Document:

EX-10.2

 Exhibit 10.2 

REGISTRATION RIGHTS AGREEMENT 

This Registration Rights Agreement (this “Agreement”) is made and entered into as of June 25, 2014, by and among
Eclipse Resources Corporation, a Delaware corporation (the “Company”), Eclipse Resources Holdings, L.P., a Delaware limited partnership (“Eclipse Holdings”), EnCap Energy Capital Fund VIII, L.P., a
Texas limited partnership (“EnCap VIII”), EnCap Energy Capital Fund VIII Co-Investors, L.P., a Texas limited partnership (“EnCap VIII Co-Investors”), EnCap Energy Capital Fund IX, L.P., a Texas limited
partnership (“EnCap IX”), CKH Partners II, L.P., a Pennsylvania limited partnership (“CKH II”), The Hulburt Family II Limited Partnership, a Pennsylvania limited partnership (“Hulburt Family
II”), Kirkwood Capital, L.P., a Pennsylvania limited partnership (“Kirkwood”), and Eclipse Management, L.P., a Delaware limited partnership (“Eclipse Management”). 

WHEREAS, in connection with, and in consideration of, the transactions contemplated by the Company’s Registration Statement on
Form S-1 (File No. 333-195679) and the Master Reorganization Agreement (as hereinafter defined), the Parties (other than the Company) have requested, and the Company has agreed to provide, registration rights with respect to the Registrable
Securities (as hereinafter defined) as set forth in this Agreement. 
 NOW THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each Party hereto, the Parties hereby agree as follows: 

1. Definitions. As used in this Agreement, the following terms have the meanings indicated: 

“Affiliate” of any specified Person means any other person that, directly or indirectly, is in control of, is
controlled by, or is under common control with, such specified Person. For purposes of this definition, “control” of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such
Person, whether through ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing. 

“Agreement” has the meaning set forth in the preamble. 

“Automatic Shelf Registration Statement” means an “automatic shelf registration statement” as
defined under Rule 405. 
 “Blackout Period” has the meaning set forth in Section 3(n). 

“Board” means the board of directors of the Company. 

“Business Day” means any day other than a Saturday, Sunday or any other day on which banking institutions in the State
of Texas or the State of New York are authorized or required to be closed. 
 “CKH II” has the meaning set forth in
the preamble. 
 “Commission” means the Securities and Exchange Commission or any other federal agency then
administering the Securities Act or the Exchange Act. 
 “Common Stock” means the common stock, par value $0.01 per
share, of the Company. 

 “Company” has the meaning set forth in the preamble. 

“Company Securities” means any equity interest of any class or series in the Company. 

“Demand Notice” means a Holdings Demand Notice or Holder Demand Notice. 

“Demand Registration” means a Holdings Demand Registration or a Holder Demand Registration. 

“Eclipse Holdings” has the meaning set forth in the preamble. 

“Eclipse Management” has the meaning set forth in the preamble. 

“Effective Date” means the time and date that a Registration Statement is first declared effective by the Commission
or otherwise becomes effective. 
 “Effectiveness Period” has the meaning set forth in Section 2(a)(iv).

 “EnCap VIII” has the meaning set forth in the preamble. 

“EnCap VIII Co-Investors” has the meaning set forth in the preamble. 

“EnCap IX” has the meaning set forth in the preamble. 

“EnCap Parties” means, collectively, EnCap VIII, EnCap VIII Co-Investors and EnCap IX, and “EnCap
Party” means any of them. 
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 

“FINRA” means the Financial Industry Regulatory Authority, Inc. 

“Holder” means: (i) Eclipse Holdings at any time that it holds Registrable Securities; (ii) EnCap VIII at
any time that it holds Registrable Securities; (iii) EnCap VIII Co-Investors at any time that it holds Registrable Securities; (iv) EnCap IX at any time that it holds Registrable Securities; (v) CKH II at any time that it holds
Registrable Securities; (vi) Hulburt Family II at any time that it holds Registrable Securities; (vii) Kirkwood at any time that it holds Registrable Securities; (viii) Eclipse Management at any time that it holds Registrable
Securities; and (ix) any holder of Registrable Securities to whom registration rights conferred by this Agreement have been transferred in compliance with Section 9(d) hereof; provided, however, that any Person
referenced in clause (ix) shall be a Holder only if such Person agrees in writing to be bound by and subject to the terms set forth in this Agreement. 

“Holder Demand Notice” has the meaning set forth in Section 2(a)(ii). 

“Holder Demand Registration” has the meaning set forth in Section 2(a)(ii). 

“Holdings Demand Notice” has the meaning set forth in Section 2(a)(i). 

“Holdings Demand Registration” has the meaning set forth in Section 2(a)(i). 

“Hulburt Family II” has the meaning set forth in the preamble. 

  
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 “Initiating Holder” means the Holder delivering the Demand Notice or the
Underwritten Offering Notice, as applicable. 
 “Kirkwood” has the meaning set forth in the preamble. 

“Limited Partner” means a limited partner of Eclipse Holdings. 

“Losses” has the meaning set forth in Section 6(a). 

“Master Reorganization Agreement” means that certain Master Reorganization Agreement, dated as of June 6, 2014,
by and among Eclipse Resources I, LP, a Delaware limited partnership, Eclipse GP, LLC, a Delaware limited liability company, EnCap VIII, EnCap VIII Co-Investors, EnCap IX, CKH II, Hulburt Family II, Kirkwood, Eclipse Management, Eclipse Holdings,
the Company, Benjamin W. Hulburt, Christopher K. Hulburt and Thomas S. Liberatore. 
 “Material Adverse Change”
means (i) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market in the United States; (ii) the declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States; (iii) a material outbreak or escalation of armed hostilities or other international or national calamity involving the United States or the declaration by the United States of a
national emergency or war or a change in national or international financial, political or economic conditions; and (iv) any event, change, circumstance or effect that is or is reasonably likely to be materially adverse to the business,
properties, assets, liabilities, condition (financial or otherwise), operations, results of operations or prospects of the Company and its subsidiaries taken as a whole. 

“Minimum Amount” has the meaning set forth in Section 2(a)(iii). 

“Parties” means the Company, Eclipse Holdings, EnCap VIII, EnCap VIII Co-Investors, EnCap IX, CKH II, Hulburt Family
II, Kirkwood, Eclipse Management and any Person that may become a party to this Agreement pursuant to the terms hereof. 

“Person” means an individual, corporation, partnership, trust, incorporated or unincorporated association, joint
venture, limited liability company, joint stock company, estate, trust, government (or an agency or subdivision thereof) or other entity of any kind. 

“Piggyback Notice” has the meaning set forth in Section 2(c)(i). 

“Piggyback Registration” has the meaning set forth in Section 2(c)(i). 

“Proceeding” means any action, claim, suit, proceeding or investigation (including a preliminary investigation or
partial proceeding, such as a deposition) pending or, to the knowledge of the Company, to be threatened. 

“Prospectus” means the prospectus included in a Registration Statement (including a prospectus that includes any
information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance upon Rule 430A, Rule 430B or Rule 430C promulgated under the Securities Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference in such Prospectus. 

  
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 “Records” has the meaning set forth in Section 3(l). 

“Registrable Securities” means the Shares; provided, however, that Registrable Securities shall not
include: (i) any Shares the offering and sale of which has been registered under the Securities Act, and that have been disposed of pursuant to an effective Registration Statement; (ii) any Shares transferred to a Person who is not
entitled to the registration and other rights hereunder; (iii) any Shares that have been sold or transferred by the Holder thereof pursuant to Rule 144 (or any similar provision then in force under the Securities Act) and the transferee thereof
does not receive “restricted securities” as defined in Rule 144; (iv) any Shares that may be sold pursuant to Rule 144(b)(1) without the necessity of meeting the conditions set forth in Rule 144(c)(1); and (v) any Shares that
cease to be outstanding (whether as a result of repurchase and cancellation, conversion or otherwise). The Company shall not be required to register the offering and sale of the same Registrable Securities under more than one Registration Statement
at any one time. 
 “Registration Expenses” means: (i) all registration and filing fees (including fees and
expenses (A) with respect to filings required to be made with the Trading Market or FINRA and (B) in compliance with applicable state securities or “Blue Sky” laws); (ii) reasonable printing expenses (including expenses of
printing certificates for Company Securities and of printing Prospectuses if the printing of Prospectuses is reasonably requested by a Selling Stockholder included in the Registration Statement); (iii) reasonable messenger, telephone and
delivery expenses; (iv) reasonable transfer agent fees; (v) reasonable fees and disbursements of counsel, auditors, accountants and independent petroleum engineers for the Company; (vi) Securities Act liability insurance, if the
Company so desires such insurance; (vii) reasonable fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement; and (viii) all expenses relating to
marketing the sale of the Registrable Securities, including expenses related to conducting a “road show.” 

“Registration Statement” means a registration statement of the Company in the form required to register the resale of
the Registrable Securities under the Securities Act, and including any Prospectus, amendments and supplements to each such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material
incorporated by reference or deemed to be incorporated by reference in such registration statement. 
 “Requested Underwritten
Offering” has the meaning set forth in Section 2(b)(i). 
 “Resale Distribution” has the
meaning set forth in Section 2(a)(i). 
 “Rule 144” means Rule 144 promulgated by the Commission
pursuant to the Securities Act. 
 “Rule 405” means Rule 405 promulgated by the Commission pursuant to the
Securities Act. 
 “Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act. 

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act. 

“Securities Act” means the Securities Act of 1933, as amended. 

“Selling Expenses” means all discounts, commissions or fees of underwriters, selling brokers, dealer managers or
similar industry professionals and stock transfer taxes applicable to the sale of Registrable Securities and fees and disbursements of counsel for any Holder or Selling Stockholder. 

  
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 “Selling Stockholder” means a Party (other than the Company) included as
a selling stockholder selling Registrable Securities pursuant to a Registration Statement. 
 “Selling Stockholder Indemnified
Persons” has the meaning set forth in Section 6(a). 
 “Senior Notes Registration Rights
Agreement” means that certain Registration Rights Agreement, dated as of June 26, 2013, by and among Eclipse Resources I, LP, the guarantors from time to time party thereto, and Blackstone Holdings Finance Co. L.L.C., GSO Eclipse
Holdings I LP, MTP Energy Master Fund LTD, MTP Energy Opportunities Fund LLC, Magnetar Capital Fund II, LP, Hipparchus Fund LP, Magnetar Global Event Driven Fund LLC, Blackwell Partners LLC, Magnetar Structured Credit Fund, LP, Triangle Peak
Partners Private Equity, LP, the Northwestern Mutual Life Insurance Company, the Northwestern Mutual Life Insurance Company for its Group Annuity Separate Account, Northwestern Long Term Care Insurance Company and Northwestern Mutual Capital
Mezzanine Fund III, LP. 
 “Shares” means the shares of Common Stock issued to Eclipse Holdings pursuant to the
Master Reorganization Agreement and any other equity interests of the Company or equity interests in any successor of the Company issued in respect of such shares by reason of or in connection with any stock dividend, stock split, combination,
reorganization, recapitalization, conversion to another type of entity or similar event involving a change in the capital structure of the Company. 

“Shelf Registration Statement” means a Registration Statement of the Company filed with the Commission on Form S-3 (or
any successor form or other appropriate form under the Securities Act) for an offering to be made on a continuous or delayed basis pursuant to Rule 415 (or any similar rule that may be adopted by the Commission) covering Registrable Securities, as
applicable. 
 “Suspension Period” has the meaning set forth in Section 3(o). 

“Trading Market” means the principal national securities exchange on which Registrable Securities are listed. 

“Underwriting Agreement” means that certain Underwriting Agreement, dated as of June 19, 2014, by and among
Eclipse, CKH II, Hulburt Family II, Kirkwood, EnCap VIII, EnCap VIII Co-Investors, and EnCap IX, and Citigroup Global Markets Inc., Goldman, Sachs & Co., and Morgan Stanley & Co. LLC, as representatives of the several underwriters
named therein. 
 “Underwritten Offering” means an underwritten offering of Common Stock in which shares of Common
Stock are sold to one or more underwriters for reoffering to the public (whether a Requested Underwritten Offering or in connection with a public offering of Common Stock by the Company, a public offering of Common Stock by stockholders, or both,
but excluding an offering relating solely to an employee benefit plan, an offering relating to a transaction on Form S-4 or S-8 (or any similar forms adopted after the date hereof as replacements therefor) or an offering on any registration
statement form that does not permit secondary sales). 
 “Underwritten Offering Notice” has the meaning set forth in
Section 2(b)(i). 
 “VWAP” means, as of a specified date and in respect of Registrable Securities, the
volume weighted average price for such security on the Trading Market with respect to the Registrable Securities for the twenty (20) trading days immediately preceding, but excluding, such date. 

“WKSI” means a “well known seasoned issuer” as defined under Rule 405. 

  
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 Unless the context requires otherwise: (a) any pronoun used in this Agreement shall include
the corresponding masculine, feminine or neuter forms; (b) references to Sections refer to Sections of this Agreement; (c) the terms “include,” “includes,” “including” and words of like import shall be deemed
to be followed by the words “without limitation”; (d) the terms “hereof,” “herein” or “hereunder” refer to this Agreement as a whole and not to any particular provision of this Agreement; (e) unless
the context otherwise requires, the term “or” is not exclusive and shall have the inclusive meaning of “and/or”; (f) defined terms herein will apply equally to both the singular and plural forms and derivative forms of
defined terms will have correlative meanings; (g) references to any law or statute shall include all rules and regulations promulgated thereunder, and references to any law, statute or rule shall be construed as including any legal and
statutory provisions consolidating, amending, succeeding or replacing the applicable law, statute or rule; (h) references to any Person include such Person’s successors and permitted assigns; and (i) references to “days” are
to calendar days unless otherwise indicated. 
 2. Registration. 

(a) Demand Registration. 

(i) At any time, Eclipse Holdings shall have, to the extent it holds Registrable Securities, the option and right, exercisable
by delivering a written notice to the Company (a “Holdings Demand Notice”), to require the Company, pursuant to the terms of and subject to the limitations contained in this Agreement, to prepare and file with the Commission
a Registration Statement registering the offering and sale of Registrable Securities (whether by Eclipse Holdings directly or indirectly by Limited Partners) on the terms and conditions specified in the Holdings Demand Notice, which may include
sales on a delayed or continuous basis pursuant to Rule 415 pursuant to a Shelf Registration Statement (a “Holdings Demand Registration”). The Holdings Demand Notice must set forth the number and type of Registrable
Securities that Eclipse Holdings anticipates will be included in such Holdings Demand Registration and the intended methods of disposition thereof. If Registrable Securities are to be distributed by Eclipse Holdings to one or more Limited Partners
to permit the sale of such Registrable Securities directly by such Limited Partners as Selling Stockholders (such a distribution, a “Resale Distribution”), Eclipse Holdings shall deliver a written notice to each Limited
Partner that (i) specifies the amount of Registrable Securities that Eclipse Holdings estimates distributing to such Limited Partner in the Resale Distribution, and (ii) offers such Limited Partner the right to include all (but not less
than all) of such Registrable Securities in the Holdings Demand Registration. The Company shall use commercially reasonable efforts to include any Registrable Securities to be received by a Limited Partner upon a Resale Distribution in such Holdings
Demand Registration if the Company has received a written request for inclusion therein from such Limited Partner within three (3) Business Days after Eclipse Holdings sends the Holdings Demand Notice. 

(ii) At any time, any Holder (other than Eclipse Holdings, which shall exercise its demand registration rights pursuant to
Section 2(a)(i)) shall have the option and right, exercisable by delivering a written notice to the Company (a “Holder Demand Notice”), to require the Company to, pursuant to the terms of and subject to the
limitations contained in this Agreement, prepare and file with the Commission a Registration Statement registering the offering and sale of Registrable Securities on the terms and conditions specified in the Holder Demand Notice, which may include
sales on a delayed or continuous basis pursuant to Rule 415 pursuant to a Shelf Registration Statement (a “Holder Demand Registration”). The Holder Demand Notice must set forth the number and type of Registrable Securities
that the Initiating Holder anticipates will be included in such Holder Demand Registration and the intended methods of disposition thereof. 

  
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 (iii) Notwithstanding anything to the contrary herein, in no event shall the
Company be required to effectuate a Demand Registration for Registrable Securities having an aggregate value of less than $30 million based on the VWAP of such Registrable Securities as of the date of the Demand Notice (the “Minimum
Amount”). 
 (iv) Within five (5) Business Days of the receipt of the Demand Notice, the Company shall give
written notice of such Demand Notice to all Holders (other than the Initiating Holder) and, within thirty (30) days thereof (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which
case, within ninety (90) days thereof), shall, subject to the limitations of this Section 2(a), file a Registration Statement in accordance with the terms and conditions of the Demand Notice, which Registration Statement shall
cover, in addition to the Registrable Securities set forth in the Demand Notice, all of the Registrable Securities that such Holders shall in writing request to be included in the Demand Registration (provided such request is given to the Company
within ten (10) days of receipt of notice of the Demand Notice given by the Company pursuant to this Section 2(a)(iv) and includes such information regarding the requesting Holder as is required to be disclosed in connection with
such Demand Registration pursuant to Regulation S-K promulgated under the Securities Act). If, following the receipt of written notice from the Company of a Demand Notice, Eclipse Holdings elects to undertake a Resale Distribution to permit its
Limited Partners to participate in such Demand Registration, Eclipse Holdings shall promptly send written notice to the Limited Partners participating in the Resale Distribution that specifies the amount of Registrable Securities that Eclipse
Holdings anticipates distributing to such Limited Partner in the Resale Distribution, and the Limited Partners may include such Registrable Securities in the Demand Registration if written notice is provided by the Limited Partners to the Company
within the time period, and with the required information, set forth in the previous sentence. The Company shall use commercially reasonable efforts to cause such Registration Statement to become and remain effective under the Securities Act until
the earlier of (A) one hundred eighty (180) days (or two (2) years if a Shelf Registration Statement is requested) after the Effective Date or (B) the date on which all Registrable Securities covered by such Registration
Statement have been sold or cease to be Registrable Securities (the “Effectiveness Period”); provided, however, that such period shall be extended for a period of time equal to the period the Selling
Stockholders refrain from selling any securities included in such Registration Statement at the request of an underwriter of the Company or the Company pursuant to this Agreement. 

(v) Subject to the other limitations contained in this Agreement, the Company is not obligated hereunder to effect: (A) a
Demand Registration within ninety (90) days of the closing of any Underwritten Offering, or (B) a subsequent Demand Registration pursuant to a Demand Notice if a Registration Statement covering all of the Registrable Securities covered by
such Demand Notice shall already have become effective under the Securities Act and remains effective under the Securities Act and is sufficient to permit offers and sales of such Registrable Securities on the terms and conditions specified in such
Demand Notice in accordance with the intended timing and method or methods of distribution thereof specified in such Demand Notice. 

  
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 (vi) Subject to Section 2(a)(i), a Selling Stockholder may withdraw
all or any portion of its Registrable Securities included in a Demand Registration from such Demand Registration at any time prior to the effectiveness of the applicable Registration Statement. Upon delivery of a notice by a Selling Stockholder to
the effect that the Selling Stockholder is withdrawing Registrable Securities such that the remaining Registrable Securities are below the Minimum Amount, the Company shall cease all efforts to secure effectiveness of the applicable Registration
Statement. 
 (vii) Subject to the limitations contained in this Agreement, the Company shall effect any Demand Registration
on such appropriate registration form of the Commission (x) as shall be selected by the Company and (y) as shall permit the disposition of the Registrable Securities in accordance with the intended method or methods of disposition
specified in the Initiating Holder’s request for such registration; provided, however, that if the Company becomes, and is at the time of its receipt of a Demand Notice, a WKSI, the Demand Registration for any offering and selling
of Registrable Securities shall be effected pursuant to an Automatic Shelf Registration Statement, which shall be on Form S-3 or any equivalent or successor form under the Securities Act (if available to the Company). If at any time a Registration
Statement on Form S-3 is effective and a Selling Stockholder provides written notice to the Company that it intends to effect an offering of all or part of the Registrable Securities included on such Registration Statement, the Company will amend or
supplement such Registration Statement as may be necessary in order to enable such offering to take place. 
 (viii) Without
limiting Section 3, in connection with any Demand Registration pursuant to and in accordance with this Section 2(a), the Company shall (A) promptly prepare and file or cause to be prepared and filed (1) such
additional forms, amendments, supplements, prospectuses, certificates, letters, opinions and other documents, as may be necessary or advisable to register or qualify the securities subject to such Demand Registration, including under the securities
laws of such states as the Selling Stockholders shall reasonably request; provided, however, that no such registration or qualification shall be required in any jurisdiction where, as a result thereof, the Company would become subject
to general service of process or to taxation or would be required to qualify to do business or register as a broker or dealer, and (2) such forms, amendments, supplements, prospectuses, certificates, letters, opinions and other documents as may
be necessary to apply for listing or to list the Registrable Securities subject to such Demand Registration on the Trading Market and (B) do any and all other acts and things that may be reasonably necessary or appropriate or reasonably
requested by the Selling Stockholders to enable the Selling Stockholders to consummate a public sale of such Registrable Securities in accordance with the intended timing and method or methods of distribution thereof. 

(ix) In the event a Selling Stockholder transfers Registrable Securities included on a Registration Statement and such
Registrable Securities remain Registrable Securities following such transfer, at the request of such Selling Stockholder, the Company shall amend or supplement such Registration Statement as may be necessary in order to enable such transferee to
offer and sell such Registrable Securities pursuant to such Registration Statement; provided that in no event shall the Company be required to file a post-effective amendment to the Registration Statement unless (A) such Registration
Statement includes only Registrable Securities held by the Selling Stockholder, Affiliates of the Selling Stockholder or transferees of the Selling Stockholder or (B) the Company has received written consent therefor from whom Registrable
Securities have been registered on (but not yet sold under) such Registration Statement, other than the Selling Stockholder, Affiliates of the Selling Stockholder or transferees of the Selling Stockholder. 

  
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 (b) Requested Underwritten Offering. 

(i) Any Holder then able to effectuate a Demand Registration pursuant to the terms of Section 2(a) shall have the
option and right, exercisable by delivering written notice to the Company (an “Underwritten Offering Notice”), to require the Company, pursuant to the terms of and subject to the limitations of this Agreement, to effectuate a
distribution of Registrable Securities by means of an Underwritten Offering pursuant to an effective Registration Statement (or pursuant to an effective Automatic Shelf Registration Statement) (a “Requested Underwritten
Offering”); provided, however, that the Registrable Securities requested to be included in such Requested Underwritten Offering have an aggregate value at least equal to the Minimum Amount. If, in connection with the
submission of an Underwritten Offering Notice, Eclipse Holdings elects to undertake a Resale Distribution to permit its Limited Partners to directly participate in a Requested Underwritten Offering, Eclipse Holdings shall promptly send written
notice to the Limited Partners participating in the Resale Distribution that specifies the amount of Registrable Securities that Eclipse Holdings anticipates distributing to such Limited Partner in the Resale Distribution and contains the
information set forth in the Underwritten Offering Notice, and the Limited Partners may include such Registrable Securities in the Requested Underwritten Offering if written notice is promptly provided by the Limited Partners to the Company. 

(ii) The managing underwriter or managing underwriters of a Requested Underwritten Offering shall be designated by the
Initiating Holder (provided, however, that such designated managing underwriter or managing underwriters shall be a nationally recognized investment banking firm reasonably acceptable to the Company). Notwithstanding the foregoing, the
Company is not obligated to effect a Requested Underwritten Offering within 90 days of the closing of an Underwritten Offering. 

(iii) If the managing underwriter or underwriters of a proposed Requested Underwritten Offering of the Registrable Securities
included in a Demand Registration advise the Company that, in its or their opinion, the number of securities requested to be included in such Requested Underwritten Offering exceeds the number which can be sold in such Requested Underwritten
Offering without being likely to have a significant adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, the securities to be included in such Requested Underwritten Offering shall
be allocated, (A) first, pro rata among the Parties (other than the Company) that (prior to any cutback) would participate in such Underwritten Offering based on the relative number of Registrable Securities that would be held by each
such Party following any related Resale Distribution, if any; provided, however, that any securities thereby allocated to a Party that exceed such Party’s request shall be reallocated among the remaining Parties in like manner;
(B) second, and only if all the securities referred to in clause (A) have been included in such registration, to the Company up to the number of securities that the Company proposes to include in such registration that, in the opinion of
the managing underwriter or underwriters can be sold without having such adverse effect and (C) third, and only if all of the securities referred to in clause (B) have been included in such registration, up to the number of securities that
in the opinion of the managing underwriter or underwriters can be sold without having such adverse effect. 

  
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 (c) Piggyback Registration. 

(i) If the Company shall at any time propose to conduct a registered offering of Common Stock (whether a registered offering of
Common Stock by the Company or a registered offering of Common Stock by the Company’s stockholders (including a Requested Underwritten Offering), or both, but excluding an offering relating solely to an employee benefit plan, an offering
relating to a transaction on Form S-4 or S-8 (or any similar forms adopted after the date hereof as replacements therefor) or an offering on any registration statement form that does not permit secondary sales), the Company shall promptly notify all
Holders of such proposal reasonably in advance of (and in any event at least five (5) Business Days before) the commencement of such offering, which notice will set forth the principal terms and conditions of the issuance, including the
proposed offering price (or range of offering prices), the anticipated filing date of the registration statement (if not yet filed) and the number of shares of Common Stock that are proposed to be registered (the “Piggyback
Notice”); provided, however, notwithstanding any other provision of this Agreement, if the managing underwriter or managing underwriters of an Underwritten Offering (other than a Requested Underwritten Offering) advise the
Company that in their reasonable opinion that the inclusion of a Holder’s Registrable Securities requested for inclusion in the subject Underwritten Offering (and any related registration, if applicable) would likely have an adverse effect on
the price, timing, marketing or distribution of Common Stock proposed to be included in such Underwritten Offering, the Company shall have no obligation to provide a Piggyback Notice to such Holder and such Holder shall have no right to include any
Registrable Securities in such Underwritten Offering (and any related registration, if applicable). The Piggyback Notice shall offer the Holders the opportunity to include in such offering (and any related registration, if applicable) the number of
Registrable Securities as they may request (a “Piggyback Registration”); provided, however, that in the event that the Company proposes to effectuate the subject offering pursuant to an effective Shelf
Registration Statement of the Company other than an Automatic Shelf Registration Statement, only Registrable Securities of Holders which are subject to such effective Shelf Registration Statement may be included in such Piggyback Registration. The
Company shall use commercially reasonable efforts to include in each such Piggyback Registration such Registrable Securities for which the Company has received written requests for inclusion within three (3) Business Days (or within one
(1) Business Day in the case of an “overnight” offering or “bought deal”) after sending the Piggyback Notice, provided that such written request sets forth such information regarding the Selling Stockholder as is
required to be disclosed in connection with the offering (and any related registration, if applicable) pursuant to Regulation S-K promulgated under the Securities Act. If, following the receipt of a Piggyback Notice, Eclipse Holdings elects to
undertake a Resale Distribution to permit its Limited Partners to participate in such Piggyback Registration, Eclipse Holdings shall send written notice to the Limited Partners participating in such Resale Distribution that (i) specifies the
amount of Registrable Securities that Eclipse Holdings anticipates distributing to such Limited Partner in the Resale Distribution and (ii) sets forth the information contained in the Piggyback Notice, and the Limited Partners may thereafter
include such Registrable Securities in the Piggyback Registration if written notice is provided by the Limited Partners to the Company within the time periods, and with the required information, set forth in the previous sentence. 

  
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 (ii) If a Holder decides not to include for registration in an offering
contemplated by this Section 2(c) (and any related registration, if applicable) such Holder’s Registrable Securities following the receipt of a Piggyback Notice, such Holder shall nevertheless continue to have the right to include
any of such Holder’s Registrable Securities in any subsequent offering contemplated by this Section 2(c) (and any related registration, if applicable) in accordance with this Section 2(c). 

(iii) If the managing underwriter or managing underwriters of an Underwritten Offering advise the Company and the Holders that
in their reasonable opinion that the inclusion of all of the Registrable Securities requested for inclusion in an Underwritten Offering (other than a Requested Underwritten Offering) would likely have an adverse effect on the price, timing,
marketing or distribution of Common Stock proposed to be included in such offering, the Company shall include in such Underwritten Offering only that number of shares of Common Stock proposed to be included in such Underwritten Offering that, in the
reasonable opinion of the managing underwriter or managing underwriters, will not have such effect, with such number to be allocated as follows: (A) first, to the Company, (B) second, if there remains availability for additional shares of
Common Stock to be included in such Underwritten Offering following the allocation to the Company under (A), pro rata among the Parties (other than the Company) that (prior to any cutback) would participate in such Underwritten Offering based
on the relative number of Registrable Securities that would be held by each such Party following any related Resale Distribution, if any, and (C) if there remains availability for additional shares of Common Stock to be included in such
registration following the allocation to the Parties under (B), third pro rata among all other Persons holding Common Stock who may be seeking to register such Common Stock pursuant to incidental or piggyback registration rights based on the
number of Common Stock such Person is entitled to include in such registration. 
 (iv) Any Holder or Limited Partner shall
have the right to withdraw all or part of its request for inclusion of its Registrable Securities in a Piggyback Registration by giving written notice to the Company of its request to withdraw; provided, however, that (i) such
request must be made in writing prior to the effectiveness of such Registration Statement and (ii) such withdrawal shall be irrevocable and, after making such withdrawal, a Holder or Limited Partner shall no longer have any right to include
Registrable Securities in the Piggyback Registration as to which such withdrawal was made. 
 (v) The Company shall have the
right to terminate or suspend any registered offering as to which Holders have a right to a Piggyback Registration pursuant to this Section 2(c) (other than any registered offering initiated by a Holder pursuant to
Section 2(a)–(b)) at any time in its sole discretion, and without any obligation to any Party (whether or not such Party has elected to exercise its right to a Piggyback Registration pursuant to this Section 2(c)). 

(vi) For the avoidance of doubt, this Section 2(c) shall not apply with respect to the initial public offering of
the Company’s Common Stock. 

  
 11 

 3. Registration and Underwritten Offering Procedures. 

The procedures to be followed by the Company and each Selling Stockholder electing to sell Registrable Securities in a Registration Statement
pursuant to this Agreement, and the respective rights and obligations of the Company and such Selling Stockholders with respect to the preparation, filing and effectiveness of such Registration Statement and the effectuation of any Underwritten
Offering, are as follows: 
 (a) in connection with a Demand Registration, the Company will, at least three (3) Business
Days prior to the anticipated filing of the Registration Statement and any related Prospectus or any amendment or supplement thereto (other than, after effectiveness of the Registration Statement, any filing made under the Exchange Act that is
incorporated by reference into the Registration Statement), (i) furnish to such Selling Stockholders copies of all such documents prior to filing and (ii) use commercially reasonable efforts to address in each such document when so filed
with the Commission such comments as such Selling Stockholders reasonably shall propose prior to the filing thereof. 
 (b)
in connection with a Piggyback Registration or a Requested Underwritten Offering, the Company will, at least three (3) Business Days prior to the anticipated filing of any initial Registration Statement that identifies the Selling Stockholders
and any related Prospectus or any amendment or supplement thereto (other than amendments and supplements that do not materially alter the previous disclosure or do nothing more than name the Selling Stockholders and provide information with respect
thereto), as applicable, (i) furnish to such Selling Stockholders copies of any such Registration Statement or related Prospectus or amendment or supplement thereto that identify the Selling Stockholder and any related Prospectus or any
amendment or supplement thereto (other than amendments and supplements that do not materially alter the previous disclosure or do nothing more than name Selling Stockholders and provide information with respect thereto) prior to filing and
(ii) use commercially reasonable efforts to address in each such document when so filed with the Commission such comments as such Selling Stockholders reasonably shall propose prior to the filing thereof. 

(c) The Company will use commercially reasonable efforts to as promptly as reasonably practicable (i) prepare and file
with the Commission such amendments, including post-effective amendments, and supplements to each Registration Statement and the Prospectus used in connection therewith as may be necessary under applicable law to keep such Registration Statement
continuously effective with respect to the disposition of all Registrable Securities covered thereby for its Effectiveness Period; (ii) cause the related Prospectus to be amended or supplemented by any required prospectus supplement, and as so
supplemented or amended to be filed pursuant to Rule 424; and (iii) respond to any comments received from the Commission with respect to each Registration Statement or any amendment thereto and, as promptly as reasonably practicable provide
such Selling Stockholders true and complete copies of all correspondence from and to the Commission relating to such Registration Statement that pertains to such Selling Stockholders as selling stockholders but not any comments that would result in
the disclosure to such Selling Stockholders of material and non-public information concerning the Company. 
 (d) The Company
will comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the Registration Statements and the disposition of all Registrable Securities covered by each Registration Statement. 

(e) The Company will notify such Selling Stockholders who are included in a Registration Statement as promptly as reasonably
practicable: (i)(A) when a Prospectus or any prospectus supplement or post-effective amendment to a Registration Statement in which such Selling Stockholder is included has been filed; (B) when the Commission notifies the Company whether there
will be a “review” of the applicable Registration Statement and whenever the 

  
 12 

 
Commission comments in writing on such Registration Statement (in which case the Company shall provide true and complete copies thereof and all written responses thereto to each of such Selling
Stockholders that pertain to such Selling Stockholders as selling stockholders); and (C) with respect to each applicable Registration Statement or any post-effective amendment thereto, when the same has been declared effective; (ii) of any
request by the Commission or any other federal or state governmental authority for amendments or supplements to such Registration Statement or Prospectus or for additional information that pertains to such Selling Stockholders as sellers of
Registrable Securities; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of such Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (v) of the occurrence of any event or passage of time that makes any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading
(provided, however, that no notice by the Company shall be required pursuant to this clause (v) in the event that the Company either promptly files a prospectus supplement to update the Prospectus or a Form 8-K or other
appropriate Exchange Act report that is incorporated by reference into the Registration Statement, which in either case, contains the requisite information that results in such Registration Statement no longer containing any untrue statement of
material fact or omitting to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading). 

(f) The Company will use commercially reasonable efforts to avoid the issuance of or, if issued, obtain the withdrawal of
(i) any order suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, as promptly as
reasonably practicable, or if any such order or suspension is made effective during any Blackout Period or Suspension Period, as promptly as reasonably practicable after such Blackout Period or Suspension Period is over. 

(g) During the Effectiveness Period, the Company will furnish to each Selling Stockholder, without charge, at least one
conformed copy of each Registration Statement and each amendment thereto and all exhibits to the extent requested by such Selling Stockholder (including those incorporated by reference) promptly after the filing of such documents with the
Commission; provided, however, that the Company will not have any obligation to provide any document pursuant to this clause that is available on the Commission’s EDGAR system. 

(h) The Company will promptly deliver to each Selling Stockholder, without charge, as many copies of each Prospectus or
Prospectuses (including each form of prospectus) authorized by the Company for use and each amendment or supplement thereto as such Selling Stockholder may reasonably request during the Effectiveness Period. Subject to the terms of this Agreement,
including Section 3(o), the Company consents to the use of such Prospectus and each amendment or supplement thereto by each of the Selling Stockholders in connection with the offering and sale of the Registrable Securities covered by
such Prospectus and any amendment or supplement thereto. 

  
 13 

 (i) The Company will cooperate with such Selling Stockholders to facilitate the
timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free of all restrictive legends indicating that the Registrable
Securities are unregistered or unqualified for resale under the Securities Act, Exchange Act or other applicable securities laws, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Selling
Stockholder may request in writing. In connection therewith, if required by the Company’s transfer agent, the Company will promptly, after the Effective Date of the Registration Statement, cause an opinion of counsel as to the effectiveness of
the Registration Statement to be delivered to and maintained with its transfer agent, together with any other authorizations, certificates and directions required by the transfer agent which authorize and direct the transfer agent to issue such
Registrable Securities without any such legend upon sale by the Selling Stockholder of such Registrable Securities under the Registration Statement. 

(j) Upon the occurrence of any event contemplated by Section 3(e)(v), as promptly as reasonably practicable, the
Company will prepare a supplement or amendment, including a post-effective amendment, if required by applicable law, to the affected Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be
incorporated therein by reference, and file any other required document so that, as thereafter delivered, no Registration Statement nor any Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 

(k) In connection with any Requested Underwritten Offering, the Company will use commercially reasonable efforts to cause
appropriate officers and employees to be available, on a customary basis and upon reasonable notice, to meet with prospective investors in presentations, meetings and “road shows.” 

(l) With respect to Underwritten Offerings, (i) the right of any Selling Stockholder to include such Selling
Stockholder’s Registrable Securities in an Underwritten Offering shall be conditioned upon such Selling Stockholder’s participation in such underwriting and the inclusion of such Selling Stockholder’s Registrable Securities in the
underwriting to the extent provided herein, (ii) each Selling Stockholder participating in such Underwritten Offering agrees to enter into an underwriting agreement in customary form and sell such Selling Stockholder’s Registrable
Securities on the basis provided in any underwriting arrangements approved by the Persons entitled to select the managing underwriter or managing underwriters hereunder and (iii) each Selling Stockholder participating in such Underwritten
Offering agrees to complete and execute all questionnaires, powers of attorney, indemnities, custody agreements, lock-ups, “hold back” agreements, and other documents reasonably required under the terms of such underwriting arrangements.
The Company hereby agrees with each Selling Stockholder that, in connection with any Underwritten Offering in accordance with the terms hereof, it will negotiate in good faith and execute all customary indemnities, underwriting agreements and other
documents reasonably required under the terms of such underwriting arrangements, including using all commercially reasonable efforts to procure customary legal opinions, auditor “comfort” letters and reports of independent petroleum
engineers of the Company relating to the oil and gas reserves of the Company included in the Registration Statement if the Company has had its reserves prepared, audited or reviewed by an independent petroleum engineer. In the event such Selling
Stockholders seek to complete an Underwritten Offering, for a reasonable period prior to the filing of any Registration Statement and throughout the Effectiveness Period, the Company will make available upon reasonable notice at the Company’s
principal place of business or such other reasonable place for inspection during normal business hours by the managing underwriter 

  
 14 

 
or managing underwriters selected in accordance with this Section 3(l) such financial and other information and books and records of the Company (collectively, the
“Records”), and cause the officers, employees, counsel and independent certified public accountants of the Company to respond to such inquiries, as shall be reasonably necessary (and in the case of counsel, not violate an
attorney-client privilege in such counsel’s reasonable belief) to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that, unless the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in the Registration Statement or the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, the Company shall not be required to
provide any Records under this Section 3(l) if (i) the Company believes, after consultation with counsel for the Company, that to do so would cause the Company to forfeit an attorney-client privilege that was applicable to such
Records, or (ii) if either (A) the Company has requested and been granted from the Commission confidential treatment of such Records contained in any filing with the Commission or documents provided supplementally or otherwise or
(B) the Company reasonably determines in good faith that such Records are confidential and so notifies the Person so inspecting in writing, unless prior to furnishing any such Records with respect to clause (ii) such Person requesting such
Records agrees to enter into a confidentiality agreement in customary form and subject to customary exceptions; and provided, further, that each Party agrees that it shall, upon learning that disclosure of such Records is sought in a
court of competent jurisdiction, give notice to the Company and allow the Company, at its expense, to undertake appropriate action and to prevent disclosure of the Records deemed confidential. 

(m) Each Selling Stockholder agrees to furnish to the Company any other information regarding the Selling Stockholder and the
distribution of such securities as the Company reasonably determines is required to be included in any Registration Statement or any prospectus or prospectus supplement relating to an Underwritten Offering. 

(n) Notwithstanding any other provision of this Agreement, the Company shall not be required to file a Registration Statement
(or any amendment thereto) or effect a Requested Underwritten Offering (or, if the Company has filed a Shelf Registration Statement and has included Registrable Securities therein, the Company shall be entitled to suspend the offer and sale of
Registrable Securities pursuant to such Registration Statement) for a period of up to 60 days, if (A) the Board determines that a postponement is in the best interest of the Company and its stockholders generally due to a pending transaction
involving the Company (including a pending securities offering by the Company, or any proposed financing, acquisition, merger, tender offer, business combination, corporate reorganization, consolidation or other significant transaction involving the
Company), (B) the Board determines such registration would render the Company unable to comply with applicable securities laws, (C) the Board determines such registration would require disclosure of material information that the Company
has a bona fide business purpose for preserving as confidential, or (D) audited financial statements as of a date other than the fiscal year end of the Company would be required to be prepared (any such period, a “Blackout
Period”); provided, however, that in no event shall any Blackout Period together with any Suspension Period collectively exceed an aggregate of 120 days in any 12 month period. In addition, if the Company receives a
Demand Notice and the Company is then in the process of preparing to engage in a public offering, the Company shall inform the Initiating Holder of the Company’s intent to engage in a public offering and may require the Initiating Holder to
withdraw the Demand Notice for a period of up to one hundred twenty (120) days so that the Company may complete its public offering. In the event that the Company ceases to pursue such public offering, it shall promptly inform the Initiating
Holder, and the Initiating Holder shall be permitted to submit a new Demand Notice. 

  
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 (o) Discontinued Disposition. Each Selling Stockholder agrees that, upon
receipt of a notice from the Company of the occurrence of any event of the kind described in clauses (ii) through (v) of Section 3(e), such Selling Stockholder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until such Selling Stockholder’s receipt of the copies of the supplemental Prospectus or amended Registration Statement as contemplated by Section 3(j) or until it is advised in writing by
the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement (a “Suspension Period”). During any Suspension Period, if so directed by the Company, such Selling Stockholder must deliver to the Company all copies in its possession, other than permanent file copies
then in the Selling Stockholder’s possession, of the Prospectus covering such Registrable Shares current at the time of receipt of such notice, and shall keep the information contained in such, as well as any knowledge related to the reason for
the Suspension Period, confidential. The Company may provide appropriate stop orders to enforce the provisions of this Section 3(o). 

(p) Except as otherwise specifically provided in this Agreement, in all offerings of the Company’s securities the Company
shall have sole discretion to select the underwriters. 
 4. No Inconsistent Agreements. With the exception of the Senior
Notes Registration Rights Agreement, the Company shall not hereafter enter into, and is not currently a party to, any agreement with respect to its securities that is inconsistent in any material respect with the rights granted to the Parties by
this Agreement. 
 5. Registration Expenses. All Registration Expenses incident to the Company’s performance of or
compliance with its obligations under this Agreement shall be borne by the Company, whether or not any Registrable Securities are sold pursuant to a Registration Statement. In addition, the Company shall be responsible for all of its expenses
incurred in connection with the consummation of the transactions contemplated by this Agreement (including expenses payable to third parties and including all salaries and expenses of its officers and employees performing legal or accounting
duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on the Trading Market. The Company shall not be required to pay any Selling Expenses, fees of any counsel
retained by any underwriter with respect to any Requested Underwritten Offering, or any other expenses of the Parties (other than the Company) not specifically required to be paid pursuant to this Section 5. 

6. Indemnification. 

(a) The Company shall indemnify and hold harmless each Selling Stockholder whose Registrable Securities are covered by a
Registration Statement, each Person who controls such Selling Stockholder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), and each of their respective officers and directors and any agent thereof
(collectively, “Selling Stockholder Indemnified Persons”), to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, joint or several, costs (including reasonable
costs of preparation and reasonable attorneys’ fees) and expenses, judgments, fines, penalties, interest, settlements or other amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal,
administrative or investigative, in which any Selling Stockholder Indemnified Person may be involved, or is threatened to be involved, as a party or otherwise, under the Securities Act or otherwise (collectively, “Losses”),
as incurred, arising out of or relating to any untrue or alleged untrue statement of a material fact contained in any Registration Statement under which any Registrable Securities of such Selling 

  
 16 

 
Stockholder were registered, in any related preliminary prospectus (if the Company authorized the use of such preliminary prospectus prior to the Effective Date), or in any related summary or
final prospectus or free writing prospectus (if such free writing prospectus was authorized for use by the Company) or in any amendment or supplement thereto (if used during the period the Company is required to keep the Registration Statement
current), or arising out of, based upon or resulting from the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances in which
they were made, not misleading; provided, however, that the Company shall not be liable to any Selling Stockholder Indemnified Person to the extent that any such claim arises out of, is based upon or results from: (i) an
untrue or alleged untrue statement or omission or alleged omission made in such Registration Statement, such preliminary, summary or final prospectus or free writing prospectus or such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such Selling Stockholder Indemnified Person or any underwriter specifically for use in the preparation thereof; or (ii) any sales by a Selling Stockholder after the delivery by the
Company to such Selling Stockholder of written notice of a Suspension Period and before the written confirmation by the Company that sales may be resumed. The Company shall notify the Selling Stockholders promptly of the institution, threat or
assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement. This indemnity shall be in addition to any liability the Company may otherwise have. 

(b) In connection with any Registration Statement in which a Selling Stockholder participates, all such participating Selling
Stockholders shall, severally and not jointly, indemnify and hold harmless the Company, each Person who controls the Company (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), and each of their
respective officers, directors and any agent thereof to the fullest extent permitted by applicable law, from and against any and all Losses as incurred, arising out of or relating to (i) any untrue or alleged untrue statement of a material fact
contained in any such Registration Statement, in any preliminary prospectus (if used prior to the Effective Date of such Registration Statement), or in any summary or final prospectus or free writing prospectus or in any amendment or supplement
thereto (if used during the period the Company is required to keep the Registration Statement current), or arising out of, based upon or resulting from the omission or alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements made therein, in the light of the circumstances in which they were made, not misleading, but only to the extent that the same are made in reliance and in conformity with information relating to the Selling
Stockholder furnished in writing to the Company by or on behalf of such Selling Stockholder for use therein and (ii) any sales by such Selling Stockholders after the delivery by the Company to such Selling Stockholders of written notice of a
Suspension Period and before the written confirmation by the Company that sales may be resumed. This indemnity shall be in addition to any liability such Selling Stockholder may otherwise have. In no event shall the liability of any Selling
Stockholder hereunder be greater in amount than the dollar amount of the proceeds received by such Selling Stockholder under the sale of the Registrable Securities giving rise to such indemnification obligation. 

(c) Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any
claim with respect to which it seeks indemnification and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim or there may
be reasonable defenses available to the indemnified party that are different from or additional to those available to the indemnifying party, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to
the indemnified party. An indemnifying 

  
 17 

 
party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel (in addition to any local counsel) for
all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party there may be one or more legal or equitable defenses available to such indemnified party that are in addition
to or may conflict with those available to another indemnified party with respect to such claim. The delay or failure to give prompt written notice shall not release the indemnifying party from its obligations hereunder except to the extent that the
indemnifying party has been prejudiced by such delay or failure. An indemnifying party shall not be liable for any settlement effected by the indemnified party without the written consent of such indemnifying party. 

(d) If the indemnification provided for in this Section 6 is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any Losses referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or
payable by such indemnified party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and of the indemnified party, on the other, in connection with the untrue or
alleged untrue statement of a material fact or the omission to state a material fact that resulted in such Losses, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party
shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the
indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, however, that in no event shall any contribution by a Selling
Stockholder hereunder exceed the net proceeds from the offering received by such Selling Stockholder. 
 7. Facilitation of Sales
Pursuant to Rule 144. For so long as the Company is subject to the reporting requirements of Sections 13 or 15(d) of the Exchange Act, the Company shall (i) timely file the reports required to be filed by it under the Exchange Act or
the Securities Act (including the reports under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144), and (ii) take such further action as any Holder may reasonably request, all to the extent required from
time to time to enable the Holders to sell Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144. Upon the request of any Holder in connection with that Holder’s
sale pursuant to Rule 144, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements. 

8. Duration of Agreement. The Company shall have no further obligations pursuant to this Agreement on the first date no
Registrable Shares are outstanding after their original issuance; provided, however, that the Company’s and any Selling Stockholder’s obligations under Section 6 shall survive such termination. Eclipse Holdings
shall cease to be a Party to this Agreement and have no further rights hereunder on the date on which it no longer holds Registrable Securities, and each Party (other than Eclipse Holdings and the Company) shall cease to be a Party to this Agreement
and shall have no further rights hereunder on the date on which neither Eclipse Holdings nor such Party holds Registrable Securities. 

  
 18 

 9. Miscellaneous. 

(a) Remedies. In the event of a breach by the Company of any of its obligations under this Agreement, each Holder, in
addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company agrees that monetary damages would not
provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate. 
 (b) Amendments and Waivers. No provision of this Agreement may be
waived or amended except in a written instrument signed by the Parties. The Company shall provide prior notice to all Parties of any proposed waiver or amendment. No waiver of any default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any Party to exercise any right
hereunder in any manner impair the exercise of any such right. Notwithstanding the foregoing, a waiver or consent to depart from the provisions of this Agreement with respect to a matter that relates exclusively to the rights of Selling Stockholders
whose Registrable Securities are being sold pursuant to a Registration Statement and that does not materially adversely affect the rights of other Parties may be given by Selling Stockholders selling of a majority of the Registrable Securities being
sold pursuant to such Registration Statement. 
 (c) Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile or electronic mail
as specified in this Section 9(c) prior to 5:00 p.m. Central Time on a Business Day, (ii) the Business Day after the date of transmission, if such notice or communication is delivered via facsimile or electronic mail as specified in
this Agreement later than 5:00 p.m. Central Time on any date and earlier than 11:59 p.m. Central Time on such date, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service, (iv) the
date of delivery, if delivered personally, or (v) upon actual receipt by the Party to whom such notice is required to be given. The contact information for such notices and communications shall be as set forth on the signature pages hereto (or
as any such party may designate by written notice to the other parties in accordance with this Section 9(c)). 

(d) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their
respective heirs, executors, administrators, successors, legal representatives and permitted assigns. Except as provided in this Section 9(d), this Agreement, and any rights or obligations hereunder, may not be assigned without the prior
written consent of the Company. Notwithstanding anything in the foregoing to the contrary, the registration rights of Eclipse Holdings or any EnCap Party pursuant to this Agreement with respect to all or any portion of its Registrable Securities may
be assigned without such consent (but only with all related obligations) with respect to such Registrable Securities by such Party to a transferee of such Registrable Securities; provided (i) the Company is, within a reasonable time
after such transfer, furnished with written notice of the name and address of such transferee or assignee and the Registrable Securities with respect to which such registration rights are being assigned and (ii) such transferee or assignee
agrees in writing to be bound by and subject to the terms set forth in this Agreement. The Company may not assign its rights or obligations hereunder without the prior written consent of the Holders. 

(e) No Third Party Beneficiaries. Nothing in this Agreement, whether express or implied, shall be construed to give any
Person, other than the parties hereto or their respective successors and permitted assigns, any legal or equitable right, remedy, claim or benefit under or in respect of this Agreement. 

  
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 (f) Execution and Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile or electronic mail
transmission, such signature shall create a valid binding obligation of the Party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such signature delivered by facsimile or electronic mail
transmission were the original thereof. 
 (g) Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without giving effect to its choice of law or conflict of law provisions or rules. Each of the Parties irrevocably submits to the exclusive
jurisdiction of the courts of the State of Delaware and the United States District Court for the District of Delaware for the purpose of any suit, action, proceeding or judgment relating to or arising out of this Agreement and the transactions
contemplated hereby. Service of process in connection with any such suit, action or proceeding may be served on each Party anywhere in the world by the same methods as are specified for the giving of notices under this Agreement. Each of the Parties
irrevocably waives any objection to the laying of venue of any such suit, action or proceeding brought in such courts and irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. Each of the Parties agrees that a judgment in any such suit, action or proceeding may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. EACH OF THE PARTIES HEREBY IRREVOCABLY
WAIVES ANY RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER. 

(h) Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.

 (i) Headings. The section and paragraph headings contained in this Agreement are for reference purposes only and
should not affect in any way the meaning or interpretation of this Agreement. 
 (j) Severability. If any term,
provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the Parties shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the Parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable. 
 (k) Entire Agreement. This Agreement constitutes the
entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous contracts, agreements and understandings with respect to the subject matter hereof and the matters addressed or governed
hereby, whether oral or written. 

  
 20 

 [SIGNATURE PAGE FOLLOWS] 

  
 21 

 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written
above. 
  

			
	ECLIPSE RESOURCES CORPORATION
		
	By:	 	 /s/ Benjamin W. Hulburt

	Name: Benjamin W. Hulburt
	Title: President and Chief Executive Officer
	
	Information for Notice:
	
	Eclipse Resources Corporation
	2121 Old Gatesburg Road, Suite 110
	State College, Pennsylvania 16803
	Attention: General Counsel
	Fax: (480) 393-4565
	Electronic mail: chulburt@eclipseresouces.com
	
	With a copy to:
	
	Fulbright & Jaworski LLP
	(a member of Norton Rose Fulbright)
	2200 Ross Avenue, Suite 2800
	Dallas, Texas 75201
	Attention: Glen J. Hettinger
	Fax: (214) 855-8000
	Electronic mail: glen.hettinger@nortonrosefulbright.com
	
	ECLIPSE RESOURCES HOLDINGS, L.P.
		
	By:	 	 /s/ Benjamin W. Hulburt

	Name: Benjamin W. Hulburt
	Title: President and Chief Executive Officer
	
	Information for Notice:
	
	Eclipse Resources Holdings, L.P.
	2121 Old Gatesburg Road, Suite 110
	State College, Pennsylvania 16803
	Attention: Board of Managers
	Fax: (480) 393-4565
	Electronic mail: bhulburt@eclipseresources.com

 [Registration Rights Agreement – Eclipse Resources Corporation] 

 
			
	ENCAP ENERGY CAPITAL FUND VIII, L.P.
		
	By:	 	EnCap Equity Fund VIII GP, L.P.,
		 	General Partner of EnCap Energy Capital Fund VIII, L.P.
		
	By:	 	EnCap Investments L.P.,
		 	General Partner of EnCap Equity Fund VIII GP, L.P.
		
	By:	 	EnCap Investments GP, L.L.C.,
		 	General Partner of EnCap Investments L.P.
		
	By:	 	 /s/ Robert L. Zorich

	Name: Robert L. Zorich
	Title: Managing Partner
	
	Information for Notice:
	
	c/o EnCap Investments L.P.
	1100 Louisiana, Suite 4900
	Houston, Texas 77002
	Attention: Mark E. Burroughs, Jr.
	Fax: (713) 659-6130
	Electronic mail: mburroughs@encapinvestments.com
	
	With a copy to:
	
	Thompson & Knight LLP
	333 Clay Street, Suite 3300
	Houston, Texas 77002
	Attention: Michael K. Pierce
	Fax: (832) 397-8049
	Electronic mail: michael.pierce@tklaw.com

  
 [Registration Rights
Agreement – Eclipse Resources Corporation] 

 
			
	 ENCAP ENERGY CAPITAL FUND VIII CO-INVESTORS, L.P.

		
	 By:
	 	EnCap Equity Fund VIII GP, L.P.,
		 	General Partner of EnCap Energy Capital Fund VIII Co-
		 	Investors, L.P.
		
	 By:
	 	EnCap Investments L.P.,
		 	General Partner of EnCap Equity Fund VIII GP, L.P.
		
	 By:
	 	EnCap Investments GP, L.L.C.,
		 	General Partner of EnCap Investments L.P.
		
	 By:
	 	 /s/ Robert L. Zorich

	 Name: Robert L. Zorich

	 Title: Managing Partner

	
	 Information for Notice:

	
	 c/o EnCap Investments L.P.

	 1100 Louisiana, Suite 4900

	 Houston, Texas 77002

	 Attention: Mark E. Burroughs, Jr.

	 Fax: (713) 659-6130

	 Electronic mail: mburroughs@encapinvestments.com

	
	 With a copy to:

	
	 Thompson & Knight LLP

	 333 Clay Street, Suite 3300

	 Houston, Texas 77002

	 Attention: Michael K. Pierce

	 Fax: (832) 397-8049

	 Electronic mail: michael.pierce@tklaw.com

  
 [Registration Rights
Agreement – Eclipse Resources Corporation] 

 
			
	 ENCAP ENERGY CAPITAL FUND IX, L.P.

		
	 By:
	 	EnCap Equity Fund IX GP, L.P.,
		 	General Partner of EnCap Energy Capital Fund IX, L.P.
		
	 By:
	 	EnCap Investments L.P.,
		 	General Partner of EnCap Equity Fund IX GP, L.P.
		
	 By:
	 	EnCap Investments GP, L.L.C.,
		 	General Partner of EnCap Investments L.P.
		
	 By:
	 	 /s/ Robert L. Zorich

	 Name: Robert L. Zorich

	 Title: Managing Partner

	
	 Information for Notice:

	
	 c/o EnCap Investments L.P.

	 1100 Louisiana, Suite 4900

	 Houston, Texas 77002

	 Attention: Mark E. Burroughs, Jr.

	 Fax: (713) 659-6130

	 Electronic mail: mburroughs@encapinvestments.com

	
	 With a copy to:

	
	 Thompson & Knight LLP

	 333 Clay Street, Suite 3300

	 Houston, Texas 77002

	 Attention: Michael K. Pierce

	 Fax: (832) 397-8049

	 Electronic mail: michael.pierce@tklaw.com

  
 [Registration Rights
Agreement – Eclipse Resources Corporation] 

 
			
	THE HULBURT FAMILY II LIMITED PARTNERSHIP
		
	By:	 	BWH Management Company II, LLC,
		 	General Partner of The Hulburt Family II Limited Partnership
		
	By:	 	 /s/ Benjamin W. Hulburt

	Name: Benjamin W. Hulburt
	Title: Manager
	
	Information for Notice:
	
	c/o Eclipse Resources Corporation
	2121 Old Gatesburg Road, Suite 110
	State College, Pennsylvania 16803
	Attention: Benjamin W. Hulburt
	Fax: (480) 393-4565
	e-mail: bhulburt@eclipseresources.com
	
	CKH PARTNERS II, L.P.
		
	By:	 	CKH Management Company II, LLC
		 	General Partner of CKH Partners II, L.P.
		
	By:	 	 /s/ Christopher K. Hulburt

	Name: Christopher K. Hulburt
	Title: Manager
	
	Information for Notice:
	
	c/o Eclipse Resources Corporation
	2121 Old Gatesburg Road, Suite 110
	State College, Pennsylvania 16803
	Attention: Christopher K. Hulburt
	Fax: (480) 393-4565
	e-mail: chulburt@eclipseresources.com

  
 [Registration Rights
Agreement – Eclipse Resources Corporation] 

 
			
	KIRKWOOD CAPITAL, L.P.
		
	By:	 	Mountaineer Ventures, LLC,
		 	General Partner of Kirkwood Capital, L.P.
		
	By:	 	 /s/ Thomas S. Liberatore

	Name: Thomas S. Liberatore
	Title: Manager
	
	Information for Notice:
	
	c/o Eclipse Resources Corporation
	2121 Old Gatesburg Road, Suite 110
	State College, Pennsylvania 16803
	Attention: Thomas S. Liberatore
	Fax: (480) 393-4565
	e-mail: tliberatore@eclipseresources.com
	
	ECLIPSE MANAGEMENT, L.P.
		
	By:	 	Eclipse Management GP, LLC,
		 	General Partner of Eclipse Management, L.P.
		
	By:	 	 /s/ Benjamin W. Hulburt

	Name: Benjamin W. Hulburt
	Title: President and Chief Executive Officer
	
	Information for Notice:
	
	c/o Eclipse Resources Corporation
	2121 Old Gatesburg Road, Suite 110
	State College, Pennsylvania 16803
	Attention: Benjamin W. Hulburt
	Fax: (480) 393-4565
	e-mail: bhulburt@eclipseresources.com

  
 [Registration Rights
Agreement – Eclipse Resources Corporation]Exhibit 10.7

 

DRUG DISCOVERY COLLABORATION AGREEMENT

 

This DRUG DISCOVERY COLLABORATION AGREEMENT (the “Agreement”), effective as of July 3, 2013 (the “Effective Date”), is made by and between Array BioPharma Inc., a Delaware corporation, having a principal place of business at 3200 Walnut Street, Boulder, Colorado 80301 (“Array”), and Loxo Oncology, Inc., a Delaware corporation, having an address at c/o Aisling Capital, 888 7th Avenue, 30th Floor, New York, New York 10106 (“Loxo”).

 

BACKGROUND

 

A.                                    Array has skills, expertise and proprietary technology for the discovery, generation, optimization and preclinical testing of small molecule clinical candidates from drug discovery programs.  Loxo possesses pharmaceutical research, development and commercialization capabilities, as well as proprietary technology in the field of cancer treatment.

 

B.                                    Array and Loxo have each identified multiple oncology kinase targets that have the potential to be used as the basis for drug discovery programs.  As of the Effective Date, Array has developed assays, leads and other proprietary technology directed to certain of such targets.

 

C.                                    Loxo and Array desire to enter a collaboration wherein Array will perform certain research on several of such oncology kinase targets with assistance from Loxo, with the goal of developing small molecule inhibitors of such targets for clinical and commercial development by Loxo.

 

NOW, THEREFORE, for and in consideration of the covenants, conditions and undertakings hereinafter set forth, it is agreed by and between the Parties as follows:

 

ARTICLE 1

DEFINITIONS

 

As used herein, the following terms will have the meanings set forth below:

 

1.1                               “Active Compound” shall mean (i) a Compound that modulates a Target, the mechanism of which is a binding interaction with a Target, having a level of activity against a Target, expressed as an IC50, that is [***] as measured in the applicable in vitro biochemical assay set forth in the Discovery Plan; and (ii) a Compound that modulates at least two of the following receptors: TrkA, TrkB or TrkC, the mechanism of which is a binding interaction with the applicable Trk receptor, having a level of activity against the applicable Trk receptor, expressed as an IC50, that is [***] as measured in the applicable in vitro biochemical assay set forth in the Discovery Plan.  A Compound that does not meet the above activity levels may also become an Active Compound pursuant to Section 2.8(d).  For clarity, a Compound that modulates only one of TrkA, TrkB or TrkC at the appropriate level shall not be deemed an Active Compound.

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

1.2                               “Affiliate” shall mean any corporation or other entity, whether de jure or de facto, which is directly or indirectly controlling, controlled by or under common control of a Party hereto for so long as such control exists.  For the purposes of this Section 1.2, “control” shall mean the direct or indirect ownership of at least fifty percent (50%) of the outstanding shares or other voting rights of the subject entity having the power to vote on or direct the affairs of the entity, or if not meeting the preceding, the maximum voting right that may be held by the particular Party under the laws of the country where such entity exists.

 

1.3                               “Array Technology” shall mean Array Patents and Array Know-How, in each case that are (i) Controlled by Array or Controlled by an Array Affiliate that is controlled by Array (where “control” is as defined in the definition of Affiliate in this Agreement) and are reasonably necessary or useful for the Parties to conduct their respective activities under the Discovery Program and for Loxo to develop, make, have made, use, import, offer to sell and sell Active Compounds and Products in the Field; and (ii) Controlled by Array or Controlled by an Array Affiliate that is controlled by Array (where “control” is as defined in the definition of Affiliate in this Agreement) and are necessary for Loxo to develop, make, have made, use, import, offer to sell and sell Active Compounds and Products in the Field.  For clarity, Array Technology described in subparagraph (ii) of this Section 1.3 shall not include Collaboration Technology.

 

1.3.1                                 “Array Know-How” shall mean all ideas, inventions, data, instructions, processes, formulas, expert opinions and information, including, without limitation, biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, clinical, safety, manufacturing and quality control data and information which (a) Array discloses to Loxo under this Agreement or specifically in anticipation of this Agreement and (b) is within the Control of Array.  Notwithstanding anything herein to the contrary, Array Know-How excludes published Array Patents.

 

1.3.2                                 “Array Patents” shall mean all patents and patent applications owned or Controlled by Array.

 

1.4                               “Clinical Candidate” shall mean, with respect to each Target or Trk, any Active Compound that meets the Clinical Candidate Criteria set forth in the Discovery Plan.

 

1.5                               “Collaboration Technology” shall mean all Collaboration Patents and Collaboration Know-How.

 

1.5.1                                 “Collaboration Know-How” shall mean all ideas, inventions, data, instructions, processes, formulas, expert opinions and information, including, without limitation, biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, clinical, safety, manufacturing and quality control data and information developed solely or jointly by Array and/or Loxo during and in connection with the Discovery Program.

 

1.5.2                                 “Collaboration Patents” shall mean (i) all patent applications the subject of which is an invention conceived or reduced to practice solely or jointly by Array and/or

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

2

 

Loxo in the course of performing the Discovery Program, (ii) any divisions, continuations, and continuations-in-part, including U.S. and foreign, (iii) all patents that issue as a result of any of the foregoing, and (iv) all reissues, reexaminations, extensions or other governmental actions which extend any of the subject matter of the patents in (iii) above, and any substitutions, confirmations, registrations or revalidations of any of the foregoing.

 

1.6                               “Combination Product” shall mean a Product that is a pharmaceutical preparation for human use incorporating two or more therapeutically active ingredients and including a Compound as one of its active ingredients.  Notwithstanding the foregoing, drug delivery vehicles, adjuvants, and excipients shall not be deemed to be “therapeutically active ingredients,” and their presence shall not be deemed to create a Combination Product.

 

1.7                               “Compound” shall mean any one or more chemical entity(ies) (i) made and tested against Trk in the course of Array’s pan-Trk program prior to the Effective Date and set forth on Exhibit C, or (ii) synthesized by Array in the course of performing or in connection with the Discovery Program, in each case together with any salt, hydrate, solvate, clathrate, polymorph or isomer thereof.  It is understood and agreed that “Compound” shall not include any Library Compound, except as provided in Section 2.8(c).

 

1.8                               “Confidential Information” shall have the meaning set forth in Section 9.1.

 

1.9                               “Control,” “Controls,” “Controlled” or “Controlling” shall mean possession of the ability to grant the licenses or sublicenses as provided herein without violating the terms of any agreement or other arrangements with any Third Party.

 

1.10                        “Discovery Program” shall mean the research activities undertaken by the Parties pursuant to Article 2 below.

 

1.11                        “Discovery Plan” shall mean the written research plan governing the joint effort of the Parties in conducting the Discovery Program, which may be amended from time to time by mutual agreement of the Parties or as described in Section 2.3.  The initial Discovery Plan has been mutually agreed in writing by the Parties as of the date of signing this Agreement, and shall be the operative Discovery Plan unless and until amended, modified or updated as provided in this Agreement.

 

1.12                        “Discovery Program Term” shall mean the term of the Discovery Program, as provided in Section 2.6 below.

 

1.13                        “Field” shall mean the diagnosis, treatment or prevention of any disease or condition in humans.

 

1.14                        “FTE” shall mean a full-time person dedicated to the Discovery Program, or in the case of less than a full-time, dedicated person, a full-time, equivalent person year, based upon a total of [***] hours per year of work in connection with the Discovery Program.

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

3

 

1.15                        “IND” shall mean an investigational new drug application filed with the FDA as more fully defined in 21 C.F.R. § 312.3

 

1.16                        “IND-Enabling Studies” shall mean studies performed specifically for inclusion in an IND, including without limitation ADME and GLP toxicology, as well as formulation and manufacturing development necessary to obtain the permission of regulatory authorities to begin human clinical testing.

 

1.17                        “JRC” or “Joint Research Committee” shall have the meaning set forth in Section 3.1.

 

1.18                        “Lead Compound” shall mean an Active Compound selected for clinical development in accordance with Section 2.5 below.

 

1.19                        “Library Compound” shall mean a chemical entity, existing as of the Effective Date, that is contained within the collection of chemical entities that Array uses for screening.

 

1.20                        “Net Sales” means the gross invoice price by a Party or an Affiliate or a sublicensee of a Party, as the case may be, for Products sold by such Party, Affiliate or sublicensee (“Selling Party”), under this Agreement in arm’s length sales to non-sublicensee Third Parties less deductions allowed to the Third Party customer by the Selling Party, to the extent actually taken by the Third Party customer, on such sales for:

 

(a)                                 trade, quantity, and cash discounts;

 

(b)                                 credits, rebates and chargebacks (including those to managed-care entities and government agencies), and allowances or credits to customers on account of rejection or returns (including, but not limited to, wholesaler and retailer returns) or on account of retroactive price reductions affecting such Product;

 

(c)                                  freight, postage and duties, and transportation charges specifically relating to Product, including handling and insurance thereto; and

 

(d)                                 sales (such as VAT or its equivalent) and excise taxes, other consumption taxes, customs duties and compulsory payments to governmental authorities and any other governmental charges imposed upon the sale of the Product to Third Parties.

 

Sales among the Selling Party and its Affiliates shall be excluded from the computation of Net Sales, and no royalties will be payable on such sales except where such Affiliates are end users, and sales from one Party or its Affiliate to the other Party or its Affiliate for use in development activities, in the further manufacture or Products, or for resale shall be excluded from the computation of Net Sales; provided, however, in each case that any subsequent resale to a Third Party shall be included within Net Sales.  In addition, the Selling Party may exclude from Net Sales a reasonable provision for uncollectible accounts, to the extent such reserve is determined in accordance with GAAP, consistently applied across all product lines of the particular Party, until such amounts are actually

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

4

 

collected.  Net Sales shall not include, and no royalty shall be due on, Products used in clinical trials or other research and development activities, or Products given as samples.

 

In the event a Product is sold which is a Combination Product, for purposes of determining royalty payments due Array under Section 5.4, Net Sales of Combination Products shall be calculated by multiplying the Net Sales of the Combination Product during the applicable reporting period by the fraction A/(A+B), in which “A” is the average sales price of the Product when such Product contains a Compound as the sole therapeutically active ingredient is sold separately in substantial quantities, and “B” is the average sales price of the other therapeutically active ingredients contained in the Combination Product sold separately in substantial quantities; in each case during the applicable reporting period.  In the event that no separate sales of either the Product comprising a Compound as the sole therapeutically active ingredient or the other therapeutically active ingredients of the Combination Product are made during the applicable reporting period, or if the average sales price for a particular therapeutically active ingredient cannot be determined for the applicable reporting period, the respective average sales prices during the most recent reporting period in which sales of both occurred shall be used.  In the event that either or both of A or (and) B is (are) not available, then Net Sales of Combination Products for the purposes of determining royalty payments hereunder shall be reasonably allocated based on the relative values contributed by each component, and agreement by the Parties to such allocation shall not be unreasonably withheld or delayed.

 

1.21                        “Party” or “Parties” shall mean, respectively, Array or Loxo individually, or Array and Loxo collectively.

 

1.22                        “Phase I Trial” shall mean a human clinical trial that is intended to initially evaluate the safety and/or pharmacological effect of a Product in subjects or that would otherwise satisfy requirements of 21 C.F.R. 312.21(a).

 

1.23                        “Phase II Trial” shall mean a human clinical trial in any country that is intended to initially evaluate the effectiveness of a Product for a particular indication or indications in patients with the disease or indication under study or would otherwise satisfy requirements of 21 CFR 312.21(b).  A Phase I/II trial shall not be deemed a Phase II Trial until completion of the Phase I portion of such trial and commencement of the portion of such trial that meets the foregoing definition.

 

1.24                        “Phase III Trial” shall mean a human clinical trial in any country, the results of which could be used to establish safety and efficacy of a Product as a basis for an NDA or would otherwise satisfy requirements of 21 CFR 312.21(c).

 

1.25                        “Product” shall mean any pharmaceutical product incorporating as an active ingredient an Active Compound.

 

1.26                        “Targets” shall mean (a) the proteins identified on Exhibit B or any substitute for such a protein selected in accordance with Section 2.10 below, and (b) any variant, isoform or

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

5

 

polymorphism of any such protein listed in an established protein database such as www.uniprot.org (or a similar database if www.uniprot.org is unavailable).

 

1.27                        “Trk” shall mean the Trk family of receptors: TrkA, TrkB and TrkC.

 

1.28                        “TrkA” shall mean the protein known as [***].

 

1.29                        “TrkB” shall mean the protein known as [***].

 

1.30                        “TrkC” shall mean the protein known as [***].

 

1.31                        “Territory” shall mean worldwide.

 

1.32                        “Third Party” shall mean any person or entity other than Array and Loxo, and their respective Affiliates.

 

1.33                        “Valid Claim” shall mean a claim of an issued and unexpired patent that (a) has not been held permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, which decision is unappealable or unappealed within the time allowed for appeal, and (b) has not been abandoned, disclaimed, denied or admitted to be invalid or unenforceable through reissue or disclaimer or otherwise.

 

ARTICLE 2

RESEARCH COLLABORATION

 

2.1                               Goals.  The goals of the Discovery Program with respect to the Targets and Trk are (i) the discovery and optimization of Clinical Candidates directed to the Targets and to Trk, (ii) the identification of a Lead Compound directed to each of the Targets and Trk, (iii) chemistry, manufacturing and control activities directed to and manufacture of quantities of the Lead Compounds sufficient to perform a Phase 1a (i.e. dose escalation) and a Phase 1b (i.e. dose level expansion) clinical trial [***], respectively, and (iv) the conduct of IND-Enabling Studies on the Trk Lead Compound and one (1) Lead Compound directed to a Target (selected by Loxo), in all cases pursuant to the Discovery Plan; provided, that Array shall not be required to perform GLP toxicology testing on the Trk Lead Compound and a Lead Compound directed to a Target (selected by Loxo) more than once.

 

2.2                               Conduct of the Discovery Program.  Subject to the terms and conditions set forth herein, the Parties agree to conduct research under the Discovery Program, which shall be funded as set forth in Article 5 below.  During the Discovery Program Term, Array and Loxo shall collaborate and conduct the Discovery Program in accordance with the Discovery Plan within the time schedules contemplated therein and to keep the other Party informed as to the progress and results of the Discovery Program hereunder.  It is understood that certain pre-IND development work and other Discovery Program activities will be outsourced to contract research organizations or other vendors

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

6

 

(“CRO(s)”).  The Party entering into the agreement with the CRO shall keep the other Party informed of the terms and status of each such agreement.

 

2.3                               Discovery Plan.  The Discovery Program shall be carried out in accordance with a mutually agreed upon written Discovery Plan, which shall establish specific research objectives and the research tasks to be performed and resources to be provided by each Party.  The initial Discovery Plan establishes: (i) the scope of the research activities which will be performed; (ii) the research objectives and work plan activities with respect to the Discovery Program; (iii) specific screening assays for identifying and testing the activity of Compounds and Library Compounds against the Targets and Trk; (iv) the criteria for determining when a Compound shall be deemed an Active Compound; and (v) the criteria for determining when an Active Compound shall be deemed a Clinical Candidate.  The Discovery Plan shall be reviewed on an ongoing basis and may be amended by the Joint Research Committee in accordance with Article 3.

 

2.4                               Discovery Program Staffing.  During the Discovery Program and subject to Loxo funding such FTE’s pursuant to Section 5.1, Array shall devote that number of FTE’s to the conduct of the Discovery Program specified in the Discovery Plan.  The Discovery Plan shall specify no less than [***] FTEs and no more than [***] Array FTEs at any time during the Discovery Program Term.

 

2.5                               Selection of Lead Compound.  Based upon the Clinical Candidate Criteria and the results of the Discovery Program, during the Discovery Program Term the JRC may designate a Clinical Candidate for selection by Loxo as a Lead Compound.  If the JRC determines that a particular Active Compound does not strictly meet the Clinical Candidate Criteria, but should be considered as a potential Lead Compound, then the JRC may select such Active Compound as a Lead Compound.  Upon approval by Loxo, the Active Compound or Clinical Candidate so designated by the JRC shall be deemed the Lead Compound.  Loxo may approve, or withhold its approval of, the designation of any Active Compound as the Lead Compound in Loxo’s sole discretion, whether or not such Active Compound meets the Clinical Candidate Criteria, and an Active Compound shall not be deemed the Lead Compound unless so approved by Loxo.  Any Active Compound with respect to which Array (pursuant to the Discovery Plan or with JRC approval) or Loxo intitates IND-Enabling Studies shall be deemed a Lead Compound, whether or not so designated.

 

2.6                               Term of Discovery Program.  The Discovery Program Term shall commence on the Effective Date and shall end upon the date three (3) years after the Effective Date.  Loxo may extend the Discovery Program Term for up to two (2) additional one (1) year renewal periods by providing written notice to Array at least three (3) months before the end of the initial Discovery Program Term or the renewal period, as applicable.

 

2.7                               Third Party Licenses.  In the event that the Parties agree to acquire additional technologies from a Third Party specifically for use in the conduct of the Discovery Program in the Field, Loxo will be responsible for the payment of any amounts due to Third Parties for the license

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

7

 

of intellectual property which directly applies to any Target, and the costs of negotiating, preparing and executing any such license.

 

2.8                               Records; Inspection.

 

(a)                                 Records.  Array and Loxo shall maintain records of the Discovery Program (or cause such records to be maintained) in sufficient detail and in good scientific manner as will properly reflect all work done and results achieved in the performance of the Discovery Program (including all data in the form required under any applicable governmental regulations and as directed by the JRC).  Array shall maintain such records during the Discovery Program Term and for a period of five (5) years thereafter, and shall provide Loxo access to such records at Array’s place of business upon reasonable advance notice of Loxo.

 

(b)                                 Reports and Information Exchange.  During the Discovery Program Term, each of Loxo and Array shall use commercially reasonable and diligent efforts to disclose to the other Party all material information relating to the Discovery Program, including without limitation any Active Compound and/or Clinical Candidate, promptly after it is learned or its materiality is appreciated.  Each Party shall also keep the other Party, including the Joint Research Committee, informed as to its progress under the Discovery Plan.  Within sixty (60) days following the end of each calendar quarter of the Discovery Program, each of Array and Loxo shall provide the other Party with a reasonably detailed written report describing the progress to date of all activities for which such Party was allocated responsibility during such quarter under the Discovery Plan.

 

(c)                                  Library Compounds.  Notwithstanding any other provision of this Section 2.8, Array shall not be required to disclose to Loxo the structures of any Library Compound unless such Library Compound meets those criteria required for a Compound to be an Active Compound.

 

(d)                                 Additional Active Compounds.  With respect to all Compounds that do not meet the activity levels set forth in Section 1.1, the JRC will review the Compounds for potential to be deemed an Active Compound, notwithstanding the failure to meet the above activity level, based on other reasonable factors including efficacy, response and potency.  Once the JRC has concluded that the Compound should not be deemed an Active Compound, then Array is free to include the Compound as one of its Library Compounds (subject in all case to Array’s obligations under this Agreement including without limitation Section 4.3).  If Loxo’s and Array’s members on the JRC disagree whether such factors exist and a Compound should be included as an Active Compound, such matter shall first be referred to the Parties’ respective Chief Executive Officers, who shall attempt in good faith to resolve such disagreement within thirty (30) days of such matter being referred to them (and if such matter is not resolved within such thirty (30) day period,then the parties will submit the matter to binding arbitration before a mutually agreed upon expert to determine whether such factors exist and the Compound should be deemed as an Active Compound).

 

2.9                               Post Discovery Program Activities.  For each Clinical Candidate and Product to which Loxo retains rights under this Agreement, Loxo shall be responsible, at its sole expense, for conducting all additional preclinical and clinical development of such Clinical Candidate or Product

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

8

 

following the termination of the Discovery Program Term, and all commercialization of such Clinical Candidate or Product, in accordance with Article 7.

 

2.10                        Replacement Targets.  During the Discovery Program Term, Loxo may determine in its sole discretion that research activities with respect to a particular Target should be discontinued (for example, and without limitation, such Target has not yielded sufficient progress, or scientific literature suggests the Target is intractable or is not therapeutically relevant or for safety issues).  Upon any such determination, Loxo shall provide written notice to Array of the Target or Targets that Loxo desires to remove from the Discovery Program and will include in such notification a suggested substitute for such discontinued Target.  After receipt of such notice, Array will promptly inform Loxo whether, as of the date of such written notice, the addition of such suggested substitute target would not (i) violate any agreement that Array has with a Third Party; (ii) add a target that is the subject of Array’s own active and ongoing research (with existing commitment and expenditure of resources for such target), was the subject of previous significant research at Array, or is the subject of drugs in Array’s clinical development pipeline or marketed product portfolio; or (iii) add a target with respect to which Array is engaged in active, ongoing substantial negotiations (i.e., has agreed a term sheet containing material business terms) with a Third Party.  If neither (i), (ii) or (iii) apply to such suggested substitute target, then the discontinued Target shall cease to be a Target, the suggested substitute target shall be deemed a Target for the purposes of this Agreement, and Exhibit B shall be deemed to be updated accordingly.  For the avoidance of doubt, no more than three (3) Targets in addition to Trk shall be included in the Discovery Program.  If a proposed target is not available for inclusion, then the fact that Loxo proposed such target or is otherwise interested in such target (or molecules directed to such target) shall be Loxo’s Confidential Information.

 

2.11                        Technology Transfer.  During the Discovery Program Term and the six (6) months following the Discovery Program Term, upon the request of Loxo, Array shall transfer to Loxo or its designee, without charge, such Collaboration Technology and Array Technology used in the performance of the Discovery Program and reasonable quantities of related materials as are in Array’s possession and Control and are reasonably necessary or directly useful to enable Loxo or its designee (including a manufacturer) to manufacture Active Compounds or Products and shall provide reasonable assistance to enable the effective transfer of the foregoing.  Thereafter Array will reasonably cooperate as Loxo may from time to time request to identify other parties to manufacture Active Compounds or Products.

 

ARTICLE 3

MANAGEMENT

 

3.1                               Joint Research Committee.  Promptly after the Effective Date, Loxo and Array will establish a committee (the “Joint Research Committee” or “JRC”) to oversee, review and recommend direction of the Discovery Program.  The responsibilities of the Joint Research Committee shall include, among other things: (i) monitoring and reporting research progress and ensuring open and frequent exchange between the Parties regarding Discovery Program activities; (ii)  coordination of a collaborative lead validation and optimization program to identify Active

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

9

 

Compounds; (iii) identifying the Party that will outsource certain Discovery Program activities, selecting the appropriate CRO and approving the terms of each CRO agreement; and (iv) amending as necessary the criteria for the selection of Clinical Candidates.

 

3.2                               Membership.  The JRC shall include two (2) representatives of each of Loxo and Array, each Party’s members selected by that Party.  Array and Loxo may each replace its JRC representatives at any time, upon written notice to the other Party.  From time to time, the JRC may establish subcommittees, to oversee particular projects or activities, and such subcommittees will be constituted as the JRC agrees.

 

3.3                               Meetings.  During the Discovery Program Term, the JRC shall meet at least quarterly, or as agreed by the Parties, at such locations as the Parties agree, and will otherwise communicate regularly by telephone, electronic mail, facsimile and/or video conference.  With the consent of the Parties, other representatives of Array or Loxo may attend JRC meetings as nonvoting observers.  Each Party shall be responsible for all of its own expenses associated with attendance of such meetings.  The first meeting of the JRC shall occur within thirty (30) days after the Effective Date.

 

3.4                               Minutes.  The JRC shall keep accurate minutes of its deliberations which shall record all proposed decisions and all actions recommended or taken.  The Secretary of the JRC (as appointed by the members of the JRC) shall be responsible for the preparation of draft minutes.  Draft minutes shall be sent to all members of the JRC within five (5) working days after each meeting and shall be approved, if appropriate, at the next meeting.  All records of the JRC shall at all times be available to both Array and Loxo.

 

3.5                               Decision Making.  Decisions of the JRC shall be made by majority vote.  In the event that the votes required to approve a decision cannot be reached within the JRC, then Loxo shall have the deciding vote; provided, however, that Loxo shall not have the right to cast the deciding vote in any manner that would (i) cause Array to violate any obligation or agreement it may have with any Third Party, or (ii) unilaterally impose on Array any financial obligation that is beyond the scope of Array’s obligations under this Agreement.

 

ARTICLE 4

LICENSES

 

4.1                               Commercial Licenses.

 

4.1.1                                 License to Clinical Candidates and Corresponding Products.  Subject to the terms and conditions of this Agreement, Array hereby grants to Loxo an exclusive (even as to Array) license, with the right to grant and authorize sublicenses (through multiple tiers), under the Array Technology and Array’s interest in the applicable Collaboration Technology, to make, have made, use, offer for sale, sell, import, export and otherwise exploit Active Compounds, Clinical Candidates, Lead Compounds and Products for use in the Field and in the Territory.

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

10

 

 

4.1.2                                 Marketing Rights.  Loxo shall have the exclusive right to market, sell and distribute Products in the Field and in the Territory.  In exercising such rights, Loxo may select trademarks for such Products, and Loxo shall own all right, title or interest in such trademarks (subject to any pre-existing rights of Array or Third Parties).

 

4.2                               No Implied Licenses.  Only the licenses granted pursuant to the express terms of this Agreement shall be of any legal force or effect.  No other license or rights shall be created by implication, estoppel or otherwise.

 

4.3                               Target Exclusivity.  Except to the extent required for Array to fulfill its obligations under this Agreement, with respect to each Target and Trk, for as long as Loxo (or a sublicensee or other Third Party on Loxo’s behalf) (a) has an active research and/or development program for such Target or Trk, where such program could result in Array accruing milestone payments and royalties; or (b) is commercializing a Product for such Target or Trk, Array shall not conduct, participate in, license or fund, directly or indirectly, alone or with any Affiliate or Third Party, research or development with respect to, or manufacturing or commercialization of, a product comprising a small molecule that, as a primary mechanism of action for therapeutic or prophylactic effect, binds to and modulates the activity of such Target or binds to modulates at least two of TrkA, TrkB or TrkC.  For clarity, nothing in this Section 4.3 shall be deemed to prohibit Array from researching, developing, commercializing or otherwise exploiting a molecule that selectively inhibits TrkA, TrkB or TrkC with at least [***] times the inhibitory activity that such molecule has against any other TrkA, TrkB or TrkC isoform.

 

Notwithstanding the foregoing provision of this Section 4.3, in the event of a Change of Control (as defined below) of Array, the provisions of this Section 4.3 shall not apply to any active research or development program that a portion of the surviving entity that was not Array (prior to the Change of Control) had ongoing as of immediately prior to the date of such Change of Control.  For purposes of this Section 4.3, a “Change of Control” shall mean the merger, consolidation, sale of substantially all of Array’s assets or similar transaction or series of transactions, as a result of which Array’s shareholders before such transaction or series of transactions own less than fifty percent (50%) of the total number of voting securities of the surviving entity immediately after such transaction or series of transactions.  For clarity, if as a result of any such Change of Control, Array exists as a wholly owned subsidiary of a parent, then the provisions of this Section 4.3 shall continue to apply to Array as the surviving entity, but not to such parent.  Notwithstanding the foregoing, Array (or its successor) shall not use any information or materials (including without limitation Compounds) resulting from the Discovery Program with any such pre-existing research or development program.

 

ARTICLE 5

PAYMENTS

 

5.1                               Equity.  On the Effective Date, concurrently with execution of this Agreement, Loxo shall issue Array shares of Series A-1 Preferred Stock representing [***] of Loxo’s outstanding 

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

11

 

capitalization on the Effective Date, as further provided and on the terms and conditions set forth in a Series A and A-1 Preferred Stock Purchase Agreement.

 

5.2                               Discovery Program Funding.

 

5.2.1                                 Research Phase Payment Schedule.  During the Discovery Program Term, Loxo agrees to pay Array research funding for the conduct of the Discovery Program monthly, in advance, the sum of [***].  Such payments shall cover cover (i) FTE expenses used in the Discovery Program, (ii) all incidental materials and resources for the conduct of the Discovery Program, and (iii) CMC activities directed to, and the manufacture of, clinical supply of the Trk Lead Compound and one (1) Lead Compound for one (1) Target (selected by Loxo), and if the Discovery Program Term is extended then also for one additional Lead Compound to another Target (selected by Loxo).  The initial payment shall be made before the date Array FTEs are first deployed in accordance with the Discovery Plan, and subsequent payments shall be made before the first day of each calendar month thereafter.  Beginning with the later of (a) the [***] of the Discovery Program Term, or (b) [***] after the first Lead Compound directed to Trk has been identified, payments under this Section 5.2.1 shall increase to [***].  Such payments are non-creditable and non-refundable.

 

5.2.2                                 Non-FTE Costs.  All other costs and research requirements associated with the Discovery Program that are not within the scope of the Discovery Plan shall be borne by Loxo, including the costs of GLP toxicology studies.  If the JRC specifically requests, as confirmed by Loxo in writing or in the written Discovery Plan approved by the JRC, that Array conduct and fund a research activity at an external center, Array’s out-of-pocket external costs incurred by Array in following such request shall be reimbursed at Array’s cost.  Loxo shall reimburse all non-FTE costs incurred by Array withing thirty (30) days after receipt of an invoice therefor.

 

5.2.3                                 No Withholding.  All amounts paid by Loxo to Array pursuant to this Section 5.1 shall be made without withholding for taxes or any other charge.

 

5.3                               Milestones.

 

5.3.1                                 Target Milestones.  With respect to Active Compounds directed to a Target, Loxo shall pay Array the following payments on the first achievement by Loxo or an Affiliate or a sublicensee of Loxo of the following milestone events, with such payments due within thirty (30) days after applicable event occurs.  Each payment shall be due once per Target, regardless of how many times the event may occur:

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

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Clinical and Regulatory Milestone Event
    	
 
    	
Milestone
   Payment
    	
 
    
	
1.  [***]
    	
 
    	
$
    	
[***]
    	
 
    
	
2.  [***]
    	
 
    	
$
    	
[***]
    	
 
    
	
3.  [***]
    	
 
    	
$
    	
[***]
    	
 
    
	
4.  [***]
    	
 
    	
$
    	
[***]
    	
 
    
	
5.  [***]
    	
 
    	
$
    	
[***]
    	
 
    
	
[***]
    	
 
    	
$
    	
[***]
    	
 
    
	
[***]
    	
 
    	
$
    	
[***]
    	
 
    
	
[***]
    	
 
    	
$
    	
[***]
    	
 
    
	
[***] 
    	
 
    	
$
    	
[***]
    	
 
    
	
[***]
    	
 
    	
$
    	
[***]
    	
 
    
	
[***]
    	
 
    	
$
    	
[***]
    	
 
    

 

5.3.2                                 Trk Milestones.  With respect to Active Compounds directed to Trk, Loxo shall pay Array the following payments on the achievement by Loxo or an Affiliate or a sublicensee of Loxo of the first to occur of the following milestone events, with such payments due within thirty (30) days after the applicable event occurs.  Each payment shall be due once with respect to Trk, regardless of how many times the event may occur:

 

	
Clinical and Regulatory Milestone Event
    	
 
    	
Milestone Payment
    	
 
    
	
1. [***]
    	
 
    	
$
    	
[***]
    	
 
    
	
2. [***]
    	
 
    	
$
    	
[***]
    	
 
    
	
3. [***] 
    	
 
    	
$
    	
[***]
    	
 
    
	
[***]
    	
 
    	
$
    	
[***]
    	
 
    
	
[***]
    	
 
    	
$
    	
[***]
    	
 
    
	
[***]
    	
 
    	
$
    	
[***]
    	
 
    
	
[***]
    	
 
    	
$
    	
[***]
    	
 
    
	
[***]
    	
 
    	
$
    	
[***]
    	
 
    
	
[***]
    	
 
    	
$
    	
[***]
    	
 
    
	
[***]
    	
 
    	
$
    	
[***]
    	
 
    

 

5.3.3                                 For purposes of Section 5.3.1 or 5.3.2 above:

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

13

 

(a)                                 If a subsequent numbered milestone is achieved under either, each prior numbered milestone (“prior” and “subsequent” referring to a lower number in the tables above, e.g., milestone 2 being “prior” to milestone 3), then all such prior milestones shall be deemed achieved upon achievement of the subsequent milestone.

 

(b)                                 “Initiation” of a particular clinical trial shall mean enrollment of the first patient in such trial.

 

(c)                                  “First Commercial Sale” shall mean, with respect to a Product in a particular country, the first bona fide commercial sale of such Product by or under authority of Loxo, its Affiliates or sublicensees following receipt of authorization of the relevant governmental entity to sell such Product in such country.  It is understood that the Europe milestone shall be paid upon the First Commercial Sale of a Product in any country that is a member of the European Union either (i) as of the Effective Date, or (ii) as of the date of the First Commercial Sale in such country.

 

5.4                               Earned Royalties For Products.

 

5.4.1                                 Loxo shall pay Array (a) a royalty of [***] on worldwide Net Sales of Products directed to Trk, and (b) a royalty of [***] on worldwide Net Sales of Products directed to Targets.  With respect to the royalty described in clause (b) for a Product directed to a Target, Loxo shall have the right to credit the [***] Milestone payment against royalties on sales of Products directed to such Target.  Royalties payable under this Section 5.4 shall be paid on a country-by-country basis from the date of the first commercial sale of each Product with respect to which royalty payments are due until the later of (i) the [***] anniversary of the first commercial sale of the Product in such country, and (ii) the expiration date in such country of the last to expire of any patent within the Array Technology or the Collaboration Technology that includes at least one Valid Claim covering the manufacture, use or sale of such Product in such country.  Only one royalty shall be paid to Array with respect to a particular Product subject to royalties under this Section, without regard to whether more than one issued and unexpired claim of a Patent within the Array Technology or Collaboration Technology is applicable to such Product.

 

5.4.2                                 If it becomes necessary for Loxo, its Affiliates or sublicensees to obtain a license under a valid, issued patent of a Third Party, where such patent covers the composition, use or all practical methods of synthesis of an Active Compound comprising a Product, and such patent would necessarily be infringed by the development or sale of such Product (but not, for example, by reason of its formulation or method of manufacture except as noted above), and (ii) Loxo, its Affiliates or sublicensees must pay such Third Party for such license a royalty on sales of such Product, then Loxo shall have the right to credit [***] of such Third Party royalty payments against the royalties owing to Array under Section 5.4.1 with respect to sales of such Product; provided, however, that Loxo shall not reduce the amount of the royalties paid to Array under Section 5.4.1 by reason of this Section, after giving effect to any other adjustment or credit under this Agreement, to less than [***] of the royalties that would otherwise be due under Section 5.4.1.  Such credit shall not be available in any country

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

14

 

in the event the patents of such Third Party for which such obligations have been incurred are held invalid or unenforceable in such country.

 

5.4.3                                 If competition occurs in any country or countries between a Product being marketed and sold under this Agreement by Loxo, its Affiliates or sublicensees and any Generic Product (as defined below) being marketed and sold by any Third Party (other than a Loxo Affiliate or sublicensee), and for so long as such Generic Product is being marketed and sold in such country or countries of the Territory, and sales of such Generic Product equal at least [***] of the total combined sales of such Generic Product and the Product in the particular country in any calendar year, the royalty rates payable by Loxo to Array under this Section 5.4 in respect of such country or countries shall be reduced by [***].  Loxo shall give Array written notice of such competition with suitable and reasonable supporting documentation.  Any reduction in the payment due from Loxo as a result of such Third Party competition shall apply from the date of notice by Loxo to Array of such competition and shall be available to Loxo only for so long as the circumstances and conditions described above continue to exist, and shall only apply to royalties due on Net Sales of the particular Product in the particular country.  A “Generic Product” shall mean a true generic product, i.e., a non-proprietary product containing the Compound being sold hereunder in such country or countries and that: (a) is substantially identical to the Product; (b) obtained marketing approval solely by means of an Abbreviated New Drug Application filing or a similar procedure for establishing equivalence to such Product that does not require clinical testing; and (c) is legally marketed in such country by an entity other than Loxo, its Affiliates or its sublicensees.

 

It is understood that, if Net Sales of a Product in a country are affected by sales of a Generic Product, Array will be negatively impacted by lower royalties due to lower Net Sales.  Consequently, the Parties acknowledge that Sections 5.4.3 is intended only to avoid a disproportionate hardship on Loxo in the event described herein.  Accordingly, the royalties due to Array with respect to Net Sales of a Product in a particular country shall only be reduced if Net Sales and gross margins of such Product in such country have been substantially impaired by reason of sales of a Generic Product in such country, and the royalties due to Array under Section 5.4.1 would create an unfair economic balance between Loxo and Array with respect to the further commercialization of such Licensed Product in such country without a reduction under this Section 5.4.3.  Accordingly, (i) before any reduction of royalties under this Section 5.4.3 shall take effect, Loxo shall consult with Array as to measures that can reasonably be taken to avoid the impairment of such Net Sales or margins in such country, and (ii) reduction of royalties under this Section 5.4.3 shall continue only if Loxo reasonably initiates and continues to progress such measures to avoid impairment; and (iii) any reduction of royalties under this Section 5.4.3 shall continue only if Loxo continues to pursue all reasonably available legal measures that could prevent or mitigate Generic Product sales or impairment, including the enforcement of any Patents that could cover the manufacture, sale, use or importation of a Generic Product, directly or indirectly, and the enforcement of any applicable law or regulation that could affect the sales of such Generic Product.

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

15

 

 

ARTICLE 6

PAYMENTS; RECORDS

 

6.1          Payment Method.  All payments due under this Agreement shall be made from a bank located in the United States by bank wire transfer in immediately available funds to a bank account designated by Array.  All payments hereunder shall be made in U.S. dollars.  In the event that the due date of any payment subject to Article 5 hereof is a Saturday, Sunday or national holiday, such payment may be paid on the following business day.  Any payments that are not paid on the date such payments are due under this Agreement shall bear interest to the extent permitted by applicable law at the prime rate as reported by the Wall Street Journal on the date such payment is due, plus an additional [***], calculated on the number of days such payment is delinquent.

 

6.2          Taxes.  If laws or regulations require that taxes be withheld from any amounts payable hereunder, Loxo will:  (a) deduct those taxes from the otherwise remittable payment; (b) timely pay the taxes to the proper taxing authority; and (c) notify Array and promptly furnish Array with copies of any documentation evidencing such withholding.

 

6.3          Royalty Payments and  Reports.  Royalty payments under this Agreement with respect to Net Sales of Product in a given calendar quarter shall be made to the Array or its designee quarterly within sixty (60) days following the applicable calendar quarter.  Each royalty payment shall be accompanied by a report detailing, on a country-by-country basis for all Net Sales of Product by or under authority of the Loxo during the relevant three (3) month period: (i) units of Product sold, (ii) gross sales of the Product, (iii) calculation of the Net Sales (and deductions utilized in determining Net Sales), and (iv) all other calculations made in determining the applicable royalties payable on such Net Sales.

 

6.4          Books and Records; Accounting and Audits.  Loxo shall maintain complete and accurate books and records, in accordance with GAAP, which are relevant to, as applicable, the calculation of Net Sales and royalty payments owing hereunder.  Array shall maintain complete and accurate books and records, in accordanc with GAAP, which are relevant to, as applicable, all costs or expenses to be reimbursed by Loxo under this Agreement, which books and records shall be sufficient in detail to verify all reimbursed amounts hereunder.  A Party (the “Auditing Party”) shall have the right, at its own expense and not more than once in any calendar year during the Term of this Agreement, to have an independent, certified public accountant, selected by the Auditing Party, and under an obligation of confidence, audit the books and records of the other Party (the “Audited Party”) in the location(s) where such books and records are maintained upon reasonable notice (which shall be no less than fifteen (15) business days prior written notice) and during regular business hours, and for the sole purpose of verifying the basis and accuracy of the payments required and made under this Agreement or the work completed and amounts to be reimbursed, as applicable.  The report and communication of such accountant with respect to such an audit shall be limited to a certificate stating whether any, as applicable, report made or reimbursement or other payment submitted during such period is accurate or inaccurate and, if a discrepancy is identified, shall also indicate the amount and if applicable, with respect to any report, the nature, of any discrepancy, and the correct information (with respect to the applicable period).  Such accountant shall provide Array

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

16

 

and Loxo with a copy of each such report simultaneously.  Should the audit lead to the discovery of a discrepancy: (i) to the Auditing Party’s detriment, the Audited Party shall pay to the Auditing Party the amount of the discrepancy within thirty (30) days of the Audited Party’s receipt of the report; or (ii) to the Audited Party’s detriment, the Audited Party may, as applicable, credit the amount of the discrepancy against future payments payable to the Auditing Party under this Agreement, and if there are no such payments payable, then the Auditing Party shall pay to the Audited Party the amount of the discrepancy within thirty (30) days of the Auditing Party’s receipt of the report.  Additionally, in the event that the discrepancy is to the Auditing Party’s detriment and is greater than [***] of the amount due for such audited period, then the Audited Party shall pay or reimburse the reasonable cost charged by such accountant for such audit.  Once the Auditing Party has conducted an audit permitted by this Section 6.4 in respect of any period, it may not re-inspect the Audited Party’s books and records in respect of such period, unless a subsequent audit of a separate reporting period uncovers fraud on the part of the Audited Party that is reasonably expected to have been occurring during the prior audited period.  For clarity, however, if a discrepancy is identified by the accountant during the course of an audit and the Parties do not agree upon a resolution of such discrepancy, then the Auditing Party’s accountant may re-inspect the books and records to the extent reasonably relevant to resolving such discrepancy.  Notwithstanding anything herein to the contrary, upon the expiration of three (3) years following the end of any calendar year, the right to audit, the books and records for such calendar year shall expire and such Party shall be released from any liability or accountability with respect to payments or FTE work performed as reflected in such books of such Party for such calendar year (including, for clarity, with respect to the calculation of royalties payable with respect to each such calendar year).  The Parties shall no longer be required to retain such books and records for any calendar year after the expiration of the third (3rd) calendar year following such calendar year.

 

6.5          Blocked Currency.  If at any time legal restrictions in the Territory prevent the prompt remittance of any payments with respect to sales therein, Loxo shall have the right and option to make such payments by depositing the amount thereof in local currency to Array account in a bank or depository in the Territory.

 

6.6          Confidentiality.  Each Party shall treat all financial information of the other Party that is subject to review under this Article 6 of this Agreement (including all royalty reports) as such other Party’s Confidential Information.

 

ARTICLE 7

DUE DILIGENCE

 

Loxo shall use diligent efforts to develop and seek marketing approval in the U.S., France, Germany, Italy, Spain, the United Kingdom or Japan for a Product and following receipt of such approval to commercialize such Product in the U.S. France, Germany, Italy, Spain, the United Kingdom or Japan, consistent with the practice of Loxo in pursuing the research, development, commercialization, and marketing of pharmaceutical products of its own development and of similar commercial value potential.

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

17

 

ARTICLE 8

INTELLECTUAL PROPERTY

 

8.1          Ownership of Inventions; Disclosure.

 

8.1.1           Ownership.  Title to all inventions and other intellectual property made by employees of Array in the course of performing, or in connection with, the Discovery Program shall be owned by Array; title to all inventions and other intellectual property made by employees of Loxo in the course of performing, or in connection with, the Discovery Program shall be owned by Loxo; title to all inventions and other intellectual property made jointly by employees of Loxo and Array in the course of performing, or in connection with, the Discovery Program shall be owned jointly by Loxo and Array.  Inventorship of inventions and other intellectual property made pursuant to this Agreement shall be determined in accordance with the patent laws of the United States.  Except as expressly provided in this Agreement, neither Party shall have any obligation to account to the other for profits, or to obtain any approval of the other Party to license or exploit patented jointly-owned subject matter, by reason of joint ownership thereof, and each Party hereby waives any right it may have under the laws of any jurisdiction to require any such consent or accounting.

 

8.1.2           Disclosure of Inventions.  Each Party shall promptly disclose to the other any inventions made in connection with this Agreement.

 

8.2          Patent Prosecution.

 

8.2.1           Collaboration Patents and Trk Patents.  Loxo shall be responsible, at its expense, and shall have the exclusive right for (i) preparing, filing, prosecuting and maintaining (a) patent applications and patents directed to Collaboration Technology comprising Active Compounds and/or Clinical Candidates, pharmaceutical compositions containing an Active Compound and/or a Clinical Candidate, and methods of using any of the foregoing, and (b) patent applications and patents listed in Exhibit A (the “Trk Patents”), and (ii) for conducting any interferences, re-examinations, reissues and oppositions relating thereto.  Loxo may elect, at its sole discretion, to discontinue prosecution of any such patent applications and/or not to file or conduct any further activities with respect to such patent applications or patents.  Loxo shall keep Array reasonably informed with respect to (i) the issuance of patents filed by Loxo pursuant to this Section 8.2.1 and (ii) the abandonment of any patent or patent application maintained by Loxo pursuant to this Section 8.2.1.  Without limiting the foregoing, Loxo will will (i) provide Array with copies of and an opportunity to review and comment upon the text of the applications relating to the Trk Patents at least thirty (30) days before filing, except for urgent responses in which case Loxo will provide a reasonable amount of time based on the circumstance; (ii) provide Array with a copy of each submission made to and document received from a patent authority, court or other tribunal regarding any Trk Patent reasonably promptly after making such filing or receiving such document, including a copy of each application for each Trk Patent as filed together with notice of its filing date and application number; (iii) keep Array advised of the status of all

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

18

 

material communications, actual and prospective filings or submissions regarding the Trk Patents, and will give Array copies of and an opportunity to review and comment on any such material communications, filings and submissions proposed to be sent to any patent authority or judicial body; and (iv) consider in good faith Array’s comments on the communications, filings and submissions for the Trk Patents.

 

8.2.2           Other Technology.  Except as provided in Section 8.2.1, each Party shall be responsible, at its own expense and in its sole discretion, for preparing, filing, prosecuting and maintaining, in such countries as it deems appropriate, any and all patent applications and patents directed to inventions owned or controlled by such Party and conducting any interferences, re-examinations, reissues and oppositions relating to such patent applications and patents.

 

8.2.3           Cooperation.  Array shall reasonably cooperate with and assist Loxo in connection with the activities of Loxo under Section 8.2.1 upon the reasonable request of Loxo, including without limitation by making scientists and scientific records reasonably available to Loxo and the execution of all such documents and instruments and the performance of such acts as may be reasonably necessary in order to permit Loxo to continue any filing, prosecution, maintenance or extension of such patents and patent applications.  Loxo shall reimburse Array for Array’s out of pocket expenses incurred in connection with this Section 8.2.3.

 

8.3          Enforcement and Defense.

 

8.3.1           Notice.  Each Party shall promptly notify the other of any knowledge it acquires of any potential infringement of the Collaboration Technology or the Array Technology with respect to a compound directed to a Target or Trk, in each case by a Third Party.

 

8.3.2           If (i) any patent within the Collaboration Technology or a Trk Patent is infringed by a Third Party in any country in the Territory in connection with the manufacture, use, sale, offer for sale or importation of a product the same as or substantially similar to an Active Compound or a compound that is directed against a Target or Trk in the Field in such country, or (ii) any patent within the Array Technology other than a Trk Patent is infringed by a Third Party in any country in the Territory in connection with the manufacture, use, sale, offer for sale or importation of a product the same as or substantially similar to an Active Compound contained in a Product, then Loxo shall have the primary right, but not the obligation, to institute, prosecute, and control any action or proceeding with respect to such infringement of such Patent, by counsel of its own choice, and Array shall have the right, at its own expense, to be represented in that action by counsel of its own choice.  If Loxo fails to bring an action or proceeding within a period of one hundred twenty (120) days after a request by Array to do so, Array shall have the right to bring and control any such action by counsel of its own choice, and Loxo shall have the right to be represented in any such action by counsel of its own choice at its own expense.

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

19

 

8.3.3           If one Party brings an action or proceeding in accordance with Section 8.3.2, the second Party agrees to be joined as a party plaintiff if necessary and to give the first Party reasonable assistance and authority to file and prosecute the suit.  The costs and expenses of the Party bringing suit under this Section shall be borne by such Party, and any damages or other monetary awards recovered shall be shared as follows: The amount of such recovery actually received by the Party controlling such action shall first be applied to the out-of-pocket costs of such action by both Parties, and then (i) if Loxo is the Party that brings such action or proceeding, then Array shall be paid an amount equal to the royalties, if any, that would have been due upon sales of the infringing product as if such infringing sales had been Net Sales of a Product sold by or under the authority of Loxo, and the remaining portion of such recovery shall be paid to Loxo, or (ii) if Array is the Party that brings such action or proceeding, then the remaining portion of such recovery shall be shared as follows: Loxo shall receive 20% and Array shall retain 80%.  A settlement or consent judgment or other voluntary final disposition of a suit under this Section 8.3 may be entered into without the consent of the Party not bringing the suit.  Neither Party shall, however, have the right to enter into any settlement or consent to any claim to the effect that the patent protection offered under any part of the Collaboration Technology would be materially negatively affected, without the consent of the other Party, such consent not to be unreasonably withheld.

 

8.3.4           For any other infringement or declaratory judgment actions relating to Collaboration Technology falling outside of the application of Section 8.3.2, (i) Loxo shall have the sole right, but not the obligation, to take reasonable legal action relating to any patent filed by Loxo pursuant to Section or 8.2.2, at its sole cost and expense, and (ii) Array shall have the sole right, but not the obligation, to take reasonable legal action relating to any patent filed by Array pursuant to Section 8.2.2, at its sole cost and expense.  Each Party agrees to render such reasonable assistance as the enforcing Party may request, at the enforcing Party’s expense, with respect to actions brought pursuant to this Section 8.3.4.  The costs in bringing any such action shall be paid by, and all recoveries therefrom belong to, the Party bringing such action.

 

ARTICLE 9

CONFIDENTIALITY

 

9.1          Confidential Information.  Except as otherwise expressly provided herein, the Parties agree that, for the term of this Agreement and for ten (10) years thereafter, the receiving Party shall not, except as expressly provided in this Article 9, disclose to any Third Party any Confidential Information furnished to it by the disclosing Party hereto pursuant to this Agreement, or any results of the Discovery Program (“Results”).  For purposes of this Agreement, “Confidential Information” shall mean any information, samples or other materials, which if disclosed in tangible form is marked “confidential” or with other similar designation to indicate its confidential or proprietary nature, or, if disclosed orally, is indicated orally to be confidential or proprietary at the time of such disclosure and is confirmed in writing as confidential or proprietary within forty-five (45) days after

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

20

 

such disclosure.  Notwithstanding the foregoing, Confidential Information shall not include any information that can be established by the receiving Party by competent proof that such information:

 

(a)           was already known to the receiving Party, other than under an obligation of confidentiality, at the time of disclosure;

 

(b)           was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party;

 

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

 

(d)           was independently developed by the receiving Party as demonstrated by documented evidence prepared contemporaneously with such independent development; or

 

(e)           was disclosed to the receiving Party, other than under an obligation of confidentiality, by a Third Party who had no obligation to the disclosing Party not to disclose such information to others.

 

Notwithstanding anything to the contrary in this Section 9.1, and for the purposes of clarity, the identity of the Targets and the results of the Discovery Program specifically related to Active Compounds, Clinical Candidates, Lead Compounds and Products shall be deemed Confidential Information of Loxo.  The identity of the Targets and such Discovery Program results may not be disclosed by Array to any Third Party for so long as the identity of such Target or such results remains Confidential Information.

 

9.2          Permitted Use and Disclosures.  Each Party hereto may use or disclose Confidential Information disclosed to it by the other Party or Results to the extent such use or disclosure is reasonably necessary and permitted in the exercise of the rights granted hereunder (including without limitation Loxo’s development and commercialization of Products) and in filing or prosecuting patent applications, prosecuting or defending litigation, complying with applicable governmental laws, regulations or court order or otherwise submitting information to tax or other governmental authorities, conducting clinical trials, or making a permitted sublicense or otherwise exercising license rights expressly granted by the other Party to it pursuant to the terms of this Agreement, provided that if a Party is required by governmental authority to make any such disclosure, other than pursuant to a confidentiality agreement, it will give reasonable advance notice to the other Party of such disclosure and, save to the extent inappropriate in the case of patent applications, will use its reasonable efforts to secure confidential treatment of such information in consultation with the other Party prior to its disclosure (whether through protective orders or otherwise) and disclose only the minimum necessary to comply with such requirements.

 

9.3          Termination of Prior Agreement.  This Agreement supersedes the Confidentiality Agreement between the Parties dated March 26, 2013.  All information exchanged between the

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

21

 

Parties under that the Confidentiality Agreement shall be deemed Confidential Information and shall be subject to the terms of this Article 9.

 

9.4          Nondisclosure of Terms.  Each of the Parties hereto agrees not to disclose the terms of this Agreement to any Third Party without the prior written consent of the other Party hereto, which consent shall not be unreasonably withheld, except to such Party’s attorneys, advisors, investors, potential investors and other similarly situated Third Parties, and in the case of Loxo to actual or prospective collaborators or licensees, in each case on a need to know basis under circumstances that reasonably ensure the confidentiality thereof, or to the extent required by law.

 

9.5          Publications.  Each Party shall submit any proposed publication containing Confidential Information to the other Party at least thirty (30) days in advance to allow that Party to review such planned public disclosure.  The reviewing Party will promptly review such proposed publication and make any objections that it may have to the publication of Confidential Information of the reviewing Party contained therein.  Should the reviewing Party make an objection to the publication of any such Confidential Information, then the Parties shall discuss the advantages and disadvantages of publishing such Confidential Information.  If the Parties are unable to agree on whether to publish the same, the respective Chief Executive Officers of Array and Loxo shall reasonably agree on the extent to which the publication of such Confidential Information shall be made.

 

ARTICLE 10

REPRESENTATIONS AND WARRANTIES

 

10.1        Loxo.  Loxo represents and warrants that:  (i) it has the legal power, authority and right to enter into this Agreement and to fully perform all of its obligations hereunder; (ii) this Agreement is a legal and valid obligation binding upon it and enforceable in accordance with its terms; (iii) the performance of its obligations hereunder do not conflict with, violate or breach or constitute a default or require any consent under, any contractual obligations of Loxo; and (iv) as of the Effective Date there is no claim or demand of any Third Party pertaining to, or any proceeding that is pending or, to the knowledge of Loxo, threatened, that challenges the rights of Loxo to use the Targets or to conduct the Discovery Program.

 

10.2        Array.  Array represents and warrants that:  (i) it has the legal power, authority and right to enter into this Agreement and to fully perform all of its obligations hereunder; (ii) this Agreement is a legal and valid obligation binding upon it and enforceable in accordance with its terms; (iii) the performance of its obligations and the grant of rights hereunder do not conflict with, violate or breach or constitute a default or require any consent under, any contractual obligations of Array; (iv) as of the Effective Date, other than those it has disclosed to Loxo in writing, Array is not aware of any Third Party patent, patent applicaton or other intellectual property rights that would be infringed by the making, using, selling, offering for sale or importing any of the existing Active Compounds to Trk or by the practice of the methods and processes (or results thereof) to be used by Array in connection with the Development Program; (v) as of the Effective Date, all Array

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

22

 

 

Technology owned by Array necessary to to make, have made, use, offer for sale, sell, import, export and otherwise exploit Active Compounds, Clinical Candidates, Lead Compounds and Products for use in the Field and in the Territory is Controlled by Array, and (vi) Exhibit C fully and correctly identifies all chemical entities that Array made and tested against Trk in the course of Array’s pan-Trk program prior the Effective Date.

 

10.3                        Disclaimer.  Loxo and Array specifically disclaim any guarantee that the Discovery Program will be successful, in whole or in part.  Provided that the Parties perform their obligations under this Agreement and the Discovery Plan, the failure of the Parties to successfully develop, Active Compounds, Clinical Candidates and/or Products will not constitute a breach of any representation or warranty or other obligation under this Agreement.  EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, ARRAY AND LOXO MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OR CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE ARRAY TECHNOLOGY, COLLABORATION TECHNOLOGY, LIBRARY COMPOUNDS, ACTIVE COMPOUNDS, CLINICAL CANDIDATES, INFORMATION DISCLOSED HEREUNDER OR PRODUCTS INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF ANY COLLABORATION TECHNOLOGY, PATENTED OR UNPATENTED, OR NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

 

ARTICLE 11
 INDEMNIFICATION

 

11.1                        Loxo.  Loxo agrees to indemnify, defend and hold Array and its Affiliates and their respective directors, officers, employees, agents and their respective successors, heirs and assigns (the “Array Indemnitees”) harmless from and against any losses, costs, claims, damages, liabilities or expense (including reasonable attorneys’ and professional fees and other expenses of litigation) (collectively, “Liabilities”) arising, directly or indirectly out of or in connection with Third Party claims, suits, actions, demands or judgments, relating to (i) personal injury or death resulting from any Active Compound, Clinical Candidates or Product developed, manufactured, used, sold or otherwise distributed by or on behalf of Loxo, its Affiliates, sublicensees or other designees; and (ii) any breach by Loxo of the representations and warranties made in this Agreement, except, in each case, to the extent such Liabilities result from the gross negligence or intentional misconduct of Array.

 

11.2                        Array.  Array agrees to indemnify, defend and hold Loxo and its Affiliates and their respective directors, officers, employees, agents and their respective successors, heirs and assigns (the “Loxo Indemnitees”) harmless from and against any losses, costs, claims, damages, liabilities or expense (including reasonable attorneys’ and professional fees and other expenses of litigation) (collectively, “Liabilities”) arising, directly or indirectly out of or in connection with Third Party claims, suits, actions, demands or judgments, relating to any breach by Array of its representations 

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

23

 

and warranties made in this Agreement, except to the extent such Liabilities result from the gross negligence or intentional misconduct of Loxo.

 

11.3                        Indemnification Procedure.  A Party that intends to claim indemnification (the “Indemnitee”) under this Article 11 shall promptly notify the other Party (the “Indemnitor”) in writing of any claim, complaint, suit, proceeding or cause of action with respect to which the Indemnitee intends to claim such indemnification (for purposes of this Section 11.3, each a “Claim”), and the Indemnitor shall have sole control of the defense and/or settlement thereof; provided that the Indemnitee shall have the right to participate, at its own expense, with counsel of its own choosing in the defense and/or settlement of such Claim.  The indemnification obligations of the Parties under this Article 11 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the consent of the Indemnitor, which consent shall not be withheld or delayed unreasonably.  The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any such Claim, if prejudicial to its ability to defend such action, shall relieve such Indemnitor of any liability to the Indemnitee under this Article 11, but the omission so to deliver written notice to the Indemnitor shall not relieve the Indemnitor of any liability to any Indemnitee otherwise than under this Article 11.  The Indemnitee under this Article 11, and its employees, at the Indemnitor’s request and expense, shall provide full information and reasonable assistance to Indemnitor and its legal representatives with respect to such Claims covered by this indemnification.  It is understood that only Loxo or its permitted assignee may claim indemnity under this Article 11 (on its own behalf or on behalf of a Loxo Indemnitee), and other Loxo Indemnitees may not directly claim indemnity hereunder.  Likewise, it is understood that only Array may claim indemnity under this Article 11 (on its own behalf or on behalf of an Array Indemnitee), and other Array Indemnitees may not directly claim indemnity hereunder.

 

ARTICLE 12
 TERM AND TERMINATION

 

12.1                        Term.  Unless earlier terminated, the Agreement will continue in full force and effect, on a Product-by-Product and country-by-country basis until the date no further payments are due under Article 5 above.  Following the expiration of this Agreement Loxo shall have a perpetual, fully paid-up, non-exclusive license under the Array Technology and Collaboration Technology to conduct research and to develop, make, have made, use, sell, offer for sale and import Products in the Territory for use in the Field.

 

12.2                        Termination for Breach.  Subject to the provisions of this Section 12.2, either Party may terminate the Discovery Program and this Agreement in the event the other Party hereto shall have materially breached or defaulted in the performance of any of its material obligations hereunder, and such default shall have continued for sixty (60) days after written notice thereof was provided to the breaching party by the non-breaching party.  Any termination shall become effective at the end of such sixty (60) day period unless the breaching party has cured any such breach or default prior to the expiration of the sixty (60) day period.  Provided that Loxo is reasonably able to pay its debts as they are due, Array shall not have the right to terminate this Agreement after the 

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

24

 

Discovery Program Term but shall have the right to seek monetary damages (but not termination) for any breach of this Agreement by Loxo.

 

12.3                        Failure to Issue Stock.  If, within one (1) month after the Effective Date, Loxo does not close the transaction and issue the shares specified in Section 5.1 above, then Array may terminate this Agreement, immediately upon notice.

 

12.4                        Termination upon Notice.

 

12.4.1                                      Loxo Notice.  Loxo may terminate this Agreement upon six (6) months written notice to Array, provided that such notice is given after the date that is one (1) year after the Effective Date.

 

12.4.2                                      Program-by-Program.  In addition, Loxo may terminate the Discovery Program with respect to either Trk or a Target (an “Abandoned Target”) by so notifying Array, which termination shall be effective six (6) months after the date of such notice; provided that such notice is given after the date that is one (1) year after the Effective Date.  If, as a result of such termination, all Targets and Trk would become Abandoned Targets, then such termination shall be deemed a termination of this Agreement in its entirety under Section 12.4.1 above.  With respect to each Abandoned Target:

 

(a)                                 Array’s obligations to conduct further activities under the Development Program with respect to such Abandoned Target shall terminate as of the effective date of such termination; and

 

(b)                                 all licenses and rights to Loxo under Section 4.1 for Active Compounds and Products directed to the Abandoned Target (i.e., Trk or the Target) shall concurrently terminate, and Loxo and its Affiliates and sublicensees shall immediately cease all manufacture, development and commercialization of Active Compounds and Products directed to such Abandoned Target; and

 

(c)                                  subject to the terms and conditions of this Section 12.4.2(c), Array shall have (and Loxo agrees to grant and hereby grants to Array) an irrevocable, exclusive, worldwide license, with the right to grant and authorize sublicenses, under Loxo’s interest in the Collaboration Technology, including the Collaboration Technology Patents, to make, have made, use, sell, offer to sell and import Active Compounds and Products directed to such Abandoned Target; and

 

(d)                                 Array shall have the sole right to prosecute and maintain, and to enforce, all Collaboration Technology Patents to the extent claiming Active Compounds to such Abandoned Target.

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

25

 

12.5                        Effect of Breach or Termination.

 

12.5.1                          Accrued Rights and Obligations.  Termination of this Agreement for any reason shall not release either Party hereto from any liability which, at the time of such termination, has already accrued to the other Party or which is attributable to a period prior to such termination nor preclude either Party from pursuing any rights and remedies it may have hereunder or at law or in equity with respect to any breach of this Agreement.

 

12.5.2                          Return of Materials.  Upon any termination of this Agreement, Loxo and Array shall promptly return to the other all Confidential Information (including, without limitation, all Know-How) received from the other Party, except one copy of which may be retained for archival purposes.

 

12.5.3                          Effect of Termination by Loxo Without Cause.  If Loxo terminates this Agreement without cause pursuant to Section 12.4.1, then:

 

(a)                                 all licenses and rights to Loxo under Section 4.1 shall concurrently terminate; and

 

(b)                                 subject to the terms and conditions of this Section 12.5.3(b), Array shall have (and Loxo agrees to grant and hereby grants to Array) an irrevocable, exclusive, worldwide license, with the right to grant and authorize sublicenses, under Loxo’s interest in the Collaboration Technology, including the Collaboration Technology Patents, to make, have made, use, sell, offer to sell and import Active Compounds and Products; and

 

(c)                                  Array shall have the sole right to prosecute and maintain, and to enforce, all Collaboration Technology Patents.

 

12.5.4                          Effect of Termination by Loxo With Cause.  If Loxo terminates this Agreement with cause pursuant to Section 12.2, then:

 

(a)                                 the licenses and rights to Loxo under Section 4.1 shall continue; and

 

(b)                                 Loxo’s milestones and royalty obligations under Sections 5.3 and 5.3.3(a) shall continue; and

 

(c)                                  Loxo shall continue to have the sole right to prosecute and maintain, and to enforce, the Collaboration Patents and Array Patents as set forth in Sections 8.2 and 8.3.

 

12.6                        Survival Sections.  Sections 4.2, 8.1.1, 12.5 and 12.6 and Articles 1, 6, 9, 11 and 13 shall survive the expiration or termination of this Agreement for any reason.

 

12.7                        Termination Not Sole Remedy.  Termination is not the sole remedy under this Agreement and, whether or not termination is effected, all other remedies will remain available except as agreed to otherwise herein.

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

26

 

ARTICLE 13
 MISCELLANEOUS

 

13.1                        Governing Laws.  This Agreement and any dispute arising from the construction, performance or breach hereof shall be governed by and construed, and enforced in accordance with, the laws of the state of New York, without reference to conflicts of laws principles.

 

13.2                        Waiver.  It is agreed that no waiver by either Party hereto of any breach or default of any of the covenants or agreements herein set forth shall be deemed a waiver as to any subsequent and/or similar breach or default.

 

13.3                        Assignment.  This Agreement shall not be assignable by either Party to any Third Party hereto without the written consent of the other Party hereto, and any attempted assignment shall be null and void.  Notwithstanding the foregoing, either Party may assign this Agreement, without such consent, to an entity that acquires all or substantially all of the business or assets of such Party to which this Agreement pertains, whether by merger, reorganization, acquisition, sale, or otherwise; provided, however, that within thirty (30) days of such an assignment, the assignee shall agree in writing to be bound by the terms and conditions of this Agreement.  This Agreement shall be binding upon and accrue to the benefit any permitted assignee, and any such assignee shall agree to perform the obligations of the assignor.

 

13.4                        Independent Contractors.  The relationship of the Parties hereto is that of independent contractors.  The Parties hereto are not deemed to be agents, partners or joint venturers of the others for any purpose as a result of this Agreement or the transactions contemplated thereby.

 

13.5                        Compliance with Laws.  In exercising their rights under this license, the Parties shall fully comply in all material respects with the requirements of any and all applicable laws, regulations, rules and orders of any governmental body having jurisdiction over the exercise of rights under this license including, without limitation, those applicable to the discovery, development, manufacture, distribution, import and export and sale of Products pursuant to this Agreement.

 

13.6                        Notices.  All notices, requests and other communications hereunder shall be in writing and shall be personally delivered or by registered or certified mail, return receipt requested, postage prepaid, in each case to the respective address specified below, or such other address as may be specified in writing to the other Parties hereto and shall be deemed to have been given upon receipt:

 

If to Loxo:                                                                                                                                    Loxo Oncology, Inc.

c/o Aisling Capital

888 7th Avenue, 30th Floor

New York, New York 10106

Attention:  Chief Executive Officer

Facsimile:  (212) 651-6379

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

27

 

If to Array:                                                                                                                                  Array BioPharma Inc.

3200 Walnut Street

Boulder, CO  80301

Attention:  Chief Operating Officer

Facsimile:  (303) 381-6697

 

With a copy to:                                                                                                            Array BioPharma Corporation

3200 Walnut Street

Boulder, CO  80301

Attention:  General Counsel

Facsimile:  (303) 386-1290

 

13.7                        Severability.  Each Party hereby agrees that it does not intend to violate any public policy, statutory or common laws, rules, regulations, 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 case such valid provisions cannot be agreed upon, the invalidity of one or several provisions of its 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.  In the event a Party seeks to avoid a material provision of this Agreement upon an assertion that such provision is invalid, illegal or otherwise unenforceable, the other Party shall have the right to terminate this Agreement upon sixty (60) days prior written notice to the asserting Party, unless such assertion is eliminated and cured within such sixty (60) day period.  Such a termination shall be deemed a termination by such Party for breach pursuant to Section 12.2.

 

13.8                        Advice of Counsel.  Array and Loxo have each consulted counsel of their choice regarding this Agreement, and each acknowledges and agrees that this Agreement shall not be deemed to have been drafted by one Party or another and will be construed accordingly.

 

13.9                        Performance Warranty.  Each Party hereby warrants and guarantees the performance of any and all rights and obligations of this Agreement by its Affiliates and sublicensees.

 

13.10                 Force Majeure.  Neither Party shall lose any rights hereunder or be liable to the other Party for damages or losses (except for payment obligations) on account of failure of performance by the defaulting Party if the failure is occasioned by war, strike, fire, Act of God, earthquake, flood, lockout, embargo, governmental acts or orders or restrictions, failure of suppliers, or any other reason where failure to perform is beyond the reasonable control and not caused by the negligence, intentional conduct or misconduct of the non-performing Party and such Party has exerted all 

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

28

 

reasonable efforts to avoid or remedy such force majeure; provided, however, that in no event shall a Party be required to settle any labor dispute or disturbance.

 

13.11                 Complete Agreement.  This Agreement with its Exhibits, constitutes the entire agreement, both written and oral, between the Parties with respect to the subject matter hereof, and all prior agreements respecting the subject matter hereof, either written or oral, express or implied, shall be abrogated, canceled, and are null and void and of no effect.  No amendment or change hereof or addition hereto shall be effective or binding on either of the Parties hereto unless reduced to writing and executed by the respective duly authorized representatives of Array and Loxo.

 

13.12                 Consultation.  If an unresolved dispute arises out of or relates to this Agreement, or the breach thereof, either Party may refer such dispute to the Chief Executive Officer of Loxo and the Chief Executive Officer of Array, who shall meet in person or by telephone within forty-five (45) days after such referral to attempt in good faith to resolve such dispute.

 

13.13                 Headings.  The captions to the several Sections hereof are not a part of this Agreement, but are included merely for convenience of reference and shall not affect its meaning or interpretation.

 

13.14                 Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same agreement.

 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed by their authorized representatives and delivered in duplicate originals as of the Effective Date.

 

	
LOXO ONCOLOGY, INC.
    	
 
    	
ARRAY BIOPHARMA INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Joshua H. Bilenker
    	
 
    	
By:
    	
/s/ Ron Squarer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Joshua H. Bilenker
    	
 
    	
Name:
    	
Ron Squarer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
CEO
    	
 
    	
Title: 
    	
CEO
    

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

29

 

EXHIBIT A

 

Trk Patents

 

	
Array Matter No.
    	
 
    	
Country
    	
 
    	
Appln. No./
   Publication No./
   Patent No.
    	
 
    	
Status
    
	
[***]
    	
 
    	
United States
    	
 
    	
[***]
    	
 
    	
Expired
    
	
[***]
    	
 
    	
PCT
    	
 
    	
[***]
    	
 
    	
Expired
    
	
[***]
    	
 
    	
Canada
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
China
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Europe
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
India
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Japan
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
United Sates
    	
 
    	
[***]
    	
 
    	
Issued
    
	
[***]
    	
 
    	
United Sates
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Taiwan
    	
 
    	
[***]
    	
 
    	
Pending
    

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

30

 

	
Array Matter No.
    	
 
    	
Country
    	
 
    	
Appln. No./
   Publication No./
   Patent No.
    	
 
    	
Status
    
	
[***]
    	
 
    	
United States
    	
 
    	
[***]
    	
 
    	
Expired
    
	
[***]
    	
 
    	
PCT
    	
 
    	
[***]
    	
 
    	
Expired
    
	
[***]
    	
 
    	
Argentina
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Australia
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Brazil
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Canada
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Chile
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
China
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Colombia
    	
 
    	
[***]
    	
 
    	
Issued
    
	
[***]
    	
 
    	
Costa Rica
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Egypt
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Europe
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Gulf Cooperation
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Hong Kong
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Indonesia
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Israel
    	
 
    	
[***]
    	
 
    	
Pending
    

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

31

 

	
Array Matter No.
    	
 
    	
Country
    	
 
    	
Appln. No./
   Publication No./
   Patent No.
    	
 
    	
Status
    
	
[***]
    	
 
    	
India
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Japan
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
South Korea
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Mexico
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Malaysia
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
New Zealand
    	
 
    	
[***]
    	
 
    	
Issued
    
	
[***]
    	
 
    	
Philippines
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Russia
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Singapore
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Thailand
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Taiwan
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Ukraine
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
United States
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Uruguay
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Venezuela
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
South Africa
    	
 
    	
[***]
    	
 
    	
Pending
    

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

32

 

	
Array Matter No.
    	
 
    	
Country
    	
 
    	
Appln. No./
   Publication No.
    	
 
    	
Status
    
	
[***]
    	
 
    	
United States
    	
 
    	
[***]
    	
 
    	
Expired
    
	
[***]
    	
 
    	
PCT
    	
 
    	
[***]
    	
 
    	
Expired
    
	
[***]
    	
 
    	
Argentina
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Australia
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Brazil
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Canada
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Chile
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
China
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Colombia
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Costa Rica
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Egypt
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Europe
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Gulf Cooperation
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Hong Kong
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Indonesia
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Israel
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
India
    	
 
    	
[***]
    	
 
    	
Pending
    

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

33

 

	
Array Matter No.
    	
 
    	
Country
    	
 
    	
Appln. No./
   Publication No.
    	
 
    	
Status
    
	
[***]
    	
 
    	
Japan
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
South Korea
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Mexico
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Malaysia
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
New Zealand
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Philippines
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Russia
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Singapore
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Thailand
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Taiwan
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Ukraine
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
United States
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Uruguay
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Venezuela
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
South Africa
    	
 
    	
[***]
    	
 
    	
Pending
    

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

34

 

	
Array Matter No.
    	
 
    	
Country
    	
 
    	
Appln. No./
   Publication No./
   Patent No.
    	
 
    	
Status
    
	
[***]
    	
 
    	
United States
    	
 
    	
[***]
    	
 
    	
Expired
    
	
[***]
    	
 
    	
United States
    	
 
    	
[***]
    	
 
    	
Expired
    
	
[***]
    	
 
    	
PCT
    	
 
    	
[***]
    	
 
    	
Expired
    
	
[***]
    	
 
    	
Argentina
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Australia
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Brazil
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Canada
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Chile
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
China
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Colombia
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Costa Rica
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Egypt
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Europe
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Gulf Cooperation
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Indonesia
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Israel
    	
 
    	
[***]
    	
 
    	
Pending
    

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

35

 

	
Array Matter No.
    	
 
    	
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Appln. No./
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[***]
    	
 
    	
India
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Japan
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
South Korea
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Mexico
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Malaysia
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
New Zealand
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Philippines
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Russia
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Singapore
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Thailand
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Taiwan
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Ukraine
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
United States
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Uruguay
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
Venezuela
    	
 
    	
[***]
    	
 
    	
Pending
    
	
[***]
    	
 
    	
South Africa
    	
 
    	
[***]
    	
 
    	
Pending
    

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

36

 

EXHIBIT B

 

Targets

 

1.                                      The protein family commonly known as [***], identified with the following SwissProt entries:

 

[***]

 

2.                                      The protein commonly known as [***], identified with the following SwissProt entries:

 

[***]

 

3.                                      The protein commonly known as [***], identified with the following SwissProt entries:

 

[***]

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

37

 

EXHIBIT C

 

Trk Compounds

 

[***]

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

38

 

[***]

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

39

 

[***]

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

40

 

[***]

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

41

 

[***]

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

42

 

[***]

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

43

 

[***]

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

44

 

[***]

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

45

 

AMENDMENT NO. 1 TO

 

DRUG DISCOVERY COLLABORATION AGREEMENT

 

THIS AMENDMENT NO. 1 TO DRUG DISCOVERY COLLABORATION AGREEMENT (this “Amendment”) effective as of November 26, 2013 (the “Amendment Date”), is made by and between Array BioPharma Inc., a Delaware corporation (“Array”), and Loxo Oncology, Inc., a Delaware corporation (“Loxo”).

 

WHEREAS, the parties previously entered into that certain Drug Discovery Collaboration Agreement dated as of July 3, 2013 (the “Agreement”) and the parties wish to amend the Agreement in certain respects on the terms and conditions set forth herein.

 

NOW THEREFORE, capitalized terms not defined in this Amendment shall have the meaning ascribed in the Agreement, and the parties hereby agree as follows:

 

1.                                      Amendment.  Section 2.4 of the Agreement is hereby amended to add the following immediately to the end thereof:

 

Each calendar month during the Discovery Program, on a monthly basis, Loxo shall have the right, upon agreement by Array, to increase the maximum number of Array FTEs to be used under the Discovery Program during such calendar month by [***] FTEs, i.e. from [***]  FTEs to [***]  FTEs.  Loxo may exercise such right by providing written notice (which may be via email from the Loxo CEO) to Array prior to commencement of such calendar month. If Array agrees to the increase for such month, then for each calendar month in which Loxo adds [***] additional FTEs above the maximum specified limit, Loxo shall pay to Array an additional payment of [***] prior to the beginning of such calendar month.  Array will not unreasonably withhold its agreement to such additional FTEs provided that such additional FTEs are reasonably available to Array.

 

2.                                      Miscellaneous.  This Amendment shall be effective for all purposes as of the Amendment Date.  Except as expressly modified herein, the Agreement shall continue to remain in full force and effect in accordance with its terms.  This Amendment may be executed in counterparts, each of which shall be deemed to be an original and together shall be deemed to be one and the same document.

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective duly authorized representatives effective as of the Amendment Date.

 

	
LOXO ONCOLOGY, INC.
    	
 
    	
ARRAY BIOPHARMA INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Joshua H. Bilenker
    	
 
    	
By:
    	
/s/ John Moore
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Joshua H. Bilenker
    	
 
    	
Name:
    	
John Moore
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
CEO
    	
 
    	
Title:
    	
General Counsel
    

 

2

 

AMENDMENT NO. 2 TO

 

DRUG DISCOVERY COLLABORATION AGREEMENT

 

THIS AMENDMENT NO. 2 TO DRUG DISCOVERY COLLABORATION AGREEMENT (this “Amendment”) effective as of April 10, 2014 (the “Amendment Date”), is made by and between Array BioPharma Inc., a Delaware corporation (“Array”), and Loxo Oncology, Inc., a Delaware corporation (“Loxo”).

 

WHEREAS, the parties previously entered into that certain Drug Discovery Collaboration Agreement dated as of July 3, 2013, as amended on November 26, 2013 (collectively, the “Agreement”) and the parties wish to amend the Agreement in certain respects on the terms and conditions set forth herein.

 

NOW THEREFORE, capitalized terms not defined in this Amendment shall have the meaning ascribed in the Agreement, and the parties hereby agree as follows:

 

1.                                      Within sixty (60) days after the Amendment Date to Amendment No.2 to this Agreement, Loxo intends to close a financing in which Loxo will receive aggregate gross proceeds of at least ten million dollars ($10,000,000) (the “Financing”).  Commencing on the date that Loxo closes the Financing, or provides written notice to Array prior to the expiration of such sixty (60) days that Loxo desires to have this Amendment take effect in absence of the Financing, the provisions set forth in this Amendment shall take effect.  If Loxo does not close the Financing within such sixty (60) day period, and Loxo does not otherwise provide such written notice to Array prior to expiration of such sixty (60) day period, this Amendment shall terminate without effect.

 

2.                                      The list of targets on Exhibit B is hereby deleted and replaced with the list of targets that have been mutually agreed in writing by the Parties, as of the date of signing this Agreement .

 

3.                                      Section 2.1 is hereby amended to add the following immediately to the end thereof:

 

With respect to Targets, an additional goal of the Discovery Program is to perform early screening and lead identification to identify a subset of such Targets that will be the subject of further research to identify Lead Compounds directed thereto, as described above.

 

4.                                      Section 2.4 of the Agreement (as amended) is hereby deleted and the following substituted therefor:

 

Discovery Program Staffing.  During the Discovery Program and subject to Loxo funding such FTE’s pursuant to Section 5.1, Array shall devote that number of FTE’s to the

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested for this information.

 

 

conduct of the Discovery Program specified in the Discovery Plan.  The Discovery Plan shall specify [***] Array FTEs at any time during the Discovery Program Term.  Each calendar month during the Discovery Program, on a monthly basis, Loxo shall have the right, upon agreement by Array, to increase the maximum number of Array FTEs to be used under the Discovery Program during such calendar month by [***] FTEs, i.e. from [***] FTEs to [***] FTEs.  Loxo may exercise such right by providing written notice (which may be via email from the Loxo CEO) to Array prior to commencement of such calendar month.  If Array agrees to the increase for such month, then for each calendar month in which Loxo adds [***] additional FTEs above the maximum specified limit, Loxo shall pay to Array an additional payment of [***] prior to the beginning of such calendar month.

 

5.                                      Section 2.10 is hereby deleted and the following substituted therefor:

 

Targets.  On or before the date that is nine (9) months after the Amendment Date to Amendment No. 2 to this Agreement, LOXO shall designate six (6) Targets from Exhibit B for which research activities will be discontinued.  Upon such designation, such discontinued Targets shall cease to be Targets under this Agreement, and Exhibit B shall be deemed to be updated accordingly.  On or before the date that is eighteen (18) months after the Amendment Date to Amendment No. 2 to this Agreement, LOXO shall designate two (2) additional Targets from Exhibit B for which research activities will be discontinued; provided, however, that if on or before the date that is eighteen (18) months after the Amendment Date to Amendment No. 2 to this Agreement Loxo provides to Array written notice and a payment of [***] (the “Extension Payment”), Loxo will only be required to designate one (1) additional Target from Exhibit B for which research activities will be discontinued at the end of such eighteen (18) months.  Upon such designation, such additional discontinued Target(s) shall cease to be Target(s) under this Agreement, and Exhibit B shall be deemed to be updated accordingly.  If Loxo made the Extension Payment, then on or before the date that is [***] after the Amendment Date to Amendment No. 2 to this Agreement, Loxo shall designate one (1) additional Target from Exhibit B for which research activities will be discontinued unless Loxo provides to Array written notice and a payment of [***] (“Additive Payment”) in which case Loxo will not need to designate any more Targets from Exhibit B for discontinuation of research activities.  Until such time as the eight (8) Targets (or seven (7) Targets if Loxo has made the Extension Payment and Additive Payment) have been designated for discontinuation, and notwithstanding Section 8.2.1 to the contrary, Loxo shall only have the right, at its discretion, to file provisional patent applications covering the applicable Active Compounds to the Targets from Exhibit B and will not convert such provisional patent applications to a non-provisional patent application or otherwise prosecute any non-provisional patent application covering such Active Compounds.  During the Discovery Program Term, Loxo may determine in its sole discretion that research activities with respect to one (1) particular Target on Exhibit B should be discontinued

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

 

2

 

(for example, and without limitation, such Target has not yielded sufficient progress, or scientific literature suggests the Target is intractable or is not therapeutically relevant or for safety issues) and replaced with a different target.  Upon any such determination, Loxo shall provide written notice to Array of the one (1) Target that Loxo desires to remove from Exhibit B and will include in such notification a suggested substitute for such discontinued Target.  After receipt of such notice, Array will promptly inform Loxo whether, as of the date of such written notice, the addition of such suggested substitute target would not (i) violate any agreement that Array has with a Third Party; (ii) add a target that is the subject of Array’s own active and ongoing research (with existing commitment and expenditure of resources for such target), was the subject of previous significant research at Array, or is the subject of drugs in Array’s clinical development pipeline or marketed product portfolio; or (iii) add a target with respect to which Array is engaged in active, ongoing substantial negotiations (i.e., has agreed a term sheet containing material business terms) with a Third Party.  If neither (i), (ii) or (iii) apply to such suggested substitute target, then the discontinued Target shall cease to be a Target, the suggested substitute target shall be deemed a Target for the purposes of this Agreement, and Exhibit B shall be deemed to be updated accordingly.  If a proposed target is not available for inclusion, then the fact that Loxo proposed such target or is otherwise interested in such target (or molecules directed to such target) shall be Loxo’s Confidential Information.

 

6.                                      Section 4 of the Agreement is hereby amended by adding the following new Section 4.4 immediately following the end of Section 4.3:

 

4.4                               Right of First Discussion.

 

4.4.1                     Notice.  During the period ending [***] after the Amendment Date to Amendment No. 2 to this Agreement, at least [***] prior to Array entering into material and substantial negotiations to grant to a Third Party the right to develop and/or commercialize compounds that selectively modulate TrkA for any oncology indication, Array agrees to notify Loxo in writing, together with a summary description of the product (including a general statement of its then-current stage of development) or field to be proposed, if any, that would be the subject of such negotiations (“Initial Notice”).  Within [***] following receipt of such Initial Notice, Loxo shall notify Array of its decision whether or not it desires to discuss terms and conditions under which Array would grant such rights to Loxo. If (i) Loxo notifies Array that it does not desire to discuss such terms and conditions, or (ii) the parties have not agreed upon such terms and conditions pursuant to which such rights and license would be granted to Loxo within [***] after the date Loxo notified Array of its desire to negotiate such terms and conditions (the “Negotiation Period”), then Array shall be free to grant to any Third Party the right to develop and/or commercialize compounds that selectively modulate TrkA for such oncology indication, without further obligation to Loxo with respect to such

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

 

3

 

product, and on any terms that Array deems appropriate; provided, however, that if Array has not entered into such an agreement with a Third Party within [***] after expiration of the first (but not any subsequent) Negotiation Period, then Loxo’s right of negotiation under this Section 4.4.1 will continue in accordance with the above terms and Array will provide to Loxo another Initial Notice if Array subsequently desires to enter into material and substantial negotiations with a Third Party.  It is understood that, because Array will be providing the Initial Notice to Loxo prior to the commencement of material and substantial negotiations with a third party, Array may not be able to define the entire or exact scope of the product, field or rights to be granted, and accordingly, so long as the Initial Notice describes a product, field or rights that overlap with the product, field or rights actually negotiated with, or granted to, a third party, Array shall be deemed to have satisfied its obligations, under this Section 4.4.1, with respect to such product; also, it is understood that Array need only provide one such Initial Notice hereunder before engaging in such material and substantial negotiations with the first Third Party, and that Array is not obligated to provide any further notice if Array subsequently engages in discussion with more than one Third Party with respect to the subject matter described in the Initial Notice, subject to Loxo’s renewed right of negotiation if Array does not enter into an agreement within [***] as provided above.

 

4.4.2                     No Implied Obligations.  The only obligations of Array and Loxo under Section 4.4.1 above are as expressly stated therein, and there are no further implied obligations relating to the matters contemplated therein.  Without limiting the foregoing, it is further understood and agreed that the subject selective TrkA modulators may or not be discovered or reduced to practice at all, may or may not be discovered or reduced to practice to any particular degree or at all at the time of the Initial Notice under Section 4.4.1, and that further modification and/or variations of a product may be developed after the date of such Initial Notice; accordingly, so long as Array includes within the Initial Notice a good faith summary of the product as it then exists, or a summary of the field in which the rights would be granted, the requirements of Section 4.4.1 above shall be deemed satisfied with respect to any and all modifications, variants or derivatives of the product developed or reduced to practice after the date of the Initial Notice.  Without limiting the foregoing, it is further acknowledged and agreed that (i) Section 4.4.1 shall not be deemed to apply to a transaction by which a Third Party acquires all or substantially all of the business assets of this Agreement in accordance with Section 13.3 below; (ii) if Array enters into a transaction with a Third Party in accordance with Section 4.4.1 that includes the grant by Array of an option or other contingent right to develop and/or commercialize compounds that selectively modulate TrkA (each such option or right being referred to as a “Contingent Right”), then the grant of rights by Array upon a Third Party’s exercise of such Contingent Right shall not be subject to this Section 4.4 so long as the grant of such Contingent Right was made in a transaction entered into with the Third Party in compliance with Section 4.4.1; and (iii) Array is not obligated under this Section 4.4.1 to provide Loxo any particular information other that

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

 

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as expressly stated in Section 4.4.1, and that Array may require a separate confidentiality agreement as a condition to any disclosure of information in connection with Section 4.4.1.

 

4.4.3                     Disputes.  If Loxo disputes Array’ right to proceed to enter into any transaction with a third party with respect to compounds that selectively modulate TrkA, Loxo shall submit such dispute to binding arbitration within [***] from the end of the applicable Negotiation Period or, if Array had not provided Loxo with the applicable Initial Notice in accordance with Section 4.4.1, then [***] after Loxo first becomes aware of such transaction.  Loxo shall provide Array a notice of such arbitration together with a written report setting forth the specific basis for the dispute and the specific actions Loxo believes Array must take to resolve the dispute (“Arbitration Notice”).  Such arbitration in all events be completed within [***] from appointment of the arbitrators.  If an Arbitration Notice is not received within the [***] period then Loxo shall have no further right to dispute Array’ right to grant any third party rights contemplated by this Section 4.4.

 

7.                                      Section 5.2.1 of the Agreement is hereby deleted and the following substituted therefor:

 

Research Phase Payment Schedule.  During the Discovery Program Term, Loxo agrees to pay Array research funding for the conduct of the Discovery Program quarterly, in advance, in an amount equal to the number of Array FTE’s called for in the Discovery Plan for the applicable quarter multiplied by the Array FTE Rate.  Such payments shall cover (i) FTE expenses used in the Discovery Program, (ii) all incidental materials and resources for the conduct of the Discovery Program, and (iii) CMC activities directed to, and the manufacture of, clinical supply of the Trk Lead Compound and two (2) Lead Compounds for two (2) Targets (selected by Loxo), and if the Discovery Program Term is extended pursuant to Section 2.6 of the Agreement then also for one additional Lead Compound to another Target (selected by Loxo) per each one (1) year extension.  The initial payment shall be made before the date Array FTEs are first deployed in accordance with the Discovery Plan, and subsequent payments shall be made before the first day of each calendar month thereafter.  For purposes of this Section 5.2.1, the “Array FTE Rate” shall be equal to [***] per FTE per year.

 

8.                                      Section 5.3.1 of the Agreement is hereby amended to add the following immediately following the table:

 

With respect to the milestone 1 above described as [***], the applicable milestone payment shall only be due with respect to a [***].

 

9.                                      Section 5.3.3(a) of the Agreement is hereby amended to add the following immediately following the end of Section 5.3.3.(a):

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

 

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Notwithstanding the foregoing, milestone 1 for a Target under Section 5.3.1 will not be due regardless of whether a subsequent milestone was achieved, if milestone 1 was not due because [***].

 

10.                               Good Faith Negotiation.  The Parties agree that they shall negotiate in good faith to enter into a separate binding agreement regarding [***] between Loxo, Array and Massachusetts General Hospital.

 

11.                               Miscellaneous.  This Amendment shall be effective for all purposes as of the Amendment Date.  Except as expressly modified herein, the Agreement shall continue to remain in full force and effect in accordance with its terms.  This Amendment may be executed in counterparts, each of which shall be deemed to be an original and together shall be deemed to be one and the same document.

 

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective duly authorized representatives effective as of the Amendment Date.

 

	
LOXO ONCOLOGY, INC.
    	
 
    	
ARRAY BIOPHARMA INC.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Joshua H. Bilenker
    	
 
    	
By:
    	
/s/ Mike Carruthers
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Joshua H. Bilenker
    	
 
    	
Name:
    	
Mike Carruthers
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
CEO
    	
 
    	
Title:
    	
CFO
    

 

[***] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

 

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