activities with respect to all Program Antibodies, Collaboration Targets and/or Collaboration Products, as applicable, pursuant to the terms hereof. 
 13.2 SPRI Unilateral Right to Terminate. SPRI shall have the unilateral right to terminate this Agreement for any reason and at any time following the date that is [*] after the Effective Date by providing XOMA
with [*] advance written notice of such termination. Following receipt of such notice, (a) XOMA shall cease all Collaboration activities as soon as reasonably practicable and use Commercially Reasonable and Diligent Efforts to minimize
Collaboration costs, and (b) SPRI shall continue to pay during such notice period the full amount contemplated in the respective R&D Plan with respect to work to be conducted by XOMA based on XOMA’s fully funded FTE rates, as well as
during and after such notice period all committed, non-cancellable Third Party Collaboration costs incurred by XOMA for work set forth in the respective R&D Plan, provided that in the event that XOMA elects to pursue on its own a Collaboration
Product that is the subject of a terminated R&D Plan, then SPRI shall not be obliged to make any such payments to XOMA after such [*] period has expired. 
 13.3 Events of Default. An “Event of Default” by either Party shall have occurred upon (a) the occurrence of a material breach of this Agreement if such Party fails to remedy such breach
within [*] after written notice thereof by the non-breaching Party ([*] in the event of a Party’s failure to make a payment required hereunder) or, if remediation of such breach (other than a payment breach) within [*] is not practicable, if
such Party fails to commence and diligently pursue such remediation during such [*] period, or (b) the commencement of any proceeding in or for bankruptcy, insolvency, dissolution or winding up by or against such Party that is not dismissed or
otherwise disposed of within [*] thereafter. 
 13.4 Effect of an Event of Default. In the event of an Event of Default, the
non-defaulting Party shall have the right, at its option exercisable in its sole discretion, in addition to any other rights or remedies available to it at law or in equity and subject to the limitations set forth in Sections 3.8, 11.4 and 14.8
hereof, to (a) if the Event of Default directly relates to less than all Collaboration Targets, Program Antibodies and Collaboration Products, by written notice to the other Party, deem that such Party has abandoned work on the Collaboration
Target(s), Program Antibodies and/or Collaboration Product(s) to which such Event of Default directly relates, or (b) if the Event of Default directly relates to all Collaboration Targets, Program Antibodies and Collaboration Products, by
written notice to the other Party, deem that such Party has terminated this Agreement in its entirety. 
 13.5 XOMA’s Rights After
Unilateral Termination by SPRI or Termination for an Event of Default by SPRI. In the event SPRI terminates this Agreement pursuant to Section 13.2 or this Agreement is terminated pursuant to Section 13.4 for an Event of Default by
SPRI, all R&D Programs as to which such termination relates shall terminate, the licenses granted under Section 6.1.1 by XOMA to SPRI with respect to all Collaboration Products as to which such termination relates shall terminate,
except for the license granted in Section 6.1.1(b) which shall be converted to a co-exclusive license between SPRI and XOMA and shall become fully-sublicensable, and (for the avoidance of doubt) the provisions of Section 2.1.3 as to all
Collaboration Targets as to which such termination relates shall terminate for XOMA but shall remain in effect for SPRI. At the option of XOMA, XOMA shall be free to continue any R&D Program as to which such termination relates or
development or commercialization of a Collaboration Product as to which such termination relates on its own, in which event, notwithstanding anything herein to the contrary: 
 (a) the licenses granted to XOMA herein shall remain in effect with respect thereto; 
  

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 (b) SPRI shall be deemed to have granted to XOMA 
 (i) an exclusive right and license, with the right to sublicense, under SPRI’s interests in any Program Patent Rights and Program
Technology relating to any Program Antibodies or Collaboration Products, to make, have made, use, sell and import such Antibodies or products; and 
 (ii) a co-exclusive (with SPRI) right and license, with the right to sublicense, under any other of SPRI’s interests in Program Patent Rights, to make, have made, use, sell and import Antibodies; 
 (c) SPRI shall transfer to XOMA all Program Materials and Program Technology requested by XOMA, including but not limited to ownership of
all cell lines, including Master Cell Banks, that produce, as applicable, Collaboration Products to such Collaboration Target or such Collaboration Product and as to which ownership was previously transferred to SPRI pursuant to Section 5.3;
and 
 (d) without limiting the foregoing, SPRI shall (i) deliver to XOMA copies of all such data, information,
registrations and applications therefore (or, where appropriate, otherwise provide XOMA with reasonable access, directly or indirectly, to such data, information, registrations or applications (e.g., by way of a letter of access to a Drug Master
File or similar filing)) as are existing, and (ii) grant such other licenses and/or sublicenses as are available under any Patent Rights Controlled by SPRI as of the date of such termination, subject to XOMA being responsible for any Third
Party payments for such licenses or sublicenses, where each of (i) or (ii) is reasonably necessary to enable XOMA to pursue the development and commercialization of such Collaboration Product(s). 
 XOMA’s option in the preceding sentence shall be subject to XOMA paying to SPRI the consideration provided for in the last paragraph of Section 8.3, if any,
with respect to any such R&D Program or Collaboration Product as to which such option is exercised. For the avoidance of doubt, SPRI’s license in Section 6.1.1(b), converted to co-exclusive as provided above, shall continue to be
subject to its continuing payment obligations under Section 6.1.1(b). 
 13.6 SPRI’s Rights After Termination for an Event of
Default by XOMA. In the event this Agreement is terminated pursuant to Section 13.4 for an Event of Default by XOMA, all R&D Programs as to which such termination relates shall terminate, the licenses granted under
Section 6.1.2 by SPRI to XOMA with respect to all Collaboration Products as to which such termination relates shall terminate and (for the avoidance of doubt) the provisions of Section 2.1.3 as to all Collaboration Targets as to which such
termination relates shall terminate for SPRI but shall remain in effect for XOMA. At the option of SPRI, SPRI shall be free to continue any R&D Program as to which such termination relates or development or commercialization of a
Collaboration Product as to which such termination relates on its own, in which event, notwithstanding anything herein to the contrary: 
 (a) the licenses granted to SPRI herein shall remain in effect with respect thereto; 
 (b)
XOMA shall transfer to SPRI all Program Materials and Program Technology requested by SPRI, including but not limited to ownership of all cell lines, including Master Cell Banks, that produce, as applicable, Collaboration Products to such
Collaboration Target or such Collaboration Product and as to which ownership has not previously been transferred to SPRI pursuant to Section 5.3; and 
  

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 (c) without limiting the foregoing, XOMA shall (i) deliver to SPRI copies of all
such data, information, registrations and applications therefore (or, where appropriate, otherwise provide SPRI with reasonable access, directly or indirectly, to such data, information, registrations or applications (e.g., by way of a letter of
access to a Drug Master File or similar filing)) as are existing, and (ii) grant such other licenses and/or sublicenses as are available under any Patent Rights Controlled by XOMA as of the date of such termination, subject to SPRI being
responsible for any Third Party payments for such licenses or sublicenses, where each of (i) or (ii) is reasonably necessary to enable SPRI to pursue the development and commercialization of such Collaboration Product(s). 
 SPRI’s option in the preceding sentence shall be subject to SPRI paying to XOMA, with respect to any such R&D Program or Collaboration Product as to which such
option is exercised, (i) a royalty on Net Sales of any products so licensed in an amount equal to [*] the royalty that SPRI would have been required to pay XOMA hereunder, and for the term of a Valid Claim of any Program Patent Rights Covering
such products, had such product been a Collaboration Product and (ii) milestone payments in amounts equal to [*] the payments that SPRI would have been required to pay XOMA hereunder had such product been a Collaboration Product. 
 13.7 Effect of Expiration or Termination of Agreement. The expiration or termination of this Agreement shall not relieve the Parties of any
obligation accruing prior to such expiration or termination. In no way limiting the generality of the foregoing, the provisions of Articles 1, 10 - 12 and 14, and Sections 2.1.3, 2.2.5, 4.3.1, 7.3 - 7.5, 7.8 - 7.13, 8.3, 8.5, 9.1 and 13.4 -
13.7, hereof shall survive the expiration or termination of this Agreement. 
 ARTICLE 14 
 MISCELLANEOUS 
 14.1 Force
Majeure. Neither Party shall be held liable or responsible to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any obligation under this Agreement when such failure
or delay is caused by or results from causes beyond the reasonable control of the affected Party, including but not limited to fire, floods, embargoes, war, acts of war (whether war is declared or not), insurrections, riots, civil commotions,
strikes, lockouts or other labor disturbances, acts of God or acts, omissions or delays in acting by any governmental authority; provided, however, that the Party so affected shall use reasonable commercial efforts to avoid or remove
such causes of nonperformance, and shall continue performance hereunder with reasonable dispatch whenever such causes are removed. Either Party shall provide the other Party with prompt written notice of any delay or failure to perform that occurs
by reason of force majeure. The Parties shall mutually seek a resolution of the delay or the failure to perform as noted above. 
 14.2
Assignment. This Agreement may not be assigned or otherwise transferred, in whole or in part, by either Party without the consent of the other Party; provided, however, that either SPRI or XOMA may, without such consent, assign
its rights and obligations under this Agreement (i) to any Affiliate, or (ii) in connection with a merger, consolidation or sale of such portion of a Party’s assets that includes rights under this Agreement to an unrelated Third
Party; provided, further, that such Party’s rights and obligations under this Agreement shall be assumed by its successor in interest in any such transaction and shall not be transferred separate from all or substantially all of
its other business assets, including those business assets that are the subject of this Agreement. Any purported assignment in violation of the preceding sentence shall be void. Any permitted assignee shall assume all obligations of its assignor
under this Agreement, unless the Parties otherwise agree. 
  

 -42- 

 14.3 Bankruptcy. All rights and licenses granted under this Agreement by one Party to the other
Party are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title XI of the United States Code (the “Bankruptcy Code”), licenses of rights to “intellectual property” as defined under
Section 101(56) of the Bankruptcy Code. The Parties agree that the licensing Party under this Agreement shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code in the event of a bankruptcy by the other
Party. The Parties further agree that in the event of the commencement of a bankruptcy proceeding by or against one Party under the Bankruptcy Code, the other Party shall be entitled to complete access to any such intellectual property pertaining to
the rights granted in the licenses hereunder of the Party by or against whom a bankruptcy proceeding has been commenced and all embodiments of such intellectual property. 
 14.4 Severability. Each Party hereby agrees that it does not intend to violate any public policy, Law, treaty or decision of any government agency or executive body thereof of any country or community or
association of countries. Should one or more provisions of this Agreement be or become invalid, the Parties hereto shall substitute, by mutual consent, valid provisions for such invalid provisions which valid provisions in their economic effect are
sufficiently similar to the invalid provisions that it can be reasonably assumed that the Parties would have entered into this Agreement with such valid provisions in lieu of such invalid provisions. In case such valid provisions cannot be agreed
upon, the invalidity of one or several provisions of this Agreement shall not affect the validity of this Agreement as a whole, unless the invalid provisions are of such essential importance to this Agreement that it is to be reasonably assumed that
the Parties would not have entered into this Agreement without the invalid provisions. 
 14.5 Notices. Any consent, notice or report
required or permitted to be given or made under this Agreement by one of the Parties hereto to the other shall be in writing, delivered personally or by facsimile (and promptly confirmed by telephone, personal delivery or courier) or courier,
postage prepaid (where applicable), addressed to such other Party at its address indicated below, or to such other address as the addressee shall have last furnished in writing to the addressor and shall be effective upon receipt by the addressee.

  

					
	 If to SPRI:
	  	Schering-Plough Research Institute
		  	2015 Galloping Hill Road
		  	Kenilworth, New Jersey 07033
		  	Attention:	  	Discovery Collaborations & Technology
		  	Telephone:	  	908-740-3290
		  	Facsimile:	  	908-740-7164
		
	 with a copy to:
	  	Schering-Plough Corporation
		  	2000 Galloping Hill Road
		  	K-6-1 (1800)
		  	Kenilworth, New Jersey 07033
		  	Attention:	  	Staff Vice President, Research Contracting
		  	Telephone:	  	908-298-4249
		  	Facsimile:	  	908-298-5388
		
	 If to XOMA:
	  	XOMA (US) LLC
		  	2910 Seventh Street
		  	Berkeley, California 94710
		  	Attention:	  	Legal Department
		  	Telephone:	  	(510) 204-7200
		  	Facsimile:	  	(510) 649-7571

  

 -43- 

					
	 with a copy to:
	  	XOMA (US) LLC
		  	2910 Seventh Street
		  	Berkeley, California 94710
		  	Attention:	  	Vice President, Business Development
		  	Telephone:	  	(510) 204-7200
		  	Facsimile:	  	(510) 649-7571

 14.6 Applicable Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without reference to the conflicts of law principles thereof. 
 14.7 Forum Selection; Consent to
Jurisdiction. Any litigation based hereon, or arising out of, under, or in connection with this Agreement, shall be brought and maintained exclusively in the state or federal courts located within New York County, the State of New York. The
Parties hereby expressly and irrevocably submit to the jurisdiction of the courts located within New York County, the State of New York for the limited purpose of any such litigation as set forth above. The Parties further irrevocably consent to the
service of process by registered mail, postage prepaid, or by personal service. The Parties hereby expressly and irrevocably waive, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of
any such litigation brought in any such court referred to above and any claim that any such litigation has been brought in an inconvenient forum. 
 14.8 Dispute Resolution. Except for those matters that are to be resolved by the Joint Steering Committee and the JRDC as set forth in Section 3.8 herein acting in good faith, the Parties hereby agree that they will first
attempt in good faith to resolve any controversy or claim arising out of or relating to this Agreement promptly by negotiations. If a controversy or claim should arise hereunder the manner of resolution of which is not addressed in Section 3.8,
the matter shall be referred to the Representatives. If the matter has not been resolved within [*] of the first meeting of the Representatives (which period may be extended by mutual agreement) concerning such matter, the Parties shall be free to
pursue all available recourse both at law and in equity. 
 14.9 Entire Agreement. This Agreement, together with the exhibits and
appendices hereto and any confidentiality agreement(s) executed in contemplation of this Agreement, contains the entire understanding of the Parties with respect to the subject matter hereof. All express or implied agreements and understandings,
either oral or written, heretofore made are expressly merged in and made a part of this Agreement. This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by both Parties hereto. 
 14.10 Headings. The captions to the several Articles and Sections hereof are not a part of this Agreement, but are merely guides or labels to
assist in locating and reading the several Articles and Sections hereof. 
 14.11 No Partnership. It is expressly agreed that the
relationship between SPRI and XOMA shall not constitute a partnership, joint venture or agency. Neither SPRI nor XOMA shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be
binding on the other, without the prior consent of the other Party to do so. 
 14.12 Exports. The Parties acknowledge that the export
of technical data, materials or products is subject to the exporting Party receiving any necessary export licenses and that the Parties cannot be responsible for any delays attributable to export controls which are beyond the reasonable control of
either Party. SPRI and XOMA agree not to export or re-export, directly or indirectly, any information, technical data, the direct product of such data, samples or equipment received or generated under this Agreement in violation of any applicable
export control laws or governmental regulations. SPRI and 

  

 -44- 

 
XOMA agree to obtain similar covenants from their licensees, sublicensees, or corporate partners, as the case may be, and contractors with respect to the
subject matter of this Section 14.12. 
 14.13 Waiver. The waiver by either Party hereto of any right hereunder or the failure to
perform or of a breach by the other Party shall not be deemed a waiver of any other right hereunder or of any other breach or failure by said other Party whether of a similar nature or otherwise. 
 14.14 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. 
  

 -45- 

 IN WITNESS WHEREOF, the Parties have caused their duly authorized officers to execute and deliver this
Agreement as of the Effective Date. 
  

					
	 SCHERING CORPORATION, acting through its
 Schering-Plough Research Institute division

		
	By:	 	 /s/ Robert Bertolini

		 	 Name:
	 	 Robert Bertolini

		 	 Title:
	 	 Chief Financial Officer

  

					
	XOMA (US) LLC
		
	By:	 	 /s/ John L. Castello

		 	 Name:
	 	 John L. Castello

		 	 Title:
	 	 Chairman of the Board, President and
 Chief Executive Officer

  

 -46- 

 Schedule 1.42 
 [*] 
 Schedule 1.61 
 [*] 
 Schedule 1.75 
 [*] 
 Schedule 7.13 
 [*] 
 Schedule 7.14 
 [*] 
  

 -47-Agreement dated July 28, 2006

 

 
 EXHIBIT 10.60 
 OMBNo 0990-0115 

							
		 	 1. THIS CONTRACT IS A RATED ORDER UNDER DPAS (15 CFR 350)
	 	 RATING
	 	 PAGE OF PAGES

	 AWARD/CONTRACT
	 		 	 N/A
	 	 1 33

		 		 		 	

  

					
	 2. CONTRACT (Proc. Inst. Ident.) NO.
	 	 3. EFFECTIVE DATE
	 	 4. REQUISITION/PURCHASE REQUEST/PROJECT NO.

	 HHSN266200600008C / ADB No. N01-AI-60008
	 	 July 28, 2006
	 	 DMID-2006-0307

  

							
	 5. ISSUED BY
	 	 CODE
	 	 6. ADMINISTERED BY (If other than Item 5)
	 	 CODE

	 National Institutes of Health Office of Acquisitions, NIAID Room 3214 6700-B Rockledge Dr., MSC 7612 Bethesda,
Maryland 20892-7612
	 		 	 MID RCB-A
	 	
		 		 		 	

  

									
	 7. NAME AND ADDRESS OF CONTRACTOR (No. street, county, state and ZIP Code)
	 		 	 8. DELIVERY
	 		 	
		 		 	 FOB ORIGIN
	 	 OTHER
	 	 (See below)

	 XOMA (US) LLC
	 		 		 	 FOB Destination

	 2910 Seventh Street
	 		 	 9/ DISCOUNT FOR PROMPT PAYMENT

	 Berkeley, CA 94710
	 		 	 N/A
	 		 	
		 		 		 		 	
		 		 	 10. SUBMIT INVOICES
	 	 ITEM
	 	
	 CODE
	 	 FACILITY CODE
	 	 ADDRESS SHOWN IN:
	 	 Article G.3

  

							
	 11. SHIP TO/MARK FOR
	  	 CODE
N/A
	  	 12.
PAYMENT
WILL BE
MADE BY
	  	 CODE
N/A

		  		  		  	
	 See Article F.12.
	  		  	 See Article
G.3.
	  	
		  		  		  	

  

			
	 13. AUTHORITY FOR USING OTHER FULL AND OPEN COMPETITION:
	 	 14. ACCOUNTING AND APPROPRIATION DATA

									
		 		 	 EIN 1-522154069-A1 CAN 68467101
	 	 $16,268,241
	 	 SOCC 25.55

	 10 U.S.C. 2304(c)( )
	 	 41 U.S.C. 253(c)(1)
	 		 		 	

											
	 15A. ITEM NO.
	 	 15B. SUPPLIES/SERVICES
	 	 15C. FISCAL YEAR
	 	 15D. AMOUNT
	 	 15E. UNIT PRICE
	 	 15F. AMOUNT

					
		 	 FY06
	 	 $9,956,463

	 Title: Development of A Final Drug Product for A Mixture of Monoclonal
	 	 FY07
	 	 $4,672,674

	 Antibodies for Type A Botulinum Neurotoxins
	 	 FY08
	 	 $1,639,104

	 Period: July 28, 2006 to July 27, 2009
	 		 	
	 Contract Type: Cost-Plus-Fixed-Fee (CPFF) Completion
	 		 	

  

			
	 15G. TOTAL AMOUNT OF CONTRACT
	 	 $16,268,241

 16. TABLE OF CONTENTS 

															
	 ()
	 	 SEC.
	 	 DESCRIPTION
	 	 PAGE#
	 	 ()
	 	 SEC.
	 	 DESCRIPTION
	 	 PAGE#

	 PART I - THE SCHEDULE
	 	 PART II - CONTRACT CLAUSES

		 	 A
	 	 SOLICITATION/CONTRACT FORM
	 	 1
	 		 	 I
	 	 CONTRACT CLAUSES
	 	 25

		 	 B
	 	 SUPPLIES OR SERVICES AND PRICE/COST
	 	 4
	 		 		 	 PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACH.
	 	
		 	 C
	 	 DESCRIPTION/SPECS./WORK STATEMENT
	 	 6
	 		 	 J
	 	 LIST OF ATTACHMENTS
	 	 32

		 	 D
	 	 PACKAGING AND MARKING
	 	 11
	 		 		 	 PART IV - REPRESENTATIONS AND INSTRUCTIONS
	 	
		 	 E
	 	 INSPECTION AND ACCEPTANCE
	 	 11
	 		 	 K
	 	 REPRESENTATIONS, CERTIFICATIONS AND OTHER STATEMENTS OF OFFERORS
	 	 33

		 	 F
	 	 DELIVERIES OR PERFORMANCE
	 	 12
	 		 		 		 	
		 	 G
	 	 CONTRACT ADMINISTRATION DATA
	 	 13
	 		 	 L
	 	 INSTRS., CONDS., AND NOTICES TO OFFERORS
	 	
		 	 H
	 	 SPECIAL CONTRACT REQUIREMENTS
	 	 16
	 		 	 M
	 	 EVALUATION FACTORS FOR AWARD
	 	

 CONTRACTING OFFICER WILL COMPLETE ITEM 17 OR 18 AS APPLICABLE 

			
	 17. CONTRACTOR’S NEGOTIATED AGREEMENT (Contractor is required to sign this document and return __3__ copies to
issuing office.) Contractor agrees to furnish and deliver all items or perform all the services set forth or otherwise identified above and on any continuation sheets for the consideration stated herein. The rights and obligations of the parties to
this contract shall be subject to and governed by the following documents: (a) this award/contract, (b) the solicitation, if any, and (c) such provisions, representations, certifications, and specifications, as are attached or incorporated by
reference herein. (Attachments are listed herein.)
	 	 18. AWARD (Contractor is not required to sign this document.) Your offer on Solicitation Number _
_________________________________, including the additions or changes made by you which additions or changes are set forth in full above, is hereby accepted as to the items listed above and on any continuation sheets. This award consummates the
contract which consists of the following documents: (a) the Government’s solicitation and your offer, and (b) this award/contract. No further contractual document is necessary.

  

			
	 19A. NAME AND TITLE OF SIGNER (Type or print)
	 	 20A. NAME OF CONTRACTING OFFICER

	 /s/ Christopher J. Margolin
	 	 Liem T. Nguyen, Contracting Officer

	 - Vice President, General Counsel and Secretary
	 	 Office of Acquisitions, DEA, NIAID, NIH, DHHS

													
	 19B.
	 	 NAME OF CONTRACTOR
	 	 19C.
	 	 DATE SIGNED
	 	 20B.
	 	 UNITED STATES OF AMERICA
	 	 20C. DATE SIGNED

		 	 /s/ Christoper J. Margolin
	 		 	 7/28/06
	 		 		 	 7/28/06

		 	 (Signature of person authorized to sign)
	 		 		 	 BY
	 	 (Signature of Contracting Officer)
	 	 /s/ Liem T. Nguyen

  

					
	 NSN 7540-01-152-8069
	 	 26-107
	 	 STANDARD FORM 26 (REV. 4-85)

	 PREVIOUS EDITION UNUSABLE
	 	 Computer Generated
	 	 Prescribed by GSA

		 		 	 FAR (48 CFR) 53.214(a)

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 DETAILED TABLE OF CONTRACT CONTENTS 
  

									
	 PART I - THE SCHEDULE

			
		 	 SECTION A – SOLICITATION/CONTRACT FORM 
	  	1
			
		 	 SECTION B - SUPPLIES OR SERVICES AND PRICES/COSTS
	  	
					
		 		 	 ARTICLE B.1.
	  	 BRIEF DESCRIPTION OF SUPPLIES OR SERVICES
	  	4
		 		 	 ARTICLE B.2.
	  	 ESTIMATED COST
	  	4
		 		 	 ARTICLE B.3.
	  	 PROVISIONS APPLICABLE TO DIRECT COSTS
	  	4
		 		 	 ARTICLE B.4.
	  	 ADVANCE UNDERSTANDINGS
	  	5
			
		 	 SECTION C - DESCRIPTION/SPECIFICATIONS/WORK STATEMENT
	  	
					
		 		 	 ARTICLE C.1.
	  	 STATEMENT OF WORK
	  	6
		 		 	 ARTICLE C.2.
	  	 REPORTING REQUIREMENTS
	  	6
		 		 	 ARTICLE C.3.
	  	 INVENTION REPORTING REQUIREMENTS
	  	11
			
		 	 SECTION D - PACKAGING, MARKING AND SHIPPING
	  	11
			
		 	 SECTION E - INSPECTION AND ACCEPTANCE
	  	11
			
		 	 SECTION F - DELIVERIES OR PERFORMANCE
	  	
					
		 		 	 ARTICLE F.1.
	  	 DELIVERIES
	  	12
		 		 	 ARTICLE F.2.
	  	 CLAUSES INCORPORATED BY REFERENCE
	  	13
			
		 	 SECTION G - CONTRACT ADMINISTRATION DATA
	  	
					
		 		 	 ARTICLE G.1.
	  	 PROJECT OFFICER
	  	13
		 		 	 ARTICLE G.2.
	  	 KEY PERSONNEL
	  	13
		 		 	 ARTICLE G.3.
	  	 INVOICE SUBMISSION
	  	14
		 		 	 ARTICLE G.4.
	  	 INDIRECT COST RATES
	  	15
		 		 	 ARTICLE G.5.
	  	 POST AWARD EVALUATION OF CONTRACTOR PERFORMANCE
	  	15
			
		 	 SECTION H - SPECIAL CONTRACT REQUIREMENTS
	  	
					
		 		 	 ARTICLE H.1.
	  	 HUMAN MATERIALS
	  	16
		 		 	 ARTICLE H.2.
	  	 HUMAN MATERIALS (ASSURANCE OF OHRP COMPLIANCE)
	  	16
		 		 	 ARTICLE H.3.
	  	 CONTINUED BAN ON FUNDING OF HUMAN EMBRYO RESEARCH
	  	17
		 		 	 ARTICLE H.4.
	  	 NEEDLE EXCHANGE
	  	17
		 		 	 ARTICLE H.5.
	  	 ANIMAL WELFARE
	  	17
		 		 	 ARTICLE H.6.
	  	 PROTECTION OF PERSONNEL WHO WORK WITH NONHUMAN PRIMATES
	  	17
		 		 	 ARTICLE H.7.
	  	 INFORMATION SECURITY
	  	17
		 		 	 ARTICLE H.8.
	  	 SALARY RATE LIMITATION LEGISLATION
	  	20
		 		 	 ARTICLE H.9.
	  	 PUBLICATION AND PUBLICITY
	  	20
		 		 	 ARTICLE H.10.
	  	 PRESS RELEASE
	  	21
		 		 	 ARTICLE H.11.
	  	 REPORTING MATTERS INVOLVING FRAUD, WASTE AND ABUSE
	  	21
		 		 	 ARTICLE H.12.
	  	 ANTI-LOBBYING
	  	21
		 		 	 ARTICLE H.13.
	  	 INTELLECTUAL PROPERTY OPTION TO COLABORATOR
	  	21

  

 2 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
  

									
		 		 	 ARTICLE H.14.
	 	 OBTAINING AND DISSEMINATING BIOMDEDICAL RESEARCH RESOURCES
	 	22
		 		 	 ARTICLE H.15.
	 	 SHARING RESEARCH DATA
	 	23
		 		 	 ARTICLE H.16.
	 	 POSSESSION USE AND TRANSFER OF SELECT BIOLOGICAL AGENT OR TOXINS
	 	23
		 		 	 ARTICLE H.17.
	 	 HOTEL AND MOTEL FIRE SAFETY ACT OF 1990
	 	24
		 		 	 ARTICLE H.18.
	 	 PROHIBITION ON CONTRACTOR INVOLVEMENT WITH TERRORIST ACTIVITIES
	 	24
		 		 	 ARTICLE H.19.
	 	 NIH POLICY ON ENHANCING PUBLIC ACCESS TO ACTIVITIES PUBLICATIONS RESULTING FROM NIH FUNDED RESEARCH
	 	24
		
	 PART II - CONTRACT CLAUSES
	 	
			
		 	 SECTION I - CONTRACT CLAUSES
	 	
					
		 		 	 ARTICLE I.1.
	 	 GENERAL CLAUSES FOR A COST-REIMBURSEMENT RESEARCH AND DEVELOPMENT CONTRACT
	 	25
		 		 	 ARTICLE I.2.
	 	 AUTHORIZED SUBSTITUTION OF CLAUSES
	 	28
		 		 	 ARTICLE I.3.
	 	 ADDITIONAL CONTRACT CLAUSES
	 	28
		 		 	 ARTICLE I.4.
	 	 ADDITIONAL FAR CONTRACT CLAUSES INCLUDED IN FULL TEXT
	 	29
		
	 PART III
	 	
			
		 	 SECTION J - LIST OF ATTACHMENTS
	 	32
		
	 PART IV
	 	
			
		 	 SECTION K - REPRESENTATIONS AND CERTIFICATIONS
	 	33

  

 3 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 SECTION B - SUPPLIES OR SERVICES AND PRICES/COSTS 
 ARTICLE B.1. BRIEF DESCRIPTION OF SUPPLIES OR SERVICES 
 The purpose
of this acquisition is to seek to advance the development of a mixture of three monoclonal antibodies (mAbs) as a therapeutic against Botulinum neurotoxin serotype A, which is a Category A threat agent. 
 ARTICLE B.2. ESTIMATED COST PLUS FIXED FEE 
  

	a.	The estimated cost of this contract is $15,347,397. 

  

	b.	The fixed fee for this contract is $920,844. The fixed fee shall be paid in installments based on the percentage of completion of work, as determined by the Contracting
Officer, and subject to the withholding provisions of the clauses ALLOWABLE COST AND PAYMENT and FIXED FEE referenced in the General Clause Listing in Part II, ARTICLE I.1. of the contract. Payment of fixed fee shall not be made in less than monthly
increments. 

  

	c.	The Government’s obligation, represented by the sum of the estimated cost plus fixed fee is $16,268,241. 

  

	d.	Total funds currently available for payment and allotted to this contract are $16,268,241, of which $15,347,397 represents the estimated costs, and of which $920,844 represents the
fixed fee. For further provisions on funding see the LIMITATION OF COSTS clause referenced in Part II, ARTICLE I.1., 

  

	e.	It is estimated that the amount currently allotted will cover performance of the contract through July 27, 2009. 

 ARTICLE B.3. PROVISIONS APPLICABLE TO DIRECT COSTS 
  

	a.	Items Unallowable Unless Otherwise Provided  

 Notwithstanding the clause, ALLOWABLE COST AND PAYMENT, incorporated in this contract, unless authorized in writing by the Contracting Officer, the costs of the following items or activities shall be unallowable as direct costs: 

 

	 	(1)	Acquisition, by purchase or lease, of any interest in real property; 

  

	 	(2)	Special rearrangement or alteration of facilities; 

  

	 	(3)	Purchase or lease of any item of general purpose office furniture or office equipment regardless of dollar value. (General purpose equipment is defined as any items of
personal property which are usable for purposes other than research, such as office equipment and furnishings, pocket calculators, etc.); 

  

	 	(4)	Travel to attend general scientific meetings; (5) Foreign travel (see paragraph b.(2) below); (6) Consultant costs; 

  

	 	(7)	Subcontracts; 

  

	 	(8)	Overtime; 

  

	 	(9)	Patient care costs; 

  

	 	(10)	Light Refreshment and Meal Expenditures 

  

 4 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 Requests to use contract funds to provide light refreshments and/or meals to either
federal or nonfederal employees must be submitted to the project officer, with a copy to the contracting officer, at least six (6) weeks in advance of the event. The request shall contain the following information: (a) name, date, and
location of the event at which the light refreshments and/or meals will be provided; (b) a brief description of the purpose of the event; (c) a cost breakdown of the estimated light refreshment and/or meal costs; (d) the number of
nonfederal and federal attendees receiving light refreshments and/or meals; and (e) if the event will be held somewhere other than a government facility, provide an explanation of why the event is not being held at a government facility.

 Refer to NIH Manual Chapter 1160-1, Entertainment, for more information on NIH=s policy on the use of appropriated funds for light
refreshments and meals. 
  

	b.	Travel Costs  

  

	 	(1)	Domestic Travel 

  

	 	(a)	Total expenditures for domestic travel (transportation, lodging, subsistence, and incidental expenses) incurred in direct performance of this contract shall not exceed
$27,399 without the prior written approval of the Contracting Officer. 

  

	 	(b)	The Contractor shall invoice and be reimbursed for all travel costs in accordance with Federal Acquisition Regulations (FAR) 31.205-46. 

 ARTICLE B.4. ADVANCE UNDERSTANDINGS 
 Other provisions of this
contract notwithstanding, approval of the following items within the limits set forth is hereby granted without further authorization from the Contracting Officer. 
  

	a.	Indirect Costs  

  

	 	(1)	Overhead and General and Administrative (G&A) Ceiling 

 A current negotiated indirect rate agreement is not in place at the time of the award. The proposed overhead rate – see Section J, Attachment 6 — and G&A rate of 32.2% will be ceiling for the purpose of funding until a
negotiated rate agreement with NIH is in effect. Once a negotiated Overhead and G&A rates agreement is in place, Overhead and G&A costs will be adjusted and reimbursed accordingly. 
  

	 	(2)	The Government is not obligated to pay any additional amount should the final indirect cost rates exceed the attached ceiling rates. In the event that the final indirect cost rates
are less than these negotiated ceiling rates, the Government’s obligation shall be reduced to conform to the lower rate. 

 Any costs over and above this cost ceiling shall not be reimbursed under this contract or any other Government contract, grant, or cooperative agreement. 
  

	b.	Subcontracts  

  

	 	(1)	Consent is provided to enter into a Cost-plus-fixed-fee type subcontract with SRI International, 333 Ravenswood Avenue, Menlo Park, CA 94025, in an amount not to exceed
$882,722. 

 The period of performance of this subcontract shall be from the date of contract award until July 27,
2009. Within 30 calendar days after receipt of written consent from the Contracting Officer, a copy of the final executed subcontract shall be provided to the Contracting Officer. 
  

	 	(2)	Consent is provided to enter into a Cost Reimbursement type subcontract with the University of California, San Francisco, Office of Research Administrator, 3333 California
Street, Suite 315, San Francisco, CA 94118, in an amount not to exceed $956,891. 

  

 5 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 The period of performance of this subcontract shall be from the date of contract
award until July 27, 2009. Within 30 calendar days after receipt of written consent from the Contracting Officer, a copy of the final executed subcontract shall be provided to the Contracting Officer 
  

	c.	Consultants  

 Consultant fees to be paid to the
following individuals: 
  

												
	 Name
	  	Rate	  	Number of
Days/Hours	  	Travel
Cost	  	Total Cost
Not to Exceed
	 Barbara Matthews – BioDirect
	  	$	2,200/day	  	18 days	  	$	3,000	  	$	42,600
	 Stephen Zale
	  	$	2,000/day	  	2 days	  			  	$	4,000
	 John Carpenter
	  	$	400/hour	  	150 hours	  			  	$	60,000

  

	d.	Confidential Treatment of Sensitive Information  

 The Contractor shall guarantee strict confidentiality of the information/data that it is provided by the Government during the performance of the contract. The Government has determined that the information/data that the Contractor will be
provided during the performance of the contract is of a sensitive nature. 
 Disclosure of the information/data, in whole or in part, by the
Contractor can only be made after the Contractor receives prior written approval from the Contracting Officer. Whenever the Contractor is uncertain with regard to the proper handling of information/data under the contract, the Contractor shall
obtain a written determination from the Contracting Officer. 
  

	e.	Contract Number Designation  

 On all correspondence
submitted under this contract, the contractor agrees to clearly identify the two contract numbers that appear on the face page of the contract as follows: 
 Contract No. HHSN266200600008C 
 ADB Contract No. N01-AI-60008 
 SECTION C - DESCRIPTION/SPECIFICATIONS/WORK STATEMENT 
 ARTICLE C.1. STATEMENT OF WORK 
 Independently and not as an agent of the Government, the Contractor shall furnish all the necessary
services, qualified personnel, material, equipment, and facilities, not otherwise provided by the Government as needed to perform the Statement of Work, SECTION J, ATTACHMENT 1, dated July 28, 2006, attached hereto and made a part of this
contract. 
 ARTICLE C.2. REPORTING REQUIREMENTS 
 All
reports required herein shall be submitted in paper copy and electronic format. 
 As part of the work to be performed under this RFP, the Contractor shall
prepare and deliver the following reports throughout the period of performance. For all reports the Contractor shall submit two (2) paper copies and two (2) electronic copies, comprising one (1) original paper and one
(1) electronic copy to the NIAID Contracting Officer and one (1) paper copy and one(1) electronic copy to the NIAID Project Officer. 
  

 6 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
  

	A.	Technical Reports  

  

	 	1.	Monthly Progress Report 

 On the due date specified
in the contract the Contractor shall submit a Monthly Progress Report. A Monthly Progress Report will not be required in the same month that the Annual Progress Report is submitted. The Monthly Progress Report shall include: 
  

	 	a)	Cover page that lists the contract number and title, the period of performance being reported, the contractor’s name, address, telephone number, fax number and email address
and the date of submission; 

  

	 	b)	SECTION I: INTRODUCTION - describes the purpose and scope of the contract effort; 

  

	 	c)	SECTION II: PROGRESS 

  

	 	i)	SECTION II Part A: OVERALL PROGRESS - A description of overall progress on the contract to date; 

  

	 	ii)	SECTION II Part B: MANAGEMENT AND ADMINISTRATIVE UPDATE – A description of all meetings, conference calls etc. that have taken place during the reporting period. Include
progress on administration and management issues (e.g. evaluating and managing subcontractors performance); 

  

	 	iii)	SECTION II Part C: TECHNICAL PROGRESS – For each activity document the results of work completed and cost incurred during the reporting period, in relation to proposed
progress, effort and budget. The report shall be in sufficient detail to explain any significant results achieved and preliminary conclusions resulting from analysis and scientific evaluation of data accumulated to date under the contract. The
report shall include a description of problems encountered and proposed corrective action; differences between planned and actual progress, why the differences have occurred and what correction actions are planned; preliminary conclusions resulting
from analysis and scientific evaluation of data accumulated to date under the project; 

  

	 	iv)	SECTION II Part D: - PROPOSED WORK - A summary of work proposed for the next reporting period; and 

  

	 	v)	Preprints and reprints of papers and abstracts shall be submitted with the Monthly Report. 

  

	 	2.	DRAFT Annual Progress Report 

 The Contractor shall
provide the Project Officer with two (2) copies of the Annual Progress Report in draft form twenty-eight (28) calendar days prior to the delivery date for the final version of the report. The Project Officer will review the draft
report and provide the Contractor with comments within fourteen (14) calendar days after receipt. The Annual Progress Report shall be corrected by the Contractor, if necessary. 
  

	 	3.	Annual Progress Report 

 On the due date specified
in the contract the Contractor shall submit an Annual Progress Report. An Annual Progress Report will not be required for the period when the Final Report is due. Each Annual Report shall include: 
  

	 	a)	A Cover page that lists the contract number and title, the period of performance being reported, the contractor’s name, address, telephone number, fax number and email address
and the date of submission; 

  

	 	b)	SECTION I: EXECUTIVE SUMMARY – A brief overview of the work completed, and the major accomplishments achieved during the current reporting period; 

  

	 	c)	SECTION II: PROGRESS 

  

	 	i)	SECTION II Part A: OVERALL PROGRESS - A description of overall progress on the contract to date; 

  

	 	ii)	SECTION II Part B: MANAGEMENT AND ADMINISTRATIVE UPDATE – A description of all meetings, conference calls etc. that have taken place during the reporting period. Include
progress on administration and management issues (e.g. evaluating and managing subcontractors performance); 

  

 7 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
  

	 	iii)	SECTION II Part C: TECHNICAL PROGRESS – For each activity document the results of work completed and cost incurred during the reporting period, in relation to proposed
progress, effort and budget. The report shall be in sufficient detail to explain any significant results achieved and preliminary conclusions resulting from analysis and scientific evaluation of data accumulated to date under the contract. The
report shall include a description of problems encountered and proposed corrective action; differences between planned and actual progress, why the differences have occurred and what correction actions are planned; preliminary conclusions resulting
from analysis and scientific evaluation of data accumulated to date under the project; 

  

	 	iv)	SECTION II Part D: - PROPOSED WORK - A summary of work proposed for the next reporting period; 

  

	 	v)	Preprints and reprints of papers and abstracts shall be submitted with the Monthly Progress Report; and 

  

	 	vi)	A summary of any inventions developed during the course of the contract. 

  

	 	4.	Draft Final Report 

 The Contractor shall provide
the Project Officer with two (2) copies of the Final Report in draft form twenty-eight (28) calendar days prior to the delivery date for the final version of the Final Report. The Project Officer will review the Draft Final Report and
provide the Contractor with comments within fourteen (14) calendar days after receipt. The Final Report shall be corrected by the Contractor, if necessary. 
  

	 	5.	Final Report 

 The Final Report shall be submitted
on expiration date of the contract. An Annual Progress Report shall not be required for the period when the Final Report is due. The Final Report shall document and summarize the results of the entire contract period of performance. This report
shall be in sufficient detail to describe comprehensively the results achieved. The Final Report shall include: 
  

	 	a)	a cover page to include the contract number, contract title, performance period, Contractor’s name and address, telephone number, fax number, email address and submission date;

  

	 	b)	SECTION I: EXECUTIVE SUMMARY – Summarize the purpose and scope of the contract effort including a summary of the major accomplishments relative to the specific activities set
forth in the Statement of Work. 

  

	 	c)	SECTION II: RESULTS – A detailed description of the work-performed, the results obtained, and the impact of the results and the scientific or public health community, including
a listing of all manuscripts (published and in preparation) and abstracts presented during the entire period of performance, and a summary of all inventions. 

  

	 	6.	Invention Report Requirement 

 All reports and
documentation required by FAR Clause 52.227-13 including: the invention disclosure report, the confirmatory license, and the government support certification, shall be directed to the Office of Extramural Inventions and Technology Resources Branch,
OPERA, NIH, 6705 Rockledge Drive, Room 1040 A, MSC 7980, Bethesda, Maryland 20892-7980 (Telephone: 301-435-1986). In addition, one copy of an annual utilization report, and a copy of the final invention statement, shall be submitted to the
Contracting Officer. The final invention statement (see FAR 27.303(a)(2)(ii)) shall be submitted on the expiration date of the contract to the Contracting Officer. 
 The annual utilization report shall be submitted in accordance with ARTICLE F.1. DELIVERIES, of this contract. The final invention statement (see FAR 27.303(a)(2)(ii)) shall be submitted on the expiration date of the
contract to the following address: 
 Contracting Officer, Office of Acquisitions 
 National Institutes of Health, DHHS 
 National
Institute of Allergy and Infectious Diseases 
 Room 3214, MSC 7612 
 6700B Rockledge Drive 
 Bethesda, Maryland
20892 – 7612 
  

 8 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 If no invention is disclosed or no activity has occurred on a previously disclosed
invention during the applicable reporting period, a negative report shall be submitted to the Contracting Officer at the address listed above. 
 To assist contractors in complying with invention reporting requirements of the clause, the NIH has developed “Interagency Edison,” an electronic invention reporting system. Use of Interagency Edison is encouraged as it
streamlines the reporting process and greatly reduces paperwork. Access to the system is through a secure interactive Web site to ensure that all information submitted is protected. Interagency Edison and information relating to the capabilities of
the system can be obtained from the Web (http://www.iedison.gov), or by contacting the Office of Extramural Inventions and Technology Resources Branch, OPERA, NIH. 
  

	 	7.	Summary of Salient Results 

 The Contractor shall
submit, with the Final Report, a Summary of Salient results achieved during the performance of the contract. 
  

	 	8.	Milestone Report 

 The contractor shall submit a
Milestone Report as specified in the contract after the completion of each Milestone unless otherwise agreed by the Principal Investigator and the Project Officer. Milestone Reports may be appended to Monthly Progress Reports if approved by the
NIAID Project Officer. The Milestone Report shall include: 
  

	 	a)	a Cover page that lists the contract number and title, the milestone being reported, the period of performance being reported, the contractor’s name, address, telephone number,
fax number and email address and the date of submission; 

  

	 	b)	SECTION I: INTRODUCTION – A brief overview of the purpose and scope of the contract effort and the specific milestone that is covered in the report; and

  

	 	c)	SECTION II: PROGRESS 

  

	 	i)	SECTION II Part A: OVERALL PROGRESS - A description of overall progress on the contract to date and the milestone specifically; 

  

	 	ii)	SECTION II Part B: TECHNICAL PROGRESS – For the milestone document the results of work completed, a summary of data that supports the completion of the milestone and an
analysis of the results. The report shall be in sufficient detail to explain any significant results achieved and preliminary conclusions resulting from analysis and scientific evaluation of data. The report shall include a description of problems
encountered, corrective actions implemented; differences between planned and actual progress and why the differences occurred, conclusions resulting from analysis and scientific evaluation of data accumulated to date under the project.

  

	B.	Technical Reports Delivery Schedule 

 Satisfactory
performance of the contract is defined as satisfactorily performing the Statement of Work and delivering the following items. 
  

 9 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
  

									
	Item	  	 Type of Deliverable
	  	 Initial Report Due
	  	 Recipients & Number of Copies
	  	 Subsequent Reports Due

	  	  	  	  
	1.	  	Monthly Progress Report	  	The 15th of the month following the first full month of
contract award.	  	1 Original and 1 electronic to CO 2 Paper copies and 1 electronic to PO	  	Monthly, due on or before the 15th of each month. A Monthly
Progress Report will not be due when an Annual Progress Report or Final report is due.
					
	2.	  	Draft Annual Progress Report	  	28 days before the anniversary date of contract	  	See Above	  	Annually, submitted 28 days before the anniversary date. An Annual Progress Report is not due when a Final Report is due.
					
	3.	  	Annual Progress Report	  	Anniversary date of contract	  	See Above	  	Annually, on the anniversary date of the contract.
					
	4.	  	Draft Final Report	  	28 days before the expiration date of the contract.	  	See Above	  	Twenty eight (28) days prior to the final due date.
					
	5.	  	Final Report	  	On the expiration date of the contract.	  	See Above	  	On the expiration date of the contract.
					
	6.	  	Invention Report	  	On the expiration date of the contract.	  	See Above	  	Submit along with the Final Report.
					
	7.	  	Summary of Salient Results	  	On the expiration date of the contract.	  	See Above	  	Submit along with the Final Report.
					
	8	  	Milestone Report	  	See A.8. above	  		  	

  

	C.	Other Reports/Deliverables 

 The following are also
considered deliverable under this contract: Assay Development Reports, Process Development Reports, Validation Protocols, Validation Reports, testing protocols, Technology Transfer Reports for assays and processes developed and/or improved under the
contract, interim and final GLP, cGMP and GCP audit reports, SOPs, Batch Production Records, Master Production Records, Certificate of Analysis for cGMP products, CMC section for FDA submission, copies of FDA correspondence, and regulatory
documentation required by the FDA. 
 All physical materials produced under the contract, including reagents, test article/product, and
samples from nonclinical safety studies. The Contractor shall package and ship according to all applicable federal guidelines for packaging and shipping hazardous material or cGMP product. 
 Bulk Drug Substance: All remaining Bulk Drug Substance not used to produce final drug product shall be delivered to NIAID as directed by the NIAID
Project Officer. 
 Final Drug Product: In addition, to each type of final drug product required to complete the IND-enabling studies
to be performed as part of this statement of work, the Contractor shall deliver, at a minimum, to NIAID as directed by the NIAID Project Officer: 
  

	 	•	 	One thousand (1000) vials of formulated mixture of three monoclonal antibodies, vialed and labeled with a Certificate of Analysis; and 

  

	 	•	 	Five hundred (500) vials of each of three single monoclonal antibodies, formulated, vialed and labeled with a Certificate of Analysis. 

  

	D.	Copies of reports shall be sent to the following addresses: 

 Liem T. Nguyen, Contracting Officer 
 Office of Acquisitions, DEA, NIAD, NIH, DHHS 
 6700 B Rockledge Dr., Room 3214 
 Bethesda, MD
20817 
 and 
 Katherine A.
Taylor, Ph.D., 
 Project Officer, DMID, NIAID, NIH, DHHS 
 6610 Rockledge Dr., Room 5123 
 Bethesda, MD 20892 
  

 10 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 ARTICLE C.3. INVENTION REPORTING REQUIREMENT 
 All reports and documentation required by FAR Clause 52.227-13 including, but not limited to, the invention disclosure report, the confirmatory license, and the
government support certification, shall be directed to the Extramural Inventions and Technology Resources Branch, OPERA, NIH, 6705 Rockledge Drive, Room 1040 A, MSC 7980, Bethesda, Maryland 20892-7980 (Telephone: 301-435-1986). In addition, one copy
of an annual utilization report, and a copy of the final invention statement, shall be submitted to the Contracting Officer. The final invention statement (see FAR 27.303(a)(2)(ii)) shall be submitted to the Contracting Officer on the expiration
date of the contract. 
 The annual utilization report shall be submitted in accordance with ARTICLE F.1. DELIVERIES of this contract. The final invention
statement (see FAR 27.303(a)(2)(ii)) shall be submitted on the expiration date of the contract to the following address: 
 Contracting
Officer 
 National Institutes of Health 
 National Institute of Allergy and Infectious Diseases 
 Office of Acquisition 
 6700B Rockledge Drive, Room 3214 
 Bethesda,
Maryland 20892 - 7612 
 If no invention is disclosed or no activity has occurred on a previously disclosed invention during the applicable reporting period,
a negative report shall be submitted to the Contracting Officer at the address listed above. 
 To assist contractors in complying with invention reporting
requirements of the clause, the NIH has developed “Interagency Edison,” an electronic invention reporting system. Use of Interagency Edison is encouraged as it streamlines the reporting process and greatly reduces paperwork. Access to the
system is through a secure interactive Web site to ensure that all information submitted is protected. Interagency Edison and information relating to the capabilities of the system can be obtained from the Web (http://www.iedison.gov), or by
contacting the Extramural Inventions and Technology Resources Branch, OPERA, NIH. 
 SECTION D - PACKAGING, MARKING AND SHIPPING

 All deliverables required under this contract shall be packaged, marked and shipped in accordance with Government specifications. At a minimum, all
deliverables shall be marked with the contract number and contractor name. The Contractor shall guarantee that all required materials shall be delivered in immediate usable and acceptable condition. 
 SECTION E - INSPECTION AND ACCEPTANCE 
  

	a.	The Contracting Officer or the duly authorized representative will perform inspection and acceptance of materials and services to be provided. 

  

	b.	For the purpose of this SECTION, the NIAID Project Officer is the authorized representative of the Contracting Officer. 

  

	c.	Inspection and acceptance will be performed at: DMID, NIAID, NIH, DHHS, 6610 Rockledge Drive, Bethesda, MD, 20892. 

 Acceptance may be presumed unless otherwise indicated in writing by the Contracting Officer or the duly authorized representative within 30 days of
receipt. 
  

	d.	This contract incorporates the following clause by reference, with the same force and effect as if it were given in full text. Upon request, the Contracting Officer will make its
full text available. 

  

 11 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 FAR Clause 52.246-5, Inspection of Services - Cost-Reimbursement (April 1984).

 FAR Clause 52.246-8, Inspection Of Research And Development—Cost Reimbursement (May 2001). 
 SECTION F - DELIVERIES OR PERFORMANCE 
 ARTICLE
F.1. DELIVERIES 
 Satisfactory performance of the final contract shall be deemed to occur upon performance of the work described in Article C.1. and upon
delivery and acceptance by the Contracting Officer, or the duly authorized representative, of the following items in accordance with the stated delivery schedule: 
  

	a.	The items specified below as described in SECTION C, ARTICLE C.2. will be required to be delivered F.O.B. 

 Destination as set forth in FAR 52.247-35, F.O.B. DESTINATION, WITHIN CONSIGNEES PREMISES (APRIL 1984), and in accordance with and by the date(s)
specified below: 
  

									
	 Item No.
	  	 Type of Report
	  	 No. of Copies
	  	 Addresses/Distribution
	  	 Due Date

		  	 PROGRESS REPORTS
	  		  		  	
					
	 1.
	  	 Monthly Technical Progress Report
	  	3 paper 2 electronic	  	CO: Original hardcopy and one (1) electronic copy; PO: Two (2) paper copies and one (1) electronic	  	The 15th of each month following the first full month of
contract award. The monthly report will not be required on months when an Annual Technical Report is due.
					
	 2.
	  	 Draft Annual Progress Report
	  	See above	  	Same as CO and PO above	  	Annually, submitted twenty eight (28) days before the anniversary date.
					
	 3.
	  	 Annual Progress Report
	  	See above	  	Same as CO and PO above	  	Annually, on the anniversary date of the contract. An Annual Progress Report is not due when a Final Report is due.
					
	 4.
	  	 Draft Final Report
	  	See above	  	Same as CO and PO above	  	Twenty eight (28) calendar days prior to completion date of the contract
					
	 5.
	  	 Final Report
	  	See above	  	Same as CO and PO above	  	On the expiration date of the contract.
					
	 6.
	  	 Invention Report
	  	See above	  	Same as CO and PO above	  	Submit along with the Final Report.
					
	 7.
	  	 Summary of Salient Results
	  	See above	  	Same as CO and PO above	  	Submit along with the Final Report.
					
	 8.
	  	 Milestone Report
	  	See paragraph A.8. above	  	Same as CO and PO above.	  	
					
		  	 Other Reports/ Deliverables
	  		  		  	
					
	 9.
	  	 See paragraph C. Other Reports/Deliverables
 above
	  	Same as above	  	Same as PO above	  	As directed by the NIAID PO

  

	b.	The above items shall be addressed and delivered to: 

  

					
	 Addressee
	 	 Deliverable Item No.
	 	 Quantity

	 Liem T. Nguyen, Contracting Officer
 6700B Rockledge Drive
 Rm 3214
 Rockledge Drive
 Bethesda, MD 20892
	 	1. through 8.	 	Original paper and one (1) electronic
			
	 Kathy M. Taylor, Ph.D.
 Project Officer
 6610 Rockledge Drive, Room 5123 Bethesda, MD 20892
	 	1. through 9.	 	Two (2) paper copies and one (1) electronic
			
	 EITRB, Office of Biodefense
 Research Affairs,
NIH
	 	6.	 	Original paper and one (1) electronic

  

 12 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 ARTICLE F.2. CLAUSES INCORPORATED BY REFERENCE, FAR 52.252-2 (FEBRUARY 1998) 
 This contract incorporates the following clause by reference, with the same force and effect as if it were given in full text. Upon request, the Contracting Officer will
make its full text available. Also, the full text of a clause may be accessed electronically at this address: http://www.arnet.gov/far/. 
 FEDERAL ACQUISITION REGULATION (48 CFR CHAPTER 1) CLAUSE: 
 52.242-15, Stop Work Order (August 1989) with Alternate
I (April 1984). 
 SECTION G - CONTRACT ADMINISTRATION DATA 
 ARTICLE G.1. PROJECT OFFICER 
 The following Project Officer(s) will represent the
Government for the purpose of this contract: 
 Katherine A. Taylor, Ph.D. 
 OBRA, DMID, NIAID, NIH, DHHS 
 6610 Rockledge
Drive, Room 5123 
 Bethesda, MD 20892 
 Phone: 301-451-5068 
 Email: ktaylor@niaid.nih.gov 
 The Project Officer is responsible for: (1) monitoring the Contractor’s technical progress, including the surveillance and assessment of performance and recommending to the Contracting Officer changes in
requirements; (2) interpreting the Statement of Work and any other technical performance requirements; (3) performing technical evaluation as required; (4) performing technical inspections and acceptances required by this contract;
and (5) assisting in the resolution of technical problems encountered during performance. 
 The Contracting Officer is the only person with authority
to act as agent of the Government under this contract. Only the Contracting Officer has authority to: (1) direct or negotiate any changes in the Statement of Work; (2) modify or extend the period of performance; (3) change the
delivery schedule; (4) authorize reimbursement to the Contractor any costs incurred during the performance of this contract; or (5) otherwise change any terms and conditions of this contract. 
 The Contracting Officer hereby delegates the Project Officer as the Contracting Officer’s authorized representative responsible for signing software license
agreements issued as a result of this contract. 
 The Government may unilaterally change its Project Officer designation. 
 ARTICLE G.2. KEY PERSONNEL 
 Pursuant to HHSAR Clause 352.270-5, Key
Personnel, incorporated in Section I of this contract, the following individual(s) is/are considered to be essential to the work being performed hereunder: 
  

			
	 Name
	 	 Title

	 Milan T. Tomic, Ph.D.
	 	Principal Investigator

  

 13 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 Prior to diverting any of the specified individuals to other programs, the Contractor shall notify
the Contracting Officer reasonably in advance and shall submit justification (including proposed substitutions) in sufficient detail to permit evaluation of the impact on the program. No diversion shall be made by the Contractor without the written
consent of the Contracting Officer; provided, that the Contracting Officer may ratify in writing such diversion and such ratification shall constitute the consent of the Contracting Officer. The contract may be modified from time to time during the
course of the contract to either add or delete personnel, as appropriate 
 ARTICLE G.3. INVOICE SUBMISSION/CONTRACT FINANCING REQUEST 
  

	a.	Invoice/Financing Request Instructions and Contract Financial Reporting for NIH Cost-Reimbursement Type Contracts NIH(RC)-4 are attached and made part of this contract. The
instructions and the following directions for the submission of invoices/financing request must be followed to meet the requirements of a “proper” payment request pursuant to FAR 32.9. 

 These instructions also provide for the submission of financial and personnel reporting required by HHSAR 342.7002. 
  

	 	(1)	Invoices/financing requests shall be submitted as follows: 

  

	 	(a)	To be considered a “proper” invoice in accordance with FAR 32.9, each invoice shall clearly identify the two contract numbers that appear on the face page of the contract
as follows: 

 Contract No. HHSN266200600008C 
 ADB Contract No. N01-AI-60008 
  

	 	(b)	An original and two copies to the following designated billing office: 

 Contracting Officer 
 Office of Acquisitions, DEA 
 National Institute of Allergy and Infectious Diseases, NIH, DHHS 
 Room 3214, MSC 7612 
 6700B Rockledge Drive 
 BETHESDA MD 20892-7612 
  

	 	(2)	Inquiries regarding payment of invoices should be directed to the designated billing office, 301-451-3687. 

  

	 	b.	The Contractor shall include the following certification on every invoice for reimbursable costs incurred with Fiscal Year funds subject to the salary rate limitation provisions as
specified in SECTION H of this contract. For billing purposes, certified invoices are required for the billing period during which the applicable Fiscal Year funds were initially charged through the final billing period utilizing the applicable
Fiscal Year funds: 

 “I hereby certify that the salaries charged in this invoice are in compliance with the applicable
Public Law Number for the applicable Fiscal Year as stated in SECTION H of the above referenced contract.” 
  

	 	c.	Cost and Personnel Reporting, and Variances from the Negotiated Budget 

  

	 	(1)	The contractor agrees to provide a detailed breakdown on invoices of the following cost categories: 

  

	 	(a)	Direct Labor - List individuals by name, title/position, hourly/annual rate, level of effort, and amount claimed 

  

	 	(b)	Bonus 

  

	 	(c)	Fringe Benefits (cite rate, base and amount) 

  

	 	(d)	Facility Costs (cite rate, base and amount) 

  

	 	(e)	Materials & Supplies - Include detailed breakdown when total amount is over $1,000 

  

 14 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
  

	 	(f)	Travel (Domestic and Foreign) - Identify travelers, dates, destination, purpose of trip, and amount. Cite COA, if appropriate. List separately, domestic travel, general scientific
meeting travel, and foreign travel 

  

	 	(g)	Workshops and Advisory Committee Meeting Expenses 

  

	 	(h)	Consultant Fees (Honoraria and Instructor Fees) - Identify individuals and amounts 

  

	 	(i)	Freight & Postage 

  

	 	(j)	CRS Allocated (cite base, rate and amount) 

  

	 	(k)	Glassware allocated (cite base, rate and amount) 

  

	 	(l)	Subcontracts - Attach subcontractor invoice(s) 

  

	 	(m)	Equipment - Cite authorization and amount. 

  

	 	(n)	G&A (cite rate, base and amount) 

  

	 	(o)	Total Cost 

  

	 	(p)	Fixed Fee 

  

	 	(q)	Total CPFF 

 Monthly invoices must include the cumulative
total expenses to date, adjusted (as applicable) to show any amounts suspended by the Government. 
  

	 	(2)	The Contractor agrees to immediately notify the Contracting Officer in writing if there is an anticipated overrun (any amount) or unexpended balance (greater than 10 percent) of the
amount allotted to the contract, and the reasons for the variance. Also refer to the requirements of the Limitation of Funds and Limitation of Cost Clauses in the contract. 

 ARTICLE G.4. INDIRECT COST RATES 
 In accordance with Federal Acquisition Regulation (FAR) (48 CFR Chapter 1) Clause
52.216-7 (d)(2), Allowable Cost and Payment incorporated by reference in this contract in Part II, Section I, the cognizant Contracting Officer representative responsible for negotiating provisional and/or final indirect cost rates is identified as
follows: 
 Director, Division of Financial Advisory Services 
 Office of Acquisition Management and Policy 
 National Institutes of Health 
 6100 Building, Room 6B05 6100 
 EXECUTIVE BLVD
MSC-7540 
 BETHESDA MD 20892-7540 
 These rates
are hereby incorporated without further action of the Contracting Officer. 
 ARTICLE G.5. POST AWARD EVALUATION OF CONTRACTOR PERFORMANCE 

 

	a.	Contractor Performance Evaluations 

 Interim and
final evaluations of contractor performance will be prepared on this contract in accordance with FAR 42.15. The final performance evaluation will be prepared at the time of completion of work. In addition to the final evaluation, interim evaluations
will be prepared bi-annually to coincide with the anniversary date of the contract. 
 Interim and final evaluations will be provided to the
Contractor as soon as practicable after completion of the evaluation. The Contractor will be permitted thirty days to review the document and to submit additional information or a rebutting statement. If agreement cannot be reached between the
parties, the matter will be referred to an individual one level above the Contracting Officer, whose decision will be final. 
 Copies of the
evaluations, contractor responses, and review comments, if any, will be retained as part of the contract file, and may be used to support future award decisions. 
  

	b.	Electronic Access to Contractor Performance Evaluations 

 Contractors that have Internet capability may access evaluations through a secure Web site for review and comment by completing the registration form that can be obtained at the following address: 
 http://oamp.od.nih.gov/OD/CPS/cps.asp 
  

 15 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 The registration process requires the contractor to identify an individual that will
serve as a primary contact and who will be authorized access to the evaluation for review and comment. In addition, the contractor will be required to identify an alternate contact who will be responsible for notifying the cognizant contracting
official in the event the primary contact is unavailable to process the evaluation within the required 30-day time frame. 
 SECTION H -
SPECIAL CONTRACT REQUIREMENTS 
 ARTICLE H.1. HUMAN MATERIALS 
 The acquisition and supply of all human specimen material (including fetal material) used under this contract shall be obtained by the Contractor in full compliance with applicable State and Local laws and the provisions of the Uniform
Anatomical Gift Act in the United States, and no undue inducements, monetary or otherwise, will be offered to any person to influence their donation of human material. 
 ARTICLE H.2. HUMAN MATERIALS (ASSURANCE OF OHRP COMPLIANCE) 
 The acquisition and supply of all human specimen
material (including fetal material) used under this contract shall be obtained by the Contractor in full compliance with applicable State and Local laws and the provisions of the Uniform Anatomical Gift Act in the United States, and no undue
inducements, monetary or otherwise, will be offered to any person to influence their donation of human material. 
 The Contractor shall provide written
documentation that all human materials obtained as a result of research involving human subjects conducted under this contract, by collaborating sites, or by subcontractors identified under this contract, were obtained with prior approval by the
Office for Human Research Protections (OHRP) of an Assurance to comply with the requirements of 45 CFR 46 to protect human research subjects. This restriction applies to all collaborating sites without OHRP-approved Assurances, whether domestic or
foreign, and compliance must be ensured by the Contractor. 
 Provision by the Contractor to the Contracting Officer of a properly completed “Protection
of Human Subjects Assurance Identification/IRB Certification/Declaration of Exemption”, Form OMB No. 0990-0263 (formerly Optional Form 310), certifying IRB review and approval of the protocol from which the human materials were obtained
constitutes the written documentation required. The human subject certification can be met by submission of a self designated form, provided that it contains the information required by the “Protection of Human Subjects Assurance
Identification/IRB Certification/Declaration of Exemption”, Form OMB No. 0990-0263 (formerly Optional Form 310). 
 ARTICLE H.3. CONTINUED BAN
ON FUNDING OF HUMAN EMBRYO RESEARCH 
  

	a.	Pursuant to Public Law(s) cited in paragraph b. , below, NIH is prohibited from using appropriated funds to support human embryo research. Contract funds may not be used for
(1) the creation of a human embryo or embryos for research purposes; or (2) research in which a human embryo or embryos are destroyed, discarded, or knowingly subjected to risk of injury or death greater than that allowed for research on
fetuses in utero under 45 CFR 46.204(b) and Section 498(b) of the Public Health Service Act (42 U.S.C. 289g(b)). The term “human embryo or embryos” includes any organism, not protected as a human subject under 45 CFR 46 as of the date
of the enactment of this Act, that is derived by fertilization, parthenogenesis, cloning, or any other means from one or more human gametes or human diploid cells. 

 Additionally, in accordance with a March 4, 1997 Presidential Memorandum, Federal funds may not be used for cloning of human beings. 
  

							
	b.	  	Public Law and Section No.	  	Fiscal Year	  	Period Covered
				
		  	P.L. 109-149, Title V-General Provisions	  	2006	  	10/1/2005-9/30/2006
		  	Section 509	  		  	

  

 16 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 ARTICLE H.4. NEEDLE EXCHANGE 
  

	a.	Pursuant to Public Law(s) cited in paragraph b., below, contract funds shall not be used to carry out any program of distributing sterile needles or syringes for the hypodermic
injection of any illegal drug. 

  

							
	b.	  	Public Law and Section No.	  	Fiscal Year	  	Period Covered
				
		  	P.L. 109-149, Title V-General Provisions	  	2006	  	10/1/2005-9/30/2006
		  	 Section 505
	  		  	

 ARTICLE H.5. ANIMAL WELFARE 
 All research involving live, vertebrate animals shall be conducted in accordance with the Public Health Service Policy on Humane Care and Use of Laboratory Animals. This policy may be accessed at: 
 http://grants1.nih.gov/grants/olaw/references/phspol.htm 
 ARTICLE H.6. PROTECTION OF PERSONNEL WHO WORK WITH NONHUMAN PRIMATES 
 All contractor personnel who work with nonhuman primates or enter
rooms or areas containing nonhuman primates shall comply with the procedures set forth in NIH Policy Manual 3044-2, entitled, “Protection of NIH Personnel Who Work with Nonhuman Primates,” located at the following URL: 
 http://www1.od.nih.gov/oma/manualchapters/intramural/3044-2/ 
 ARTICLE H.7. INFORMATION SECURITY 
 The Statement of Work (SOW) requires the contractor to develop or access Federal
automated information systems; therefore, the contractor shall comply with the “DHHS Information Security Program Policy” (http://www.hhs.gov/read/irmpolicy/FINALHHSInformationSecurityProgram”.doc) as set forth
below. The contractor shall include this provision in any subcontract awarded under this contract. 
  

	a.	Information Type 

  

	 	[X]	Administrative, Management and Support Information: 

  

	 	[X]	Mission Based Information: 

  

	b.	Security Categories and Levels 

  

	 	****	(NOTE: The resultant contract will include the Security Categories and Levels, however for the purposes of this RFP, the Security Categories and Levels are specified in
SECTION L.2.b. Technical Proposal Instructions of this RFP.) **** 

  

									
	Confidentiality	  	Level:	  	[    ] Low	  	[X] Moderate	  	[    ] High
	Integrity	  	Level:	  	[X] Low	  	[    ] Moderate	  	[    ] High
	Availability	  	Level:	  	[X] Low	  	[    ] Moderate	  	[    ] High
					
	Overall	  	Level:	  	[X] Low	  	[    ] Moderate	  	[    ] High

  

 17 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
  

	c.	Position Sensitivity Designations 

  

	 	(1)	The following position sensitivity designations and associated clearance and investigation requirements apply under this contract: 

  

	 	[    ]	Level 6: Public Trust - High Risk (Requires Suitability Determination with a BI). Contractor employees assigned to a Level 6 position are subject to a Background
Investigation (BI). 

  

	 	[    ]	Level 5: Public Trust - Moderate Risk (Requires Suitability Determination with NACIC, MBI or LBI). Contractor employees assigned to a Level 5 position with no previous
investigation and approval shall undergo a National Agency Check and Inquiry Investigation plus a Credit Check (NACIC), a Minimum Background Investigation (MBI), or a Limited Background Investigation (LBI). 

  

	 	[X]	Level 1: Non Sensitive (Requires Suitability Determination with an NACI). Contractor employees assigned to a Level 1 position are subject to a National Agency Check and
Inquiry Investigation (NACI). 

  

	 	(2)	The contractor shall submit a deliverable, by name, position and responsibility, of all IT staff working under the contract. The roster shall be submitted to the Project Officer,
with a copy to the Contracting Officer, within 14 days of the effective date of the contract. Any revisions to the Roster as a result of staffing changes shall be submitted within fifteen (15) calendar days of the change. The Contracting
Officer shall notify the contractor of the appropriate level of suitability investigations to be performed. An electronic template, ARoster of Employees Requiring Suitability Investigations,@ is available for contractor use at:

 http://ais.nci.nih.gov/forms/Suitability-roster.xls 
 Upon receipt of the Government=s notification of applicable Suitability Investigation required, the contractor shall complete and submit the
required forms within 30 days of the notification. Additional submission instructions can be found at the ANIAID Information Technology Security Policies, Background Investigation Process@ website: http://ais.nci.nih.gov.

 (NOTE: The website listed at http://ais.nci.nih.gov provides information about IT Security Policies and the background investigation
process. NCI points of contact do not apply to this acquisition. Contact your NIAID contract specialist for applicable contact information.) 
 Contractor employees who have had a background investigation conducted by the U.S. Office of Personnel Management (OPM) within the last five years may only require an updated or upgraded investigation. 
  

	 	(3)	Contractor employees shall comply with the DHHS criteria for the assigned position sensitivity designations prior to performing any work under this contract. The following
exceptions apply: 

 Levels 5 and 1: Contractor employees may begin work under the contract after the contractor has
submitted the name, position and responsibility of the employee to the Project Officer, as described in paragraph c.(2) above. 
 Level
6: In special circumstances the Project Officer may request a waiver of the preappointment investigation. If the waiver is granted, the Project Officer will provide written authorization for the contractor employee to work under the contract.

  

	d.	Systems Security Plan 

 The contractor shall protect
Federal automated information systems that are developed or accessed by the contractor. System security shall be accomplished in accordance with the contractor=s System Security Plan dated (upon award). The plan must: 
  

	 	(1)	Include a detailed plan of present and proposed systems security programs commensurate with the size and complexity of the requirements of the Statement of Work. The contractor
shall use the NIH Systems Security Plan Template (detailed) at http://irm.cit.nih.gov/security/secplantemp.doc or NIH Systems Security Plan Outline (outline only) at
http://irm.cit.nih.gov/nihsecurity/Security_Plan_Outline.doc. 

  

 18 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 Include an acknowledgment of its understanding of the security requirements.

 Provide similar information for any proposed subcontractor developing or accessing an AIS. 
  

	e.	Rules of Behavior 

 The contractor shall comply with
the NIH Information Technology General Rules of Behavior at: http://irm.cit.nih.gov/security/nihitrob.html. 
  

	f.	Information Security Training 

 Each contractor
employee shall complete the NIH Computer Security Awareness Training (http://irtsectraining.nih.gov/) prior to performing any contract work, and on an annual basis thereafter, during the period of performance of this contract. 
 The contractor shall maintain a listing by name and title of each individual working under this contract that has completed the NIH required training. Any
additional security training completed by contractor staff shall be included on this listing. 
 Contractor staff shall complete the following
additional training prior to performing any work under this contract: 
  

	g.	Personnel Security Responsibilities 

 The contractor
shall perform and document the actions identified in the AEmployee Separation Checklist@, attached and made a part of this contract, when a contractor employee terminates work under this contract. All documentation shall be made
available to the Project Officer and/or Contracting Officer upon request 
  

	h.	Commitment to Protect Departmental Information Systems and Data 

  

	 	(1)	Contractor Agreement 

 The Contractor shall not release,
publish, or disclose sensitive Department information to unauthorized personnel, and shall protect such information in accordance with provisions of the following laws and any other pertinent laws and regulations governing the confidentiality of
sensitive information: 
 - 18 U.S.C. 641 (Criminal Code: Public Money, Property or Records) 
 - 18 U.S.C. 1905 (Criminal Code: Disclosure of Confidential Information) 
 - Public Law 96-511 (Paperwork Reduction Act) 
  

	 	(2)	Contractor-Employee Non-Disclosure Agreements 

 Each
contractor employee who may have access to sensitive Department information under this contract shall complete Commitment To Protect Non-Public Information - Contractor Agreement. A copy of each signed and witnessed Non-Disclosure agreement shall be
submitted to the Project Officer prior to performing any work under the contract. 
  

	i.	References 

  

	 	1.	DHHS Information Security Program Policy: http://www.hhs.gov/ohr/manual/pssh.pdf 

  

	 	2.	DHHS Personnel Security/Suitability Handbook: http://www.hhs.gov/ohr/manual/pssh.pdf 

  

	 	3.	NIST Special Publication 800-16, Information Technology Security Training Requirements: http://csrc.nist.gov/publications/nistpubs/800-16/800-16.pdf 

Appendix A-D: http://csrc.nist.gov/publications/nistpubs/800-16/AppendixA-D.pdf 
  

	 	4.	NIST SP 800-18, Guide for Developing Security Plans for Information Technology Systems: http://csrc.nist.gov/publications/nistpubs/index.html 

  

	 	5.	NIST SP 800-60, Guide for Mapping Types of Information and Information Systems to Security Categories, 

  

 19 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 Volume I:
http://csrc.nist.gov/publications/nistpubs/800-60/SP800-60V1-final.pdf 
  

	 	6.	NIST SP 800-60, Guide for Mapping Types of Information and Information Systems to Security Categories, Volume II:
http://csrc.nist.gov/publications/nistpubs/800-60/SP800-60V2-final.pdf 

  

	 	7.	NIST SP 800-64, Security Considerations in the Information System Development Life Cycle:  

 http://csrc.nist.gov/publications/nistpubs/800-64/NIST-SP800-64.pdf 
  

	 	8.	NIH Computer Security Awareness Training Course: http://irtsectraining.nih.gov/ 

  

	 	9.	Roster of Employees Requiring Suitability Investigations: http://ais.nci.nih.gov/forms/Suitability-roster.xls 

  

	 	10.	NIAID Information Technology Security Policies, Background Investigation Process: http://ais.nci.nih.gov/ 

  

	 	11.	NIH Systems Security Plan Template (detailed): http://irm.cit.nih.gov/security/secplantemp.doc 

  

	 	12.	NIH Systems Security Plan Outline (outline only): http://irm.cit.nih.gov/nihsecurity/Security_Plan_Outline.doc 

  

	 	13.	NIH Information Technology General Rules of Behavior: http://irm.cit.nih.gov/security/nihitrob.html 

  

	 	14.	Commitment To Protect Non-Public Information - Contractor Agreement:  

 http://irm.cit.nih.gov/security/Nondisclosure.pdf 
 ARTICLE H.8. SALARY RATE LIMITATION LEGISLATION PROVISIONS

  

	a.	Pursuant to the P.L.(s) cited in paragraph b., below, no NIH Fiscal Year funds may be used to pay the direct salary of an individual through this contract at a rate in excess of the
applicable amount shown or the applicable Executive Level for the fiscal year covered. Direct salary is exclusive of fringe benefits, overhead and general and administrative expenses (also referred to as “indirect costs” or
“facilities and administrative (F&A) costs”). Direct salary has the same meaning as the term “institutional base salary.” An individual’s direct salary (or institutional base salary) is the annual compensation that the
contractor pays for an individual’s appointment whether that individual’s time is spent on research, teaching, patient care or other activities. Direct salary (or institutional base salary) excludes any income that an individual may be
permitted to earn outside of duties to the contractor. The per year salary rate limitation also applies to individuals proposed under subcontracts. It does not apply to fees paid to consultants. If this is a multiple year contract, it may be subject
to unilateral modifications by the Government if an individual’s salary rate used to establish contract funding exceeds any salary rate limitation subsequently established in future HHS appropriation acts. 

  

							
	b.	  	Public Law No.	  	Fiscal Year	  	Dollar Amount of Salary Limitation
				
		  	P.L. 109-149, Public Health &	  	FY 06	  	Executive Level I
		  	Social Services Emergency Fund	  		  	

  

	c.	Payment of direct salaries is limited to the Executive Level I* rate which was in effect on the date(s) the expense was incurred. 

 For the period 10/1/05 - 12/31/05, the Executive Level I rate is $180,100. Effective January 1, 2006, the Executive Level I rate increased
to $183,500 and will remain at that rate until it is revised. See the web site listed below for the Executive Schedule rates of pay: 
 FOR FY-06 EXECUTIVE LEVEL SALARIES EFFECTIVE JANUARY 1, 2006:  
 http://www.opm.gov/oca/06tables/html/ex.asp 
 (Note: This site shows the FY-06 rates. For previous years, click on
“salaries and wages” and then scroll down to the bottom of the page and click on the year to locate the desired Executive Level salary rates.) 
 ARTICLE H.9. PUBLICATION AND PUBLICITY 
 The contractor shall acknowledge the support of the National Institutes of Health whenever
publicizing the work under this contract in any media by including an acknowledgment substantially as follows: 
 “This project has been
funded in whole or in part with Federal funds from the National Institute of Allergy and Infectious Diseases, National Institutes of Health, Department of Health and Human Services, under Contract No. HHSN266200600008C/N01-AI-60008.”

  

 20 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 ARTICLE H.10. PRESS RELEASES 
  

	a.	Pursuant to Public Law(s) cited in paragraph b., below, the contractor shall clearly state, when issuing statements, press releases, requests for proposals, bid solicitations and
other documents describing projects or programs funded in whole or in part with Federal money: (1) the percentage of the total costs of the program or project which will be financed with Federal money; (2) the dollar amount of Federal
funds for the project or program; and (3) the percentage and dollar amount of the total costs of the project or program that will be financed by nongovernmental sources. 

  

					
	Public Law and Section No.	  	Fiscal Year	  	Period Covered
			
	P.L. 109-149, Title V-General Provisions	  	2006	  	10/1/2005-9/30/2006
	Section 506	  		  	

 ARTICLE H.11. REPORTING MATTERS INVOLVING FRAUD, WASTE AND ABUSE 
 Anyone who becomes aware of the existence or apparent existence of fraud, waste and abuse in NIH funded programs is encouraged to report such matters to the HHS Inspector
General’s Office in writing or on the Inspector General’s Hotline. The toll free number is 1-800-HHS-TIPS (1-800-447-8477). All telephone calls will be handled confidentially. The e-mail address is
Htips@os.dhhs.gov and the mailing address is: 
 Office of Inspector General 
 Department of Health and Human Services 
 TIPS
HOTLINE 
 P.O. Box 23489 
 Washington, D.C. 20026 
 ARTICLE H.12. ANTI -LOBBYING 
  

	a.	Pursuant to Public Law(s) cited in paragraph c., below, contract funds shall only be used for normal and recognized executive-legislative relationships. Contract funds shall not be
used, for publicity or propaganda purposes; or for the preparation, distribution, or use of any kit, pamphlet, booklet, publication, radio, television, or video presentation designed to support or defeat legislation pending before the Congress or
any State legislature, except in presentation to the Congress or any State legislature itself. 

  

	b.	Contract funds shall not be used to pay salary or expenses of the contractor or any agent acting for the contractor, related to any activity designed to influence legislation or
appropriations pending before the Congress or any State legislature. 

  

									
	 c.
	  	Public Law and Section No.	  	Fiscal Year	  	Period Covered
					
		  	for a., above:	  	 P.L. 109-149, Title V-General Provisions
	  	FY-06	  	10/1/2005-9/30/2006
		  		  	 Section 503a.
	  		  	
					
		  	for b., above:	  	 P.L. 109-149, Title V-General Provisions
	  	FY-06	  	10/1/2005-9/30/2006
		  		  	 Section 503b.
	  		  	

 ARTICLE H.13. INTELLECTUAL PROPERTY OPTION TO COLLABORATOR 
 NIAID may collaborate with an outside investigator who has proprietary rights to compounds which may be assigned under this contract. This collaborator will be identified
by the Project Officer (PO) at the time of assignment and in this case, the following option regarding Intellectual Property Rights will be applicable. 
 Contractor agrees to promptly notify the NIAID and “Collaborator” in writing of any inventions, discoveries or innovations 
  

 21 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 made by the contractor’s principal investigator or any other employees or agents of the
contractor, whether patentable or not, which are conceived and/or first actually reduced to practice in the performance of this study using Collaborator’s Study Agent (hereinafter “Contractor Inventions”). 
 Contractor agrees to grant to Collaborator: (1) a paid-up nonexclusive, nontransferable, royalty-free, world-wide license to all Contractor Inventions for research
purposes only; and (2) a time-limited first option to negotiate an exclusive world-wide royalty-bearing license for all commercial purposes, including the right to grant sub-licenses, to all Contractor Inventions on terms to be negotiated in
good faith by Collaborator and Contractor. Collaborator shall notify Contractor, in writing, of its interest in obtaining an exclusive license to any Contractor Invention within six (6) months of Collaborator’s receipt of notice of such
Contractor Invention(s). In the event that Collaborator fails to so notify Contractor or elects not to obtain an exclusive license, then Collaborator’s option shall expire with respect to that Contractor Invention, and Contractor will be free
to dispose of its interests in such Contractor Invention in accordance with its own policies. If Contractor and Collaborator fail to reach agreement within ninety (90) days, (or such additional period as Collaborator and Contractor may agree)
on the terms for an exclusive license for a particular Contractor Invention, then for a period of six (6) months thereafter, Contractor shall not offer to license the Contractor Invention to any third party on materially better terms than those
last offered to Collaborator without first offering such terms to Collaborator, in which case Collaborator shall have a period of thirty (30) days in which to accept or reject the offer. 
 Contractor agrees that notwithstanding anything herein to the contrary, any inventions, discoveries or innovations, whether patentable or not, which are not Subject
Inventions as defined in 35 U.S.C. 201(e),* arising out of any unauthorized use of the Collaborator’s Study Agent shall be the property of the Collaborator (hereinafter “Collaborator Inventions”). Contractor will promptly notify the
Collaborator in writing of any such Collaborator Inventions and, at Collaborator’s request and expense, Contractor will cause to be assigned to Collaborator all right, title and interest in an to any such Collaborator Inventions and provide
Collaborator with reasonable assistance to obtain patents (including causing the execution of any invention assignment or other documents). Contractor may also be conducting other more basic research using Study Agent under the authority of a
separate Material Transfer Agreement (MTA), or other such agreement with the Collaborator. Inventions arising thereunder shall be subject to the terms of the MTA, and not to this clause. 
 *35 U.S.C. (e): The term “subject invention” means any invention of the contractor conceived or first actually reduced to practice in the performance of work under a funding agreement: Provided, that in the
case of a variety of plant, the date of determination (as defined in section 41(d)(FOOTNOTE 1) of the Plant Variety Protection Act (7 U.S.C. 2401(d))) must also occur during the period of contract performance. 
 Protection of Proprietary Data 
 Data generated using
an investigational agent proprietary to a Collaborator will be kept confidential and shared only with the and the Collaborator. The Contractor retains the right to publish research results subject to the terms of this contract. 
 ARTICLE H.14. OBTAINING AND DISSEMINATING BIOMEDICAL RESEARCH RESOURCES 
 Unique research resources arising from NIH-funded research are to be shared with the scientific research community. NIH provides guidance, entitled, “Sharing Biomedical Research Resources: Principles and Guidelines for
Recipients of NIH Research Grants and Contracts,” (Federal Register Notice, December 23, 1999 [64 FR 72090]), concerning the appropriate terms for disseminating and acquiring these research resources. This guidance, found at:
http://ott.od.nih.gov/NewPages/64FR72090.pdf. is intended to help contractors ensure that the conditions they impose and accept on the transfer of research tools will facilitate further biomedical research, consistent with the requirements of
the Bayh-Dole Act and NIH funding policy. 
 Note: For the purposes of this Article, the terms, “research tools,” “research
materials,” and “research resources” are used interchangeably and have the same meaning. 
  

	a.	Sharing of Model Organisms for Biomedical Research 

 The plan for sharing model organisms submitted by the contractor is acceptable. The contractor agrees to adhere to its plan and shall request prior approval of the Contracting Officer for any changes in its plan. 
  

 22 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 ARTICLE H.15. SHARING RESEARCH DATA 
 The data sharing plan submitted by the contractor is acceptable. The contractor agrees to adhere to its plan and shall request prior approval of the Contracting Officer
for any changes in its plan. 
 The NIH endorses the sharing of final research data to expedite the translation of research results into knowledge, products,
and procedures to improve human health. this contract is expected to generate research data that must be shared with the public and other researchers. NIH’s data sharing policy may be found at the following Web site: 
 http://grants.nih.gov/grants/guide/notice-files/NOT-OD-03-032.html 
 NIH recognizes that data sharing may be complicated or limited, in some cases, by institutional policies, local IRB rules, as well as local, state and Federal laws and regulations, including the Privacy Rule (see
HHS-published documentation on the Privacy Rule at http://www.hhs.gov/ocr/). The rights and privacy of people who participate in NIH-funded research must be protected at all times; thus, data intended for broader use should be free of identifiers
that would permit linkages to individual research participants and variables that could lead to deductive disclosure of the identity of individual subjects. 
 ARTICLE H.16. POSSESSION USE AND TRANSFER OF SELECT BIOLOGICAL AGENTS OR TOXINS 
 The contractor shall not conduct work involving select
agents or toxins under this contract until it and any associated subcontractor(s) comply with the following: 
 For prime or subcontract
awards to domestic institutions that possess, use, and/or transfer Select Agents under this contract, the institution must comply with the provisions of 42 CFR part 73, 7 CFR part 331, and/or 9 CFR part 121
(http://www.aphis.usda.gov/programs/ag_selectagent/FinalRule3-18-05.pdf), as required, before using NIH funds for research involving Select Agents. No NIH funds can be used for research involving Select Agents if the final registration
certificate is denied. 
 For prime or subcontract awards to foreign institutions that possess, use, and/or transfer Select
Agents under this contract, before using NIH funds for any work directly involving the Select Agents, the foreign institution must provide information satisfactory to the NIAID, NIH that safety, security, and training standards equivalent to those
described in 42 CFR part 73, 7 CFR part 331, and/or 9 CFR part 121 at: 
 (http://www.aphis.usda.gov/programs/ag_selectagent/FinalRule3-18-05.pdf) 
 are in place and will be administered on behalf of
all Select Agent work sponsored by these funds. The process for making this determination includes inspection of the foreign laboratory facility by an NIAID representative. During this inspection, the foreign institution must provide the following
information: concise summaries of safety, security, and training plans; names of individuals at the foreign institution who will have access to the Select Agents and procedures for ensuring that only approved and appropriate individuals, in
accordance with institution procedures, will have access to the Select Agents under the contract; and copies of or links to any applicable laws, regulations, policies, and procedures applicable to that institution for the safe and secure possession,
use, and/or transfer of select agents. An NIAID-chaired committee of U.S. federal employees (including representatives of NIH grants/contracts and scientific program management, CDC, Department of Justice and other federal intelligence agencies, and
Department of State) will ultimately assess the results of the laboratory facility inspection, and the regulations, policies, and procedures of the foreign institution for equivalence to the U.S. requirements described in 42 CFR part 73, 7 CFR part
331, and/or 9 CFR part 121 (http://www.aphis.usda.gov/programs/ag_selectagent/FinalRule3-18-05.pdf). The committee will provide recommendations to the DEA Director, NIAID. The DEA Director will make the approval decision and notify the
Contracting Officer. The Contracting Officer will inform the prime contractor of the approval status of the foreign institution. No NIH funds can be used for research involving Select Agents at a foreign institution until NIAID grants this approval.

 Listings of HHS select agents and toxins, and overlap select agents or toxins as well as information about the registration process for domestic
institutions, are available on the Select Agent Program Web site at http://www.cdc.gov/od/sap/ and http://www.cdc.gov/od/sap/docs/salist.pdf. Listings of USDA select agents and toxins as well as information about the registration process for
domestic institutions are available on the APHIS/USDA website at: 
 http://www.aphis.usda.gov/programs/ag_selectagent/index.html; and
http://www.aphis.usda.gov/programs/ag_selectagent/ag_bioterr_forms.html. 
  

 23 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 For foreign institutions, see the NIAID Select Agent Award information: 
 http://www.niaid.nih.gov/ncn/clinical/default_biodefense.htm 
 ARTICLE H.17. HOTEL AND MOTEL FIRE SAFETY ACT OF 1990 (P.L. 101-391) 
 Pursuant to Public Law 101-391, no Federal funds may be used to
sponsor or fund in whole or in part a meeting, convention, conference or training seminar that is conducted in, or that otherwise uses the rooms, facilities, or services of a place of public accommodation that do not meet the requirements of the
fire prevention and control guidelines as described in the Public Law. This restriction applies to public accommodations both foreign and domestic. 
 Public accommodations that meet the requirements can be accessed at: http://www.usfa.fema.gov/hotel/index.htm 
 ARTICLE H.18. PROHIBITION ON CONTRACTOR INVOLVEMENT WITH TERRORIST ACTIVITIES 
 The contractor acknowledges that U.S. Executive Orders and
Laws, including but not limited to E.O. 13224 and P.L. 107-56, prohibit transactions with, and the provision of resources and support to, individuals and organizations associated with terrorism. It is the legal responsibility of the contractor to
ensure compliance with these Executive Orders and Laws. This clause must be included in all subcontracts issued under this contract. 
 ARTICLE H.19. NIH
POLICY ON ENHANCING PUBLIC ACCESS TO ARCHIVED PUBLICATIONS RESULTING FROM NIH-FUNDED RESEARCH 
 The Policy requests that beginning May 2, 2005,
NIH-funded investigators submit to the NIH National Library of Medicine’s (NLM) PubMed Central (PMC) an electronic version of the author’s final manuscript, upon acceptance for publication, resulting from research supported
in whole or in part with direct costs from NIH. NIH defines the author’s final manuscript as the final version accepted for journal publication, and includes all modifications from the publishing peer review process. The PMC archive will
preserve permanently these manuscripts for use by the public, health care providers, educators, scientists, and NIH. The Policy directs electronic submissions to the NIH/NLM/PMC: http://www.pubmedcentral.nih.gov. 
 Additional information is available at http://grants.nih.gov/grants/guide/notice-files/NOT-OD-05-022.html. 
  

 24 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 PART II - CONTRACT CLAUSES 
 SECTION I - CONTRACT CLAUSES 
 ARTICLE I.1. GENERAL CLAUSES FOR A
COST-REIMBURSEMENT RESEARCH AND DEVELOPMENT CONTRACT - FAR 52.252-2, CLAUSES INCORPORATED BY REFERENCE (FEBRUARY 1998) 
 This contract
incorporates the following clauses by reference, with the same force and effect as if they were given in full text. Upon request, the Contracting Officer will make their full text available. Also, the full text of a clause may be accessed
electronically at this address: http://www.arnet.gov/far/. 
  

	a.	FEDERAL ACQUISITION REGULATION (FAR) (48 CFR CHAPTER 1) CLAUSES: 

  

					
	 FAR
 CLAUSE NO.
	  	 DATE
	  	 TITLE

	 52.202-1
	  	 Jul 2004
	  	 Definitions

			
	 52.203-3
	  	 Apr 1984
	  	 Gratuities (Over $100,000)

			
	 52.203-5
	  	 Apr 1984
	  	 Covenant Against Contingent Fees (Over $100,000)

			
	 52.203-6
	  	 Jul 1995
	  	 Restrictions on Subcontractor Sales to the Government (Over $100,000)

			
	 52.203-7
	  	 Jul 1995
	  	 Anti-Kickback Procedures (Over $100,000)

			
	 52.203-8
	  	 Jan 1997
	  	 Cancellation, Rescission, and Recovery of Funds for Illegal or Improper Activity (Over $100,000)

			
	 52.203-10
	  	 Jan 1997
	  	 Price or Fee Adjustment for Illegal or Improper Activity (Over $100,000)

			
	 52.203-12
	  	 Jun 2003
	  	 Limitation on Payments to Influence Certain Federal Transactions (Over $100,000)

			
	 52.204-4
	  	 Aug 2000
	  	 Printed or Copied Double-Sided on Recycled Paper (Over $100,000)

			
	 52.204-7
	  	 Oct 2003
	  	 Central Contractor Registration

			
	 52.209-6
	  	 Jul 1995
	  	Protecting the Government’s Interests When Subcontracting With Contractors Debarred, Suspended, or Proposed for Debarment (Over $25,000)
			
	 52.215-2
	  	 Jun 1999
	  	 Audit and Records - Negotiation (Over $100,000)

			
	 52.215-8
	  	 Oct 1997
	  	 Order of Precedence - Uniform Contract Format

			
	 52.215-10
	  	 Oct 1997
	  	 Price Reduction for Defective Cost or Pricing Data

			
	 52.215-12
	  	 Oct 1997
	  	 Subcontractor Cost or Pricing Data (Over $500,000)

			
	 52.215-14
	  	 Oct 1997
	  	 Integrity of Unit Prices (Over $100,000)

			
	 52.215-15
	  	 Oct 2004
	  	 Pension Adjustments and Asset Reversions

  

 25 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
  

					
	52.215-18	  	Oct 1997	  	Reversion or Adjustment of Plans for Post-Retirement Benefits (PRB) other than Pensions
			
	52.215-19	  	Oct 1997	  	Notification of Ownership Changes
			
	52.215-21	  	Oct 1997	  	Requirements for Cost or Pricing Data or Information Other Than Cost or Pricing Data - Modifications
			
	52.216-7	  	Dec 2002	  	Allowable Cost and Payment
			
	52.216-8	  	Mar 1997	  	Fixed Fee
			
	52.219-8	  	May 2004	  	Utilization of Small Business Concerns (Over $100,000)
			
	52.219-9	  	Jan 2002	  	Small Business Subcontracting Plan (Over $500,000)
			
	52.219-16	  	Jan 1999	  	Liquidated Damages - Subcontracting Plan (Over $500,000)
			
	52.222-2	  	Jul 1990	  	Payment for Overtime Premium (Over $100,000) (Note: The dollar amount in paragraph (a) of this clause is $0 unless otherwise specified in the contract.)
			
	52.222-3	  	Jun 2003	  	Convict Labor
			
	52.222-26	  	Apr 2002	  	Equal Opportunity
			
	52.222-35	  	Dec 2001	  	Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans
			
	52.222-36	  	Jun 1998	  	Affirmative Action for Workers with Disabilities
			
	52.222-37	  	Dec 2001	  	Employment Reports on Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans
			
	52.223-6	  	May 2001	  	Drug-Free Workplace
			
	52.223-14	  	Aug 2003	  	Toxic Chemical Release Reporting (Over $100,000)
			
	52.225-1	  	Jun 2003	  	Buy American Act - Supplies
			
	52.225-13	  	Dec 2003	  	Restrictions on Certain Foreign Purchases
			
	52.227-1	  	Jul 1995	  	Authorization and Consent, Alternate I (Apr 1984)
			
	52.227-2	  	Aug 1996	  	Notice and Assistance Regarding Patent and Copyright Infringement (Over $100,000)
			
	52.227-11	  	Jun 1997	  	Patent Rights - Retention by the Contractor (Short Form) (Note: In accordance with FAR 27.303(a)(2), paragraph (f) is modified to include the requirements in FAR 27.303(a)(2)(i) through (iv).
The frequency of reporting in (i) is annual.
			
	52.227-14	  	Jun 1987	  	Rights in Data - General
			
	52.232-9	  	Apr 1984	  	Limitation on Withholding of Payments
			
	52.232-17	  	Jun 1996	  	Interest (Over $100,000)
			
	52.232-20	  	Apr 1984	  	Limitation of Cost

  

 26 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
  

					
	52.232-23	  	Jan 1986	  	Assignment of Claims
			
	52.232-25	  	Oct 2003	  	Prompt Payment, Alternate I (Feb 2002)
			
	52.232-33	  	Oct 2003	  	Payment by Electronic Funds Transfer—Central Contractor Registration
			
	52.233-1	  	Jul 2002	  	Disputes
			
	52.233-3	  	Aug 1996	  	Protest After Award, Alternate I (Jun 1985)
			
	52.233-4	  	Oct 2004	  	Applicable Law for Breach of Contract Claim
			
	52.242-1	  	Apr 1984	  	Notice of Intent to Disallow Costs
			
	52.242-3	  	May 2001	  	Penalties for Unallowable Costs (Over $500,000)
			
	52.242-4	  	Jan 1997	  	Certification of Final Indirect Costs
			
	52.242-13	  	Jul 1995	  	Bankruptcy (Over $100,000)
			
	52.243-2	  	Aug 1987	  	Changes - Cost Reimbursement, Alternate V (Apr 1984)
			
	52.244-2	  	Aug 1998	  	Subcontracts, Alternate II (Aug 1998) *If written consent to subcontract is required, the identified subcontracts are listed in ARTICLE B, Advance Understandings.
			
	52.244-5	  	Dec 1996	  	Competition in Subcontracting (Over $100,000)
			
	52.245-5	  	May 2004	  	Government Property (Cost-Reimbursement, Time and Material, or Labor- Hour Contract)
			
	52.246-23	  	Feb 1997	  	Limitation of Liability (Over $100,000)
			
	52.249-6	  	Sep 1996	  	Termination (Cost-Reimbursement)
			
	52.249-14	  	Apr 1984	  	Excusable Delays
			
	52.253-1	  	Jan 1991	  	Computer Generated Forms

  

	b.	DEPARTMENT OF HEALTH AND HUMAN SERVICES ACQUISITION REGULATION (HHSAR) (48 CFR CHAPTER 3) CLAUSES: 

  

					
	 HHSAR
CLAUSE NO.
	  	DATE	  	 TITLE

	 352.202-1
	  	Jan 2001	  	 Definitions - with Alternate paragraph (h) (Jan 2001)

			
	 352.216-72
	  	Oct 1990	  	 Additional Cost Principles

			
	 352.228-7
	  	Dec 1991	  	 Insurance - Liability to Third Persons

			
	 352.232-9
	  	Apr 1984	  	 Withholding of Contract Payments

			
	 352.233-70
	  	Apr 1984	  	 Litigation and Claims

			
	 352.242-71
	  	Apr 1984	  	 Final Decisions on Audit Findings

			
	 352.270-5
	  	Apr 1984	  	 Key Personnel

			
	 352.270-6
	  	Jul 1991	  	 Publications and Publicity

			
	 352.270-7
	  	Jan 2001	  	 Paperwork Reduction Act

 [ End of GENERAL CLAUSES FOR A COST-REIMBURSEMENT RESEARCH AND DEVELOPMENT CONTRACT - Rev. 10/2004]. 

 

 27 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 ARTICLE I.2. AUTHORIZED SUBSTITUTIONS OF CLAUSES 
 ARTICLE I.1. of this SECTION is hereby modified as follows: 
 Alternate I (October 1997) of FAR Clause 52.215-14, Integrity of Unit Prices (October 1997) is added. 
 ARTICLE I.3. ADDITIONAL CONTRACT CLAUSES 
 This contract incorporates the following clauses by reference, with the same force and effect, as
if they were given in full text. Upon request, the contracting officer will make their full text available. 
  

	a.	FEDERAL ACQUISITION REGULATION (FAR) (48 CFR CHAPTER 1) CLAUSES 

  

	 	(1)	FAR Clause 52.219-25, Small Disadvantage Business Participation Program – Disadvantaged Status and Reporting (October 1999). 

  

	 	(2)	FAR Clause 52.223-3, Hazardous Material Identification and Material Safety Data (January 1997), with Alternate I (July 1995). 

  

	 	(3)	FAR Clause 52.227-14, Rights in Data - General (June 1987). 

  

	 	(4)	Alternate II (June 1987), FAR Clause 52.227-14, Rights in Data—General (June 1987). Additional purposes for which the limited rights data may be used are:

  

	 	(5)	Alternate III (June 1987), FAR Clause 52.227-14, Rights in Data—General (June 1987). 

 Additions to, or limitations on, the restricted rights set forth in the Restricted Rights Notice of subparagraph (g)(3) of the clause are expressly stated
as follows: 
  

	 	(6)	FAR Clause 52.227-16, Additional Data Requirements (June 1987). 

  

	 	(7)	FAR Clause 52.242-3, Penalties for Unallowable Costs (May 2001). 

  

	 	(8)	FAR Clause 52.242-4, Certification of Final Indirect Cost (January 1997). 

  

	 	(9)	FAR Clause 52.246-23, Limitation of Liability (February 1997). AND/OR 

  

	 	(10)	FAR Clause 52.246-24, Limitation of Liability - High-Value Items (February 1997). 

  

	 	(11)	FAR Clause 52.247-63, Preference for U.S. Flag Air Carriers (June2003). 

  

	 	(12)	FAR Clause 52.247-64, Preference for Privately Owned U.S. Flag Commercial Vessels (April 2003). 

  

 28 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
  

	b.	DEPARTMENT OF HEALTH AND HUMAN SERVICES ACQUISITION REGULATION (HHSAR) (48 CHAPTER 3) CLAUSES: 

  

	 	(1)	HHSAR Clause 352.223-70, Safety and Health (January 2001). [This clause is provided in full text in Section J - Attachments.] 

  

	 	(2)	HHSAR Clause 352.224-70, Confidentiality of Information (April 1984 - including revisions mandated by the 1/3/2005 Federal Register notice which was effective March 2005).

  

	 	(3)	HHSAR Clause 352.270-1, Accessibility of Meetings, Conferences and Seminars to Persons with Disabilities (January 2001). 

  

	 	(4)	HHSAR Clause 352.270-9, Care of Live Vertebrate Animals (March 2005). 

  

	c.	NATIONAL INSTITUTES OF HEALTH (NIH) RESEARCH CONTRACTING (RC) CLAUSES: 

 The following clauses are attached and made a part of this contract: 
  

	 	(1)	NIH (RC)-7, Procurement of Certain Equipment (April 1984) (OMB Bulletin 81-16). 

 ARTICLE I.4. ADDITIONAL FAR CONTRACT CLAUSES INCLUDED IN FULL TEXT 
 Additional clauses other than those listed below
which are based on the type of contract/Contractor shall be determined during negotiations. Any contract awarded from this solicitation will contain the following: 
 This contract incorporates the following clauses in full text. 
 FEDERAL ACQUISITION REGULATION (FAR)(48 CFR CHAPTER 1) CLAUSES: 
  

	a.	FAR Clause 52.222-39, Notification Of Employee Rights Concerning Payment Of Union Dues Or Fees (December 2004) 

  

	 	(a)	Definition. As used in this clause— 

 United
States means the 50 States, the District of Columbia, Puerto Rico, the Northern Mariana Islands, American Samoa, Guam, the U.S. Virgin Islands, and Wake Island. 
  

	 	(b)	Except as provided in paragraph (e) of this clause, during the term of this contract, the Contractor shall post a notice, in the form of a poster, informing employees of their
rights concerning union membership and payment of union dues and fees, in conspicuous places in and about all its plants and offices, including all places where notices to employees are customarily posted. The notice shall include the following
information (except that the information pertaining to National Labor Relations Board shall not be included in notices posted in the plants or offices of carriers subject to the Railway Labor Act, as amended (45 U.S.C. 151-188)).

 Notice to Employees 
 Under Federal law, employees cannot be required to join a union or maintain membership in a union in order to retain their jobs. Under certain conditions, the law permits a union and an employer to enter into a
union_security agreement requiring employees to pay uniform periodic dues and initiation fees. However, employees who are not union members can object to the use of their payments for certain purposes and can only be required to pay their share of
union costs relating to collective bargaining, contract administration, and grievance adjustment. 
 If you do not want to pay that portion of
dues or fees used to support activities not related 
  

 29 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 to collective bargaining, contract administration, or grievance adjustment, you are
entitled to an appropriate reduction in your payment. If you believe that you have been required to pay dues or fees used in part to support activities not related to collective bargaining, contract administration, or grievance adjustment, you may
be entitled to a refund and to an appropriate reduction in future payments. 
 For further information concerning your rights, you may wish to
contact the National Labor Relations Board (NLRB) either at one of its Regional offices or at the following address or toll free number: 
 National Labor Relations Board 
 Division of Information 
 1099 14th Street, N.W. 
 Washington, DC
20570 
 1-866-667-6572 
 1-866-316-6572 (TTY) 
 To locate the nearest NLRB office, see NLRB’s website at http://www.nlrb.gov. 
  

	(c)	The Contractor shall comply with all provisions of Executive Order 13201 of February 17, 2001, and related implementing regulations at 29 CFR part 470, and orders of the
Secretary of Labor. 

  

	(d)	In the event that the Contractor does not comply with any of the requirements set forth in paragraphs (b), (c), or (g), the Secretary may direct that this contract be cancelled,
terminated, or suspended in whole or in part, and declare the Contractor ineligible for further Government contracts in accordance with procedures at 29 CFR part 470, Subpart B__Compliance Evaluations, Complaint Investigations and Enforcement
Procedures. Such other sanctions or remedies may be imposed as are provided by 29 CFR part 470, which implements Executive Order 13201, or as are otherwise provided by law. 

  

	(e)	The requirement to post the employee notice in paragraph (b) does not apply to— 

  

	 	(1)	Contractors and subcontractors that employ fewer than 15 persons; 

  

	 	(2)	Contractor establishments or construction work sites where no union has been formally recognized by the Contractor or certified as the exclusive bargaining representative of the
Contractor’s employees; 

  

	 	(3)	Contractor establishments or construction work sites located in a jurisdiction named in the definition of the United States in which the law of that jurisdiction forbids enforcement
of union-security agreements; 

  

	 	(4)	Contractor facilities where upon the written request of the Contractor, the Department of Labor Deputy Assistant Secretary for Labor-Management Programs has waived the posting
requirements with respect to any of the Contractor’s facilities if the Deputy Assistant Secretary finds that the Contractor has demonstrated that— 

  

	 	(i)	The facility is in all respects separate and distinct from activities of the Contractor related to the performance of a contract; and 

  

	 	(ii)	Such a waiver will not interfere with or impede the effectuation of the Executive order; or 

  

	 	(5)	Work outside the United States that does not involve the recruitment or employment of workers within the United States. 

  

 30 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
  

	(f)	The Department of Labor publishes the official employee notice in two variations; one for contractors covered by the Railway Labor Act and a second for all other contractors. The
Contractor shall— 

  

	 	(1)	Obtain the required employee notice poster from the Division of Interpretations and Standards, Office of Labor-Management Standards, U.S. Department of Labor, 200 Constitution
Avenue, NW, Room N-5605, Washington, DC 20210, or from any field office of the Department’s Office of Labor-Management Standards or Office of Federal Contract Compliance Programs; 

  

	 	(2)	Download a copy of the poster from the Office of Labor-Management Standards website at http://www.olms.dol.gov; or 

  

	 	(3)	Reproduce and use exact duplicate copies of the Department of Labor’s official poster. 

  

	(g)	The Contractor shall include the substance of this clause in every subcontract or purchase order that exceeds the simplified acquisition threshold, entered into in connection with
this contract, unless exempted by the Department of Labor Deputy Assistant Secretary for Labor-Management Programs on account of special circumstances in the national interest under authority of 29 CFR 470.3(c). For indefinite quantity subcontracts,
the Contractor shall include the substance of this clause if the value of orders in any calendar year of the subcontract is expected to exceed the simplified acquisition threshold. Pursuant to 29 CFR part 470, Subpart B—Compliance Evaluations,
Complaint Investigations and Enforcement Procedures, the Secretary of Labor may direct the Contractor to take such action in the enforcement of these regulations, including the imposition of sanctions for noncompliance with respect to any such
subcontract or purchase order. If the Contractor becomes involved in litigation with a subcontractor or vendor, or is threatened with such involvement, as a result of such direction, the Contractor may request the United States, through the
Secretary of Labor, to enter into such litigation to protect the interests of the United States. 

  

 31 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 PART III 
 SECTION J - LIST OF ATTACHMENTS 
 The following documents are attached and
incorporated in this contract: 
  

	1.	Statement of Work, 7/28/2006, 4 pages. 

  

	2.	Invoice/Financing Request and Contract Financial Reporting Instructions for NIH Cost-Reimbursement Type Contracts, NIH(RC)-4, (5/97), 5 pages. 

  

	3.	Safety and Health, HHSAR Clause 352.223-70, (1/01), 1 page. 

  

	4.	Procurement of Certain Equipment, NIH(RC)-7, 4/1/84. 

  

	5.	Commitment To Protect Non-Public Information. 

 Available
on the web at the following address: http://irm.cit.nih.gov/security/Nondisclosure.pdf. 
  

	6.	XOMA Proposed Indirect Rates 

  

 32 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 PART IV 
 SECTION K - REPRESENTATIONS AND CERTIFICATIONS 
 The following documents are
incorporated by reference in this contract: 
  

	1.	Representations and Certifications, dated March 17, 2006. 

 END of the SCHEDULE 
 (CONTRACT) 
  

 33 

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 STATEMENT OF WORK 
 DEVELOPMENT OF A FINAL DRUG PRODUCT FOR A MIXTURE OF MONOCLONAL ANTIBODIES FOR 
 TYPE A BOTULINUM NEUROTOXINS 
 RFP NIH-NIAID-DMID-06-38 
 INTRODUCTION: 
 Research conducted by the National Institute of Allergy and Infectious Diseases (NIAID), National
Institute of Health (NIH), strives to understand, treat and ultimately prevent the myriad infectious, immunologic, and allergic diseases that threaten millions of human lives. The NIAID Division of Microbiology and Infectious Diseases (DMID)
supports extramural research to control and prevent diseases caused by virtually all infectious agents. This includes basic and applied research to develop and evaluate therapeutics, vaccines, and diagnostics, which are funded through a variety of
research grants and contracts. In this context, the NIAID’s mission includes the development of new medical countermeasures against the biological agents that are most likely to be used in a terror attack on civilian populations. These
biological agents have been prioritized as Category A, B, and C. Through this contract NIAID is seeking to advance the development of a mixture of three monoclonal antibodies (mAbs) as a therapeutic against botulinum neurotoxin serotype A, which is
a Category A threat agent. The three mAbs were discovered by Dr. James Marks at the University of California San Francisco (UCSF). The mixture of the three mAbs has demonstrated neutralizing activity for botulinum neurotoxin subtypes A1 and A2
in a small laboratory animal model. The NIAID is currently funding XOMA to manufacture by current Good Manufacturing Process (cGMP) bulk drug substance of the three mAbs. To this end, XOMA negotiated a non-exclusive agreement with UCSF to access the
three mAbs. XOMA recloned the three mAbs into proprietary commercial production cell lines and named the mAbs NX01, NX02 and NX11. Master Cell Banks and Master Working Cell Banks were produced by XOMA and small amounts of each mAb have been produced
for use in development of analytical assays, clone selection, and verification of neutralizing activity in a small animal model. XOMA is developing a manufacturing process for each of the mAbs and will manufacture and deliver at least 7.0 grams of
each as a cGMP bulk drug substance. 
 OVERALL PURPOSE AND SCOPE 
 Through this contract with XOMA the NIAID will support activities to complete the development of NX01, NX02 and NX11 mAbs from three separate cGMP bulk drug substances to three formulated, finished, vialed and labeled as single mAbs final
drug products, and finally to one formulated mixture of the three mAbs finished, vialed and labeled as a final drug product. The final drug product should be suitable for clinical evaluation by sterile intravenous infusion. Using the Master Working
Cell Banks that the Contractor produced under contract N01AI50004, the Contractor shall manufacture additional cGMP mAb bulk drug substance as directed by the NIAID Project Officer to complete the development of the final drug products, and to
perform IND-enabling studies and a Phase 1 clinical trial. The Contractor shall perform viral clearance validations for a minimum of three viruses for the final production process of the mAbs. The Contractor shall formulate, finish, vial, and label
the final drug product as three single mAb formulations and a mixture of the three mAbs. The optimal ratio of the three antibodies in the mixture shall be determined by the Contractor from potency, pharmacokinetic and stability studies. A single
vial of the mixture shall contain an equal or greater number of neutralizing units for botulinum serotype A1, as the licensed equine anti-toxin product, unless otherwise directed through discussions with the FDA. The neutralizing units for botulinum
serotype A2 shall be agreed upon through discussion with the FDA and NIAID Project Officer. The final drug product shall be formulated for maximum stability when stored at -20 C or 4 C, as determined in accelerated stability studies. The Contractor
shall plan and implement a long-term stability program for all of the final drug product and the remaining bulk drug product. 
 The Contractor shall develop
and either qualify or validate (depending on regulatory requirements) assays to support: a) nonclinical and clinical pharmacokinetic studies; b) nonclinical toxicity and safety studies; and c) formulation, lot release, and stability studies. In
addition, the Contractor shall perform nonclinical IND-enabling studies to assess toxicity, safety, and pharmacokinetics. The Contractor shall participate with NIAID in meetings with the FDA and preparation of the IND application. The Contractor
shall be responsible for performing studies and activities in compliance with Good Laboratory Practice (GLP: as defined in the U.S. Code of Federal Regulations – 21CFR§58) and current Good Manufacturing Practice guidelines (cGMP: as
defined in the U.S. Code of Federal Regulations – 21CFR§211), including data management and quality control systems. 
  

					
	 Statement of Work
	 		 	ATTACHMENT 1
	 (7/28/06)
	 	1	 	Page 1

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 The Contractor is expected to use knowledge, reagents, materials, and bulk drug substance produced
under contract N01-AI-50004 to most efficiently perform the activities outlined in this Statement of Work and as agreed upon with the NIAID Project Officer and Contracting Officer. The NIAID is aware that this Statement of Work requires facilities
with select agent approval and biosafety level 2 facilities, experience and trained personnel. Therefore, it may be necessary for the Contractor to subcontract a portion of the work. The Contractor shall be responsible for ALL work performed under
this contract including that performed by any subcontractor(s). 
 TECHNICAL REQUIREMENTS: 
 Independently and not as an agent of the Government, the Contractor shall furnish all the necessary services, qualified personnel, material, equipment, and facilities,
not otherwise provided by the Government as needed to perform the Statement of Work below. 
 Specifically the Contractor
shall provide the following: 
  

	 	1)	Manufacture additional cGMP mAb bulk drug substance as requested by the NIAID Project Officer as follows: 

  

	 	a)	estimate and justify the total amount of GMP bulk drug substance that will be required to complete the studies included in the Statement of Work for this contract;

  

	 	b)	manufacture cGMP bulk drug substance as requested by the NIAID Project Officer; 

  

	 	c)	Aliquot and store cGMP bulk drug substance under cGMP conditions as agreed upon with the NIAID Project Officer; 

  

	 	d)	develop and implement a stability program for the bulk drug substance; and 

  

	 	e)	ship the cGMP bulk drug substance as requested by the NIAID Project Officer. 

  

	 	2)	Perform viral clearance validations for three viral types for the final production process 

  

	 	3)	Produce fully formulated final drug products from the cGMP mAb bulk drug substances as follows: 

  

	 	a)	formulate each of the three mAbs individually for optimal potency, safety, and stability; 

  

	 	b)	finish, vial, and label the single mAbs as final drug product as requested by the NIAID Project Officer; 

  

	 	c)	formulate a mixture of the three mAbs for optimal potency, safety, and stability; 

  

	 	d)	finish, vial and label the mAb mixture bulk drug product as requested by the NIAID Project Officer; 

  

	 	e)	store the final drug products under cGMP conditions; 

  

	 	f)	develop and implement a stability program for the final drug products; 

  

	 	g)	ship the final drug product as requested by the NIAID Project Officer; 

  

	 	h)	provide a final formulation and product characterization report to the NIAID Project Officer; and 

  

	 	i)	provide all data and analysis for the CMC section of the IND application to the NIAID Project Officer. 

  

	 	4)	Develop and qualify and/or validate assays, depending on regulatory requirements, for IND-enabling studies or a Phase 1 clinical trial, to support: 

 

	 	a)	nonclinical and clinical pharmacokinetic studies: Assays shall include at least one assay capable of differentiating the three mAbs and one assay capable of assessing neutralizing
activity in the plasma of laboratory animals and humans. The assays are required to support pharmacokinetic studies in laboratory animals and humans involving doses that range from 0.02 mg antibody/kg to 2.0 mg antibody/kg; 

 

	 	b)	nonclinical toxicity and safety studies; and 

  

	 	c)	formulation, lot release, and stability studies as required for bulk drug substances and final drug products. 

  

	 	4.1.	For each assay the Contractor shall: 

 a) develop
the assay, qualify and/or validate the assay, and provide critical reagents; 
 b) submit a final assay qualification and/or validation
report; and 
 c) submit a technology transfer package at the request of the NIAID Project Officer. 
  

					
	 Statement of Work
	 		 	ATTACHMENT 1
	 (7/28/06)
	 	2	 	Page 2

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
  

	 	5)	Perform nonclinical IND-enabling studies to assess toxicology, safety and pharmacokinetics of the mAbs as follows: 

  

	 	a)	develop a plan for the performance of all IND-enabling nonclinical toxicology, safety and pharmacokinetic studies; 

  

	 	b)	perform nonclinical toxicology, safety and pharmacokinetic safety studies with formulated cGMP product according to GLP guidelines; 

  

	 	c)	provide a final report to the NIAID Project Officer; and 

  

	 	d)	provide all data and analysis as requested by the NIAID Project Officer for submission in the IND application. 

  

	 	6)	Perform regulatory compliance and data management as follows: 

  

	 	a)	provide data management and quality control systems/procedures, including data transmission, storage, and retrieval; 

  

	 	b)	provide for the statistical design and analysis of data resulting from the research undertaken; 

  

	 	c)	provide raw data or specific analyses of data generated with contract funding to the NIAID Project Officer; 

  

	 	d)	ensure strict adherence to FDA regulations and guidance, including requirements for the conduct of animal studies and assays under GLP and the production of bulk drug product and
final drug products under cGMP; 

  

	 	e)	arrange for independent audits as needed or as requested by the NIAID Project Officer. Audits may be requested to assure that Contractor and/or subcontractor facilities and all
planned procedures meet the FDA regulations and guidance required to comply with GLP and cGMP. In addition, the Contractor shall ensure that all Contractor and/or subcontractor records and staff are available for site visits or audits. The
Contractor shall provide interim and final audit reports to the NIAID Project Office and the NIAID Contracting Officer within thirty (30) calendar days of the completion of the audit. The NIAID reserves the right to conduct independent audit of
the Contractor and its subcontractors as needed to evaluate compliance with the FDA regulations and guidance required to meet GLP or cGMP standards. Such audits may also be conducted prior to contract award; and 

  

	 	f)	participate with NIAID in meetings with the FDA regarding the IND application and approval for the product. 

  

	 	7)	Technical, Management, and Administrative Team 

 The
Contractor shall provide all expertise needed for the performance of the Statement of Work, including research, manufacturing, regulatory, statistical, management and administrative activities. The team must include strong scientific leadership as
well as significant experience and expertise in the management, design and execution of a product development program focused on manufacturing, formulation and nonclinical IND-enabling studies. The Principal Investigator (PI) shall be responsible
for all aspects of project performance and communication with the NIAID Project Officer and the NIAID Contracting Officer. In addition, the Contractor shall provide Project Manager(s) who are responsible for the day-to-day monitoring and tracking of
progress and timelines, the coordination of project activities and costs incurred. The Contractor shall provide and implement a plan that addresses how the activities of the prior Fixed-Price contract shall be accounted for separately and apart from
the activities of this cost reimbursement contract. 
  

	 	8)	Project Management 

 The Contractor shall provide
for: 
  

	 	b)	the overall management, integration and coordination of all contract activities, including a technical and administrative infrastructure to ensure the efficient planning,
initiation, implementation, and direction of all contract activities; 

  

	 	c)	effective communication with the NIAID Project Officer and the NIAID Contracting Officer; 

  

	 	d)	a PI with responsibility for overall project management and communication, tracking, monitoring and reporting on project status and progress, and recommending modifications to
project requirements and timelines, including projects undertaken by subcontractors; 

  

					
	 Statement of Work
	 		 	ATTACHMENT 1
	 (7/28/06)
	 	3	 	Page 3

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
  

	 	e)	Project Manager(s) with responsibility for monitoring and tracking day-to-day progress and timelines, coordinating communication and project activities and costs incurred;

  

	 	f)	administrative staff with responsibility for financial management and reporting on all activities conducted by the Contractor and any subcontractors; and 

 

	 	g)	The organization of a bi-annual one day meeting to include the PI, key personnel, key subcontractor personnel, consultants, the NIAID Project Officer, the NIAID Contracting Officer
and up to 2 other key NIAID staff. One meeting to be held in Bethesda and one meeting to held at the Contractor’s site. 

 The Contractor shall prepare and provide all reports and other deliverables listed in the “Reporting Requirements and Other Deliverables” section of this solicitation. 
  

	 	9)	Facilities, Equipment and Other Resources 

 The
Contractor shall provide the equipment, facilities, and other resources required to perform all parts of the Statement Work in compliance with all Federal and NIH regulations, either in their own facilities or through subcontractor(s). This shall
include the performance of in vitro and in vivo IND-enabling studies under GLP, production of mAbs under cGMP, the humane care and use of vertebrate animals, and receiving, storing, and handling dangerous biological agents, including Select agents
under biosafety levels required for working with the biological agents under study. A copy of the current interim CDC/NIH DRAFT guidelines in the Biosafety in Microbiology and Biomedical Laboratories, 4th edition is available at: http://www.cdc.gov/od/ohs/biosfty/bmbl4toc.htm . 
  

					
	 Statement of Work
	 		 	ATTACHMENT 1
	 (7/28/06)
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 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 INVOICE/FINANCING REQUEST AND CONTRACT FINANCIAL REPORTING 
 INSTRUCTIONS FOR NIH COST-REIMBURSEMENT CONTRACTS, NIH(RC)-4 
 General: The contractor shall submit claims for reimbursement in the manner and format described herein and as illustrated in the sample invoice/financing request. 
 Format: Standard Form 1034, “Public Voucher for Purchases and Services Other Than Personal,” and Standard Form 1035, “Public Voucher for Purchases and Services Other Than Personal—
Continuation Sheet,” or reproduced copies of such forms marked ORIGINAL should be used to submit claims for reimbursement. In lieu of SF-1034 and SF-1035, claims may be submitted on the payee’s letter-head or self-designed form provided
that it contains the information shown on the sample invoice/financing request. 
 Number of Copies: As indicated in
the Invoice Submission Clause in the contract. 
 Frequency: Invoices/financing requests submitted in accordance with the Payment Clause shall be
submitted monthly unless otherwise authorized by the contracting officer. 
 Cost Incurrence Period: Costs incurred must be within the contract
performance period or covered by precontract cost provisions. 
 Billing of Costs Incurred: If billed costs include: (l) costs of a prior billing
period, but not previously billed; or (2) costs incurred during the contract period and claimed after the contract period has expired, the amount and month(s) in which such costs were incurred shall be cited. 
 Contractor’s Fiscal Year: Invoices/financing requests shall be prepared in such a manner that costs claimed can be identified with the contractor’s
fiscal year. 
 Currency: All NIH contracts are expressed in United States dollars. When payments are made in a currency other than United States
dollars, billings on the contract shall be expressed, and payment by the United States Government shall be made, in that other currency at amounts coincident with actual costs incurred. Currency fluctuations may not be a basis of gain or loss to the
contractor. Notwithstanding the above, the total of all invoices paid under this contract may not exceed the United States dollars authorized. 
 Costs
Requiring Prior Approval: Costs requiring the contracting officer’s approval, which are not set forth in an Advance Understanding in the contract shall be so identified and reference the Contracting Officer’s Authorization (COA)
Number. In addition, any cost set forth in an Advance Understanding shall be shown as a separate line item on the request. 
 Invoice/Financing Request Identification: Each invoice/financing request shall be identified as either: 
  

	(a)	Interim Invoice/Contract Financing Request — These are interim payment requests submitted during the contract performance period. 

  

	(b)	Completion Invoice — The completion invoice is submitted promptly upon completion of the work; but no later than one year from the contract completion date, or within
120 days after settlement of the final indirect cost rates covering the year in which this contract is physically complete (whichever date is later). The completion invoice should be submitted when all costs have been assigned to the contract and
all performance provisions have been completed. 

  

	(c)	Final Invoice — A final invoice may be required after the amounts owed have been settled between the Government and the contractor (e.g., resolution of all suspensions
and audit exceptions). 

 Preparation and Itemization of the Invoice/Financing Request: The contractor shall furnish the information set
forth in the explanatory notes below. These notes are keyed to the entries on the sample invoice/financing request. 
  

	(a)	Designated Billing Office Name and Address — Enter the designated billing office and address, identified in the Invoice Submission Clause of the contract, on all copies
of the invoice/financing request. 

  

			
	 NIH(RC)-4
	 	ATTACHMENT 2
	 Rev. 11/2003
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 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
  

	(b)	Invoice/Financing Request Number — Insert the appropriate serial number of the invoice/financing request. 

  

	(c)	Date Invoice/Financing Request Prepared — Insert the date the invoice/financing request is prepared. 

  

	(d)	Contract Number, ADB Number and Date — Insert both the contract number and the ADB number (which appears in the upper left hand corner of the face page of the contract),
and the effective date of the contract. 

  

	(e)	Payee’s Name and Address — Show the contractor’s name (as it appears in the contract), correct address, and the title and phone number of the responsible
official to whom payment is to be sent. When an approved assignment has been made by the contractor, or a different payee has been designated, then insert the name and address of the payee instead of the contractor. 

  

	(f)	Total Estimated Cost of Contract — Insert the total estimated cost of the contract, exclusive of fixed-fee. For incrementally funded contracts, enter the amount
currently obligated and available for payment. 

  

	(g)	Total Fixed-Fee — Insert the total fixed-fee (where applicable). For incrementally funded contracts, enter the amount currently obligated and available for payment.

  

	(h)	Billing Period — Insert the beginning and ending dates (month, day, and year) of the period in which costs were incurred and for which reimbursement is claimed.

  

	(i)	Incurred Cost — Current C Insert the amount billed for the major cost elements, adjustments, and adjusted amounts for the current period. 

  

	(j)	Incurred Cost — Cumulative C Insert the cumulative amounts billed for the major cost elements and adjusted amounts claimed during this contract.

  

	(k)	Direct Costs — Insert the major cost elements. For each element, consider the application of the paragraph entitled “Costs Requiring Prior Approval” on page 1
of these instructions. 

  

	 	(1)	Direct Labor — Include salaries and wages paid (or accrued) for direct performance of the contract. For Key Personnel, list each employee on a separate line. List other
employees as one amount unless otherwise required by the contract. 

  

	 	(2)	Fringe Benefits — List any fringe benefits applicable to direct labor and billed as a direct cost. Fringe benefits included in indirect costs should not be identified
here. 

  

	 	(3)	Accountable Personal Property — Include permanent research equipment and general purpose equipment having a unit acquisition cost of $1,000 or more and having an
expected service life of more than two years, and sensitive property regardless of cost (see the DHHS Contractor’s Guide for Control of Government Property). Show permanent research equipment separate from general purpose equipment.
Prepare and attach the NIH Form entitled, “Report of Government Owned, Contractor Held Property,” in accordance with the following instructions: 

 List each item for which reimbursement is requested. A reference shall be made to the following (as applicable): 
  

	 	•	 	The item number for the specific piece of equipment listed in the Property Schedule. 

  

	 	•	 	The Contracting Officer’s Authorization letter and number, if the equipment is not covered by the Property Schedule. 

  

	 	•	 	An asterisk (*) shall precede the item if the equipment is below the approval level. 

  

	 	(4)	Materials and Supplies — Include equipment with unit costs of less than $1,000 or an expected service life of two years or less, and consumable material and supplies
regardless of amount. 

  

	 	(5)	Premium Pay — List remuneration in excess of the basic hourly rate. 

  

			
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	 	ATTACHMENT 2
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 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
  

	 	(6)	Consultant Fee — List fees paid to consultants. Identify consultant by name or category as set forth in the contract’s Advance Understanding or in the COA letter,
as well as the effort (i.e., number of hours, days, etc.) and rate being billed. 

  

	 	(7)	Travel — Include domestic and foreign travel. Foreign travel is travel outside of Canada, the United States and its territories and possessions. However, for an
organization located outside Canada, the United States and its territories and possessions, foreign travel means travel outside that country. Foreign travel must be billed separately from domestic travel. 

  

	 	(8)	Subcontract Costs — List subcontractor(s) by name and amount billed. 

  

	 	(9)	Other — List all other direct costs in total unless exceeding $1,000 in amount. If over $1,000, list cost elements and dollar amounts separately. If the contract
contains restrictions on any cost element, that cost element must be listed separately. 

  

	(l)	Cost of Money (COM) — Cite the COM factor and base in effect during the time the cost was incurred and for which reimbursement is claimed. 

  

	(m)	Indirect Costs--Overhead — Identify the cost base, indirect cost rate, and amount billed for each indirect cost category. 

  

	(n)	Fixed-Fee Earned — Cite the formula or method of computation for the fixed-fee (if any). The fixed-fee must be claimed as provided for by the contract.

  

	(o)	Total Amounts Claimed — Insert the total amounts claimed for the current and cumulative periods. 

  

	(p)	Adjustments — Include amounts conceded by the contractor, outstanding suspensions, and/or disapprovals subject to appeal. 

  

	(q)	Grand Totals  

 The contracting officer may require the
contractor to submit detailed support for costs claimed on one or more interim invoices/financing requests. 
  

			
	 NIH(RC)-4
	 	ATTACHMENT 2
	 Rev. 11/2003
	 	Page 3

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 FINANCIAL REPORTING INSTRUCTIONS: 
 These instructions are keyed to the Columns on the sample invoice/financing request. 
 Column A—Expenditure Category - Enter the expenditure categories required by the contract. 
 Column B—Cumulative Percentage of Effort/Hrs.-Negotiated - Enter the percentage of effort or number of hours agreed to doing contract negotiations for each
employee or labor category listed in Column A. 
 Column C—Cumulative Percentage of Effort/Hrs.-Actual - Enter the percentage of effort or number
of hours worked by each employee or labor category listed in Column A. 
 Column D—Incurred Cost-Current - Enter
the costs, which were incurred during the current period. 
 Column E—Incurred Cost-Cumulative - Enter the
cumulative cost to date. 
 Column F—Cost at Completion - Enter data only when the contractor estimates that a particular expenditure category
will vary from the amount negotiated. Realistic estimates are essential. 
 Column G— Contract Amount - Enter the costs agreed to during contract
negotiations for all expenditure categories listed in Column A. 
 Column H—Variance (Over or Under) - Show the difference between the estimated
costs at completion (Column F) and negotiated costs (Column G) when entries have been made in Column F. This column need not be filled in when Column F is blank. When a line item varies by plus or minus 10 percent, i.e., the percentage arrived at by
dividing Column F by Column G, an explanation of the variance should be submitted. In the case of an overrun (net negative variance), this submission shall not be deemed as notice under the Limitation of Cost (Funds) Clause of the contract.

 Modifications: Any modification in the amount negotiated for an item since the preceding report should be listed in the appropriate cost category.

 Expenditures Not Negotiated: An expenditure for an item for which no amount was negotiated (e.g., at the discretion of the contractor in
performance of its contract) should be listed in the appropriate cost category and all columns filled in, except for G. Column H will of course show a 100 percent variance and will be explained along with those identified under H above. 

 

			
	 NIH(RC)-4
	 	ATTACHMENT 2
	 Rev. 11/2003
	 	Page 4

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 SAMPLE INVOICE/FINANCING REQUEST AND CONTRACT FINANCIAL REPORT 
  

							
	(a)	  	Billing Office Name and Address	  	(b)	 	Invoice/Financing Request No.
                                       
 
		  	NATIONAL INSTITUTES OF HEALTH	  	(c)	 	Date Invoice Prepared
                                        
              
		  	National Cancer Institute, OA	  		 	
		  	EPS, Room	  	(d)	 	Contract No.
                                        
                                    
		  	6120 EXECUTIVE BLVD MSC	  		 	ADB No.
                                        
                    
		  	Bethesda, MD 20892-	  		 	Effective Date
                                        
            
				
	(e)	  	Payee’s Name and Address	  		 	
		  	ABC CORPORATION	  		 	
		  	100 Main Street	  	(f)	 	Total Estimated Cost
                                        
    
		  	Anywhere, USA zip code	  		 	
		  		  	(g)	 	Total Fixed Fee
                                        
        
	Attn:	  	Name, Title, & Phone Number of Official to Whom	  		 	
		  	Payment is Sent	  		 	

  

	(h)	This invoice/financing request represents reimbursable costs for the period from              to
             

  

															
	 Expenditure Category A*
	  	Cumulative
Percentage of
Effort/Hrs.	  	Incurred Cost	  	 Cost at
 Completion
 F
	  	 Contract
 Amount
 G
	  	 Variance
 H

	  	Negotiated
B	  	Actual
C	  	(i)
Current
D	  	(j)
Cumulative
E	  	  	  
								
	 (k) Direct Costs:
	  		  		  		  		  		  		  	
	 (1) Direct Labor
	  		  		  		  		  		  		  	
	 (2) Fringe Benefits
	  		  		  		  		  		  		  	
	 (3) Accountable Property
	  		  		  		  		  		  		  	
	       (attach HHS-565)
	  		  		  		  		  		  		  	
	 (4) Materials & Supplies
	  		  		  		  		  		  		  	
	 (5) Premium Pay
	  		  		  		  		  		  		  	
	 (6) Consultant Fees
	  		  		  		  		  		  		  	
	 (7) Travel
	  		  		  		  		  		  		  	
	 (8) Subcontracts
	  		  		  		  		  		  		  	
	 (9) Other
	  		  		  		  		  		  		  	
	 Total Direct Costs
	  		  		  		  		  		  		  	
	 (l) Cost of Money
	  		  		  		  		  		  		  	
	 (m) Overhead
	  		  		  		  		  		  		  	
	 G&A
	  		  		  		  		  		  		  	
	 (n) Fixed Fee
	  		  		  		  		  		  		  	
	 (o) Total Amount Claimed
	  		  		  		  		  		  		  	
	 (p) Adjustments
	  		  		  		  		  		  		  	
	 (q) Grand Totals
	  		  		  		  		  		  		  	

 I certify that all payments are for appropriate purposes and in accordance with the contract. 
  
  

			
	 (Name of Official)
	 	(Title)

  

	*	Attach details as specified in the contract 

  

			
	 NIH(RC)-4
	 	ATTACHMENT 2
	 Rev. 11/2003
	 	Page 5

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 HHSAR 352.223-70 SAFETY AND HEALTH (JANUARY 2001) 
  

	(a)	To help ensure the protection of the life and health of all persons, and to help prevent damage to property, the Contractor shall comply with all Federal, State and local laws and
regulations applicable to the work being performed under this contract. These laws are implemented and/or enforced by the Environmental Protection Agency, Occupational Safety and Health Administration and other agencies at the Federal, State and
local levels (Federal, State and local regulatory/enforcement agencies). 

  

	(b)	Further, the Contractor shall take or cause to be taken additional safety measures as the Contracting Officer in conjunction with the project or other appropriate officer,
determines to be reasonably necessary. If compliance with these additional safety measures results in an increase or decrease in the cost or time required for performance of any part of work under this contract, an equitable adjustment will be made
in accordance with the applicable “Changes” Clause set forth in this contract. 

  

	(c)	The Contractor shall maintain an accurate record of, and promptly report to the Contracting Officer, all accidents or incidents resulting in the exposure of persons to toxic
substances, hazardous materials or hazardous operations; the injury or death of any person; and/or damage to property incidental to work performed under the contract and all violations for which the Contractor has been cited by any Federal, State or
local regulatory/enforcement agency. The report shall include a copy of the notice of violation and the findings of any inquiry or inspection, and an analysis addressing the impact these violations may have on the work remaining to be performed. The
report shall also state the required action(s), if any, to be taken to correct any violation(s) noted by the Federal, State or local regulatory/enforcement agency and the time frame allowed by the agency to accomplish the necessary corrective
action. 

  

	(d)	If the Contractor fails or refuses to comply promptly with the Federal, State or local regulatory/enforcement agency’s directive(s) regarding any violation(s) and prescribed
corrective action(s), the Contracting Officer may issue an order stopping all or part of the work until satisfactory corrective action (as approved by the Federal, State or local regulatory/enforcement agencies) has been taken and documented to the
Contracting Officer. No part of the time lost due to any stop work order shall be subject to a claim for extension of time or costs or damages by the Contractor. 

  

	(e)	The Contractor shall insert the substance of this clause in each subcontract involving toxic substances, hazardous materials, or operations. Compliance with the provisions of this
clause by subcontractors will be the responsibility of the Contractor. 

 (End of clause) 
  

			
	 Safety and Health Clause
	 	ATTACHMENT 3
	 HHSAR 352.223-70, (1/01)
	 	

 Contract No. HHSN266200600008C 
 ADB No. N01-AI-60008 
 PROCUREMENT OF CERTAIN EQUIPMENT 
 Notwithstanding any other clause in this contract, the Contractor will not be reimbursed for the purchase, lease, or rental of any item of equipment listed in the
following Federal Supply Groups, regardless of the dollar value, without the prior written approval of the Contracting Officer. 
 67 -
Photographic Equipment 
 69 - Training Aids and Devices 
 70 - General Purpose ADP Equipment, Software, Supplies and Support (Excluding 7045-ADP Supplies and Support 
         Equipment.) 
 71 - Furniture 
 72 - Household and Commercial Furnishings and Appliances 
 74 - Office Machines and Visible Record Equipment 
 77 - Musical Instruments, Phonographs, and Home-type
Radios 
 78 - Recreational and Athletic Equipment 
 When equipment in these Federal Supply Groups is requested by the Contractor and determined essential by the Contracting Officer, the Government will endeavor to fulfill the requirement with equipment available from its excess personal
property sources, provided the request is made under a contract. Extensions or renewals of approved existing leases or rentals for equipment in these Federal Supply Groups are excluded from the provisions of this article. 
  

			
	 NIH(RC)-7 (4/1/84)
	 	ATTACHMENT 4
	 OMB Bulletin 81-16
	 	

 Contract No. HHSN261 
  

			
	 Employee Separation Checklist
	 	ATTACHMENT

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