Document:

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this "Agreement") is dated as of March 13, 2015, by and among Fresh Healthy Vending International, Inc. , a Nevada corporation (the "Company") and the persons and entities listed on the schedule of purchasers attached hereto as Schedule I (each a "Purchaser" and, collectively, the "Purchasers").

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act"), and Rule 506 promulgated thereunder, the Company desires to issue and sell to the Purchasers, and the Purchasers, severally and not jointly, desire to purchase from the Company, securities of the Company as more fully described in this Agreement.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Purchasers agree as follows:

ARTICLE I.

DEFINITIONS

1.1            Definitions.  In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Notes (as defined herein), and (b) the following terms have the meanings set forth in this Section 1.1:

"Acquiring Person" shall have the meaning ascribed to such term in Section 4.7.

"Action" shall have the meaning ascribed to such term in Section 3.1(j).

"Affiliate" means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

"Board of Directors" means the board of directors of the Company.

"Business Day" means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

"Closing" means the closing of a purchase and sale of the Securities pursuant to Section 2.1.

"Closing Date" means the Closing Date.

 "Commission" means the United States Securities and Exchange Commission.

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"Common Stock" means the common shares of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

"Common Stock Equivalents" means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

 "Note" means the 12% OID Convertible Note due, subject to the terms therein, maturing on the date three (3) months from the date of the Closing Date, issued by the Company to the Purchasers hereunder, in the form of Exhibit A attached hereto.

"Disclosure Schedules" shall have the meaning ascribed to such term in Section 3.1.

 "Evaluation Date" shall have the meaning ascribed to such term in Section 3.1(r).

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"Exempt Issuance" means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company approved by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities, (c) securities issued pursuant to a merger, consolidation, acquisition or similar business combination approved by a majority of the disinterested directors of the Company, (d) securities issued pursuant to any equipment loan or leasing arrangement, real property leasing arrangement or debt financing from a bank or similar financial institution approved by a majority of the disinterested directors of the Company, (e) securities issued pursuant to collaboration agreements, development, distribution, marketing, technology or other similar agreements, licenses or strategic partnerships approved by a majority of the disinterested directors of the Company whose primary purpose is not capital raising, (f) securities issued in connection with a registered public offering or pursuant to an effective registration statement, (g) securities issued or issuable pursuant to any settlement approved by a majority of the disinterested directors of the Company, and (h) securities with respect to which the Majority Holders have waived their applicable anti-dilution rights (i) securities issued at an effective price per share equal to, or greater than, $0.47 per share.

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"FCPA" means the Foreign Corrupt Practices Act of 1977, as amended.

"GAAP" shall have the meaning ascribed to such term in Section 3.1(h).

"Indebtedness" shall have the meaning ascribed to such term in Section 3.1(aa).

"Intellectual Property Rights" shall have the meaning ascribed to such term in Section 3.1(o).

"Legend Removal Date" shall have the meaning ascribed to such term in Section 4.1(c).

"Liens" means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

"Majority Holders" with respect to a particular class of securities shall mean, in the case of the Notes, the holders of a majority in outstanding aggregate principal amount thereof and in the case of the Warrants, the holders of Warrants representing a majority of the Underlying Shares.

 "Material Adverse Effect" shall have the meaning assigned to such term in Section 3.1(b).

"Material Permits" shall have the meaning ascribed to such term in Section 3.1(m).

"Maximum Rate" shall have the meaning ascribed to such term in Section 5.17.

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

 "Proceeding" means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.

"Public Information Failure" shall have the meaning ascribed to such term in Section 4.3(b).

"Public Information Failure Payments" shall have the meaning ascribed to such term in Section 4.3(b).

"Purchase Price" means, as to the Closing, the aggregate amount to be paid for Notes and Warrants purchased hereunder as specified below the Purchasers' names on the signature pages of this Agreement and next to the heading "Purchase Price," in United States dollars and in immediately available funds or in the form of cancellation of existing cash repayment obligations of the Company to the respective Purchaser.

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"Purchaser Party" shall have the meaning ascribed to such term in Section 4.10.

 "Required Approvals" shall have the meaning ascribed to such term in Section 3.1(e).

"Required Minimum" means, as of any date, two times the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise in full of all Warrants.

"Rule 144" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

"Rule 424" means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

"SEC Reports" shall have the meaning ascribed to such term in Section 3.1(h).

"Securities" means the Notes, the Warrants, the Warrant Shares and the Underlying Shares.

"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 "Short Sales" means all "short sales" as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include the location and/or reservation of borrowable shares of Common Stock). 

 "Subscription Amount" means, as to the Closing, the aggregate principal amount of the Notes purchased hereunder as specified below the Purchasers' names on the signature pages of this Agreement and next to the heading "Subscription Amount," in United States dollars.

 "Subsidiary" means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

 "Trading Day" means a day on which the principal Trading Market is open for trading.

"Trading Market" means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the OTC Bulletin Board or the OTC Markets (or any successors to any of the foregoing).

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 "Transaction Documents" means this Agreement, the Note, the Warrants, all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.

"Transfer Agent" means VStock Transfer, the current transfer agent of the Company, with a mailing address of 18 Lafayette Place, Woodmere, NY 11598, and any successor transfer agent of the Company.

"Underlying Shares" means the shares of Common Stock issued and issuable upon exercise of the Warrants.

"VWAP" means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if the OTC Bulletin Board is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for the Common Stock are then reported in the "Pink Sheets" published by Pink OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchaser of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

"Warrants" means, collectively, the Common Stock purchase warrants delivered to the Purchaser at all Closings held in accordance with Section 2.2(a) hereof, which Warrants shall be exercisable immediately and have a term of exercise equal to five years, in the form of Exhibit B attached hereto.

"Warrant Shares" means the shares of Common Stock issuable upon exercise of the Warrants.

ARTICLE II.

PURCHASE AND SALE

2.1            Closing.  (a) On March 13, 2015 (the "Closing Date"), upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase, an aggregate of $375,000 in principal amount of the Note.  Purchasers shall deliver to the Company, via wire transfer or a certified check, immediately available funds equal to the Purchase Price applicable to such Closing as set forth on the signature pages hereto executed by the Purchasers, and the Company shall deliver to the Purchasers its Notes and Warrants, as determined pursuant to Section 2.2(a), and the Company and Purchasers shall deliver the other items set forth in Section 2.2 deliverable at a Closing.  Upon satisfaction of the covenants and conditions set forth in Sections 2.2, 2.3(a) and 2.3(b), the Closing shall occur at such other location as the parties shall mutually agree.

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(b) Deliveries.

		(a)	On or prior to the Closing Date pursuant to Section 2.1, the Company shall deliver or cause to be delivered to the Purchasers this Agreement duly executed by the Company.  In addition, on or prior to the Closing Date held pursuant to Section 2.1, the Company shall deliver or cause to be delivered to each Purchaser the following:

(i)            a Note with a principal amount equal to the relevant Subscription Amount, registered in the name of the respective Purchaser;

(ii)            a Warrant registered in the name of the respective Purchaser to purchase the number of Warrant Shares, as specified below such Purchaser's names on the respective signature page of this Agreement and next to the heading "Warrant Shares," with an exercise price equal to $0.60, subject to adjustment therein.

		(b)	On or prior to the Closing Date pursuant to Section 2.1, the Purchasers shall deliver or cause to be delivered to the Company this Agreement.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

3.1            Representations and Warranties of the Company.  Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to the Purchasers:

(a)            Subsidiaries.  All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a).  The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.  If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.

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(b)            Organization and Qualification.  The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.  Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents.  Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company's ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a "Material Adverse Effect") and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

(c)            Authorization; Enforcement.  The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company's shareholders in connection herewith or therewith other than in connection with the Required Approvals.  This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

(d)            No Conflicts.  The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not: (i) conflict with or violate any provision of the Company's or any Subsidiary's certificate or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

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(e)            Filings, Consents and Approvals.  The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.6 of this Agreement, (ii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities and the listing of the Warrant Shares for trading thereon in the time and manner required thereby, and (iii) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws (collectively, the "Required Approvals").

(f)            Issuance of the Securities.  The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.  The Underlying Shares, when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.  The Company has reserved from its duly authorized share capital a number of shares of Common Stock for issuance of the Underlying Shares at least equal to the Required Minimum on the date hereof.

(g)            Capitalization.  The Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company's stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company's employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act.  No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents.  Except as a result of the purchase and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents and except as follows. The Company entered into a Financing and Security Agreement (the "Financing Agreement") whereby the Company may borrow up to $1.5 million. The Financing Agreement provides a conversion right at 85% of the average stock price for the 15 days prior to the notice of conversion, but in no event at a conversion price lower than $1.28 per share (see the Company's Form 10-Q for the period ended December 31, 2014 for more detail). As of the date of this Agreement, the Company has $250,000 outstanding under the Financing Agreement.  The issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchaser) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding shares in the capital of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.  No further approval or authorization of any shareholder, the Board of Directors or others is required for the issuance and sale of the Securities.  There are no shareholders agreements, voting agreements or other similar agreements with respect to the Company's share capital to which the Company is a party or, to the knowledge of the Company, between or among any of the Company's shareholders.

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(h)            SEC Reports; Financial Statements.  The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the "SEC Reports") on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.  As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved ("GAAP"), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

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(i)            Material Changes; Undisclosed Events, Liabilities or Developments.  Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof: (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company's financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its shareholders or purchased, redeemed or made any agreements to purchase or redeem any issued shares and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information.  Except for the issuance of the Securities contemplated by this Agreement or as set forth on Schedule 3.1(i), no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, properties, operations, assets or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made.

(j)            Litigation.  Except as set forth in the SEC Reports, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an "Action") which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.  There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company.  The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

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(k)            Labor Relations.  No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect.  To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters.  The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(l)            Compliance.  Except as set forth in the SEC Reports, neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

(m)            Regulatory Permits.  The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect ("Material Permits"), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

(n)            Title to Assets.  Except as set forth in the SEC reports, he Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties.  Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.

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(o)            Intellectual Property.  The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights as described in the SEC Reports as necessary or required for use in connection with their respective businesses and which the failure to so have could have a Material Adverse Effect (collectively, the "Intellectual Property Rights").  None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement.  Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect.  To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights.  The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(p)            Insurance.  The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount.  Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost, except as follows. The Company has notified its insurance carriers that its most recent application was deficient in its disclosures regarding certain Financial Disclosure Document requirements.

(q)            Transactions With Affiliates and Employees.  Except as set forth in the SEC Reports, none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from providing for the borrowing of money from or lending of money to, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, shareholder, stockholder, member or partner, in each case in excess of $120,000 other than for: (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

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(r)            Sarbanes-Oxley; Internal Accounting Controls.  Except as set forth in the SEC reports, the Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date.  Except as described in the SEC Reports, the Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management's general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms.  The Company's certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the "Evaluation Date").  The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date.  Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.

(s)            Certain Fees.  No brokerage or finder's fees or commissions are or will be payable by the Company or any Subsidiaries to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.  The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

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(t)            Private Placement.  Assuming the accuracy of the Purchasers' representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.

(u)            Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an "investment company" within the meaning of the Investment Company Act of 1940, as amended.  The Company shall conduct its business in a manner so that it will not become an "investment company" subject to registration under the Investment Company Act of 1940, as amended.

(v)            Registration Rights.  Other than as disclosed in the SEC Reports, no Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company or any Subsidiaries.

(w)            Listing and Maintenance Requirements.  The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.  Except as set forth in the SEC Reports, the Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. Except as set forth in the SEC Reports, the Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.

(x)            Application of Takeover Protections.  The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company's certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company's issuance of the Securities and the Purchasers' ownership of the Securities.

(y)            Disclosure.  Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided the Purchasers or their agents or counsel with any information that it believes constitutes or might constitute material, non-public information.  The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company.  All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.  The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made and when made, not misleading.  The Company acknowledges and agrees that the Purchasers make no, nor have made any, representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.

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(z)            No Integrated Offering. Assuming the accuracy of the Purchasers' representations and warranties set forth in Section 3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.

(aa)            Solvency.  The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).  Except as set forth in the SEC Reports, the Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date.  Schedule 3.1(i) sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments.  For the purposes of this Agreement, "Indebtedness" means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company's consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP.  Except as set forth in the SEC Reports, neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

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(bb)            Tax Status.                          Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply.  There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.

(cc)            No General Solicitation. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Securities by any form of general solicitation or general advertising.  The Company has offered the Securities for sale only to the Purchasers and certain other "accredited investors" within the meaning of Rule 501 under the Securities Act.

(dd)            Foreign Corrupt Practices.  Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is  in violation of law or (iv) violated in any material respect any provision of FCPA.

(ee)            Accountants.  The Company's accounting firm is PKF.  To the knowledge and belief of the Company, such accounting firm: (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company's Annual Report for the fiscal year ending June 30, 2015.

(ff)            Seniority.  Except as set forth in the SEC Reports, as of the Closing Date, no Indebtedness or other claim against the Company is senior to the Notes in right of payment, whether with respect to interest or upon liquidation or dissolution, or otherwise, other than indebtedness secured by purchase money security interests (which is senior only as to underlying assets covered thereby) and capital lease obligations (which is senior only as to the property covered thereby).

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(gg)            No Disagreements with Accountants and Lawyers.  There are no disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company's ability to perform any of its obligations under any of the Transaction Documents.

(hh)            Acknowledgment Regarding Purchasers' Purchase of Securities.  The Company acknowledges and agrees that the Purchasers are acting solely in their capacity of an arm's length purchaser with respect to the Transaction Documents and the transactions contemplated thereby.  The Company further acknowledges that the Purchasers are not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by the Purchasers or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers' purchase of the Securities.  Furthermore, the Company acknowledges that any authorization made by the Board of Directors to enter into the Transaction Documents and the transactions contemplated therein were taken by the requisite authority of disinterested directors under Delaware Law.  The Company further represents to the Purchasers that the Company's decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

(ii)            Acknowledgment Regarding Purchasers' Trading Activity.  Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(f) and 4.15 hereof and any obligations Purchasers that are members of the Board of Directors may have resulting from such position), it is understood and acknowledged by the Company that: (i) the Purchasers have not been asked by the Company to agree, nor have the Purchasers agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or "derivative" securities based on securities issued by the Company or to hold the Securities for any specified term, (ii) past or future open market or other transactions by the Purchasers, specifically including, without limitation, Short Sales or "derivative" transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company's publicly-traded securities, (iii) the Purchasers, and any counter-parties in "derivative" transactions to which the Purchasers is a party, directly or indirectly, may presently have a "short" position in the Common Stock and (iv) the Purchasers shall not be deemed to have any affiliation with or control over any arm's length counter-party in any "derivative" transaction.  The Company further understands and acknowledges that (y) the Purchaser may engage in hedging activities at various times during the period that the Securities are outstanding, including, without limitation, during the periods that the value of the Underlying Shares deliverable with respect to Securities are being determined, and (z) such hedging activities (if any) could reduce the value of the existing shareholders' equity interests in the Company at and after the time that the hedging activities are being conducted.  The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.

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(jj)            Regulation M Compliance.  The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company's placement agent in connection with the placement of the Securities.

(kk)            Stock Option Plans. Each stock option granted by the Company under the Company's stock option plan was granted (i) in accordance with the terms of the Company's stock option plan and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company's stock option plan has been backdated.  The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.

(ll)            Office of Foreign Assets Control.  Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department ("OFAC").

(mm)            U.S. Real Property Holding Corporation.  The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser's request.

(nn)            Bank Holding Company Act.  Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the "BHCA") and to regulation by the Board of Governors of the Federal Reserve System (the "Federal Reserve").  Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.  Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

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(oo)            Money Laundering.  The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the "Money Laundering Laws"), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

3.2            Representations and Warranties of the Purchaser.    The Purchasers, each individually for itself, himself or herself and not jointly, hereby represent and warrant as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein):

(a)            Organization; Authority.  The Purchaser, if an entity, is an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by the Purchasers of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of the Purchaser.  Each Transaction Document to which it is a party has been duly executed by the Purchaser, and when delivered by the Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of the Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

(b)            Own Account.  The Purchaser understands that the Securities are "restricted securities" and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting the Purchaser's right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws).  The Purchaser is acquiring the Securities hereunder in the ordinary course of its business.

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(c)            Purchaser Status.  At the time the Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which it exercises any Warrants or converts any Notes it will be either: (i) an "accredited investor" as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a "qualified institutional buyer" as defined in Rule 144A(a) under the Securities Act.

(d)            Experience of the Purchaser.  The Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment.  The Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

(e)            General Solicitation.  The Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

(f)            Certain Transactions and Confidentiality.  Other than consummating the transactions contemplated hereunder, the Purchaser has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with the Purchaser, executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that the Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.  Other than to other Persons party to this Agreement, the Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions in the future.

The Company acknowledges and agrees that the representations contained in Section 3.2 shall not modify, amend or affect the Purchasers' right to rely on the Company's representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transaction contemplated hereby.

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ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

4.1            Transfer Restrictions.

(a)            The Securities may only be disposed of in compliance with state and federal securities laws.  In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act.  As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights and obligations of a Purchaser under this Agreement.

(b)            The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities substantially in the following form:

[NEITHER] THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE] [CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THIS SECURITY [AND THE SECURITIES ISSUABLE UPON [EXERCISE] [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

The Company acknowledges and agrees that the Purchasers may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an "accredited investor" as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement and, if required under the terms of such arrangement, the Purchasers may transfer pledged or secured Securities to the pledgees or secured parties.  Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith.  Further, no notice shall be required of such pledge.  At the appropriate Purchasers' expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities.

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(c)            Certificates evidencing the Underlying Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) while a registration statement  covering the resale of such security is effective under the Securities Act, (ii) following any sale of such Underlying Shares pursuant to Rule 144, (iii) if such Underlying Shares are eligible for sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Underlying Shares and without volume or manner-of-sale restrictions or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly if required by the Transfer Agent to effect the removal of the legend hereunder.  If all or any portion of a Note is converted or Warrant is exercised at a time when there is an effective registration statement to cover the resale of the Underlying Shares, or if such Underlying Shares may be sold under Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Underlying Shares and without volume or manner-of-sale restrictions or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then such Underlying Shares shall be issued free of all legends.  The Company agrees at such time as such legend is no longer required under this Section 4.1(c), it will, no later than seven Trading Days following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Underlying Shares, as applicable, issued with a restrictive legend (such seventh Trading Day, the "Legend Removal Date"), deliver or cause to be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other legends.  The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.  Certificates for Underlying Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent to such Purchaser by crediting the account of such Purchaser's prime broker with the Depository Trust Company System as directed by such Purchaser.

(d)            The Purchasers, severally and not jointly with the other Purchasers, agree with the Company that the Purchasers will sell any Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities are sold pursuant to a Registration Statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing Securities as set forth in this Section 4.1 is predicated upon the Company's reliance upon this understanding.

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4.2            Acknowledgment of Dilution.  The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain market conditions.  The Company further acknowledges that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Underlying Shares pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other shareholders of the Company.

4.3            Furnishing of Information; Public Information.

(a)            Until the earliest of the time that (i) no Purchaser owns Securities or (ii) the Warrants have expired, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.

4.4       Integration.  The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

4.5            Exercise Procedures.  Each of the form of Notice of Exercise included in the Warrants set forth the totality of the procedures required of the Purchasers in order to exercise the Warrants.  Without limiting the preceding sentences, no ink-original Notice of Exercise is required in order to exercise the Warrants.  No additional legal opinion, other information or instructions shall be required of the Purchaser to exercise their Warrants.  The Company shall honor exercises of the Warrants and shall deliver Underlying Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.

4.6            Securities Laws Disclosure; Publicity.  The Company and the Purchasers shall consult with each other in issuing any press releases with respect to the transactions contemplated hereby, and neither the Company nor the Purchasers shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of the Purchasers, or without the prior consent of the Purchasers, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.  Notwithstanding the foregoing, the Company shall not publicly disclose the name of the Purchasers, or include the name of the Purchasers in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of the Purchaser, except: (a) as required by federal securities law in connection with (i) any registration statement contemplated by the Company and (ii) the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).

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4.7            Shareholder Rights Plan.  No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser is an "Acquiring Person" under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.

4.8            Non-Public Information.  Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company covenants and agrees that neither it, nor any other Person acting on its behalf, will provide any Purchaser or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto the Purchasers shall have entered into a written agreement with the Company regarding the confidentiality and use of such information.  The Company understands and confirms that the Purchasers shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

4.9            Use of Proceeds.  The Company shall use the net proceeds from the sale of the Securities hereunder for working capital purposes and shall not use such proceeds: (a) for the satisfaction of any portion of the Company's debt (other than payment of trade payables in the ordinary course of the Company's business and prior practices), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations.

4.10            Indemnification of Purchasers.   Subject to the provisions of this Section 4.10, the Company will indemnify and hold the Purchasers and their respective directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls a Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons, as applicable, (each, a "Purchaser Party") harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys' fees and costs of investigation that any the Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any shareholder of the Company who is not an Affiliate of the Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of the Purchaser Party's representations, warranties or covenants under the Transaction Documents or any agreements or understandings the Purchaser Party may have with any such shareholder or any violations by such  Purchaser Party of state or federal securities laws or any conduct by the Purchaser Party which constitutes fraud, gross negligence, willful misconduct or malfeasance).  If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, the Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party.  Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position of the Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel.  The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company's prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party's breach of any of the representations, warranties, covenants or agreements made by the Purchaser Party in this Agreement or in the other Transaction Documents.  The indemnification required by this Section 4.10 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred.  The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.

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4.11            Reservation and Listing of Securities.

(a)            The Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents and shall confirm the adequacy of such reserve at least monthly.

(b)            If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required Minimum on such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company's certificate or articles of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum at such time, as soon as possible and in any event not later than the 75th day after such date.

(c)            The Company shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such Trading Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum on the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for listing or quotation on such Trading Market as soon as possible thereafter, (iii) provide to the Purchaser evidence of such listing or quotation and (iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum on such date on such Trading Market or another Trading Market.

Page 25 of 36

4.12            Certain Transactions and Confidentiality. Each Purchaser covenants that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales, of any of the Company's securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.6.  Each Purchaser covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.6, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Transaction Documents and the Disclosure Schedules.  Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that, other than any obligations Purchasers that are members of the Board of Directors may have resulting from such position, (i) each Purchaser makes no representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.6, (ii) each Purchaser shall not be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.6 and (iii) each Purchaser shall not have any duty of confidentiality to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 4.6. 

 

4.13            Form D; Blue Sky Filings.  The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof, promptly upon request of the Purchasers. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers at the Closing under applicable securities or "Blue Sky" laws of the states of the United States, and shall provide evidence of such actions promptly upon request of the Purchasers.

4.14            Prohibition on Variable Rate Transactions, Secured Debt Transactions and Section 3(a)(10) Transactions.  The Company agrees not to (i) enter into any financing transactions that contain a conversion price that changes daily or varies based on the current market price of the common stock (a "Variable Rate Transaction") or (ii) incur any additional secured indebtedness (a "Secured Debt Transaction").  The Company further agrees not to enter into any debt settlement agreements pursuant to Section 3(a)(10) of the Securities Act of 1933.

Page 26 of 36

4.15            Mandatory Repayment Upon New Financing.  The Company agrees that upon completing a financing with gross proceeds of $1 million, either in a single transaction or in a series of transactions with one or multiple purchasers, then the Company will be required to immediately repay all amounts owed and outstanding on the 12% OID Note.

ARTICLE V.

MISCELLANEOUS

5.1            Termination.  This Agreement may be terminated by the Purchasers, as to the Purchasers' obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchaser, by written notice to the other parties, if the Closing under Section 2.1 has not been consummated on or before March 20, 2015; provided, however, that such termination will not affect the right of any party to sue for any breach by any other party (or parties).

5.2            Fees and Expenses.  At the Closing under Section 2.1, the Company has agreed to reimburse Gemini Master Fund, Ltd. or its assigns ("Gemini") the non-accountable sum of $3,500.  The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any conversion or exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.

5.3            Entire Agreement.  The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

5.4            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: (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given.  The address for such notices and communications shall be as set forth on the signature pages attached hereto.

5.5            Amendments; Waivers.  No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by each of the Company, Gemini and the Purchasers (including if applicable, Gemini) holding a majority in outstanding principal of the then outstanding Notes or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought.  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.

Page 27 of 36

5.6            Headings.  The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

5.7            Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.  The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchasers (other than by merger).  The Purchasers may assign any or all of its rights under this Agreement to any Person to whom the Purchasers assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the "Purchaser."

5.8            No Third-Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.10 and this Section 5.8.

5.9            Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of California, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in San Diego County.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the San Diego County for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.   If either party shall commence an action, suit or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.10, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for its reasonable attorneys' fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

Page 28 of 36

5.10            Survival.  The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.

5.11            Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a ".pdf" format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page were an original thereof.

5.12            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 hereto shall use their commercially 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.

5.13            Rescission and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however, that in the case of a rescission of a exercise of a Warrant, the applicable Purchaser shall be required to return any shares of Common Stock subject to any such rescinded exercise notice concurrently with the return to such Purchaser of the aggregate exercise price paid to the Company for such shares and the restoration of such Purchaser's right to acquire such shares pursuant to the Purchaser's Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).

5.14            Replacement of Securities.  If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction.  The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.

Page 29 of 36

5.15            Remedies.  In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents.  The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

5.16            Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

5.17            Usury.  To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter in force, in connection with any claim, action or proceeding that may be brought by any Purchaser in order to enforce any right or remedy under any Transaction Document.  Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the "Maximum Rate"), and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate.  It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date thereof forward, unless such application is precluded by applicable law.  If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to any Purchaser with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by the Purchaser to the unpaid principal balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at such Purchaser's election.

5.18            Liquidated Damages.  The Company's obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled.

Page 30 of 36

5.19            Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

5.20            Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

5.21            WAIVER OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

(Signature Pages Follow)

Page 31 of 36

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

	
FRESH HEALTHY VENDING INTERNATIONAL, INC. 

 

 

	
By: /s/Nicholas Yates

     Name: Nicholas Yates

     Title: Chairman

 

	
 

Address for Notice:

 

9605 Scranton Road

Suite 801

San Diego, CA  92121

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

Name of Purchaser: GEMINI MASTER FUND, LTD.

 

Signature of Authorized Signatory of Purchaser:   /s/Steven W. Winters

 

Name of Authorized Signatory: Steven W. Winters

 

Title of Authorized Signatory: President to the Investment Manager

 

Email Address of Authorized Signatory: Steve@GeminiStrategies.com

 

Facsimile Number of Authorized Signatory: N/A

 

Address for Notice to Purchaser:

c/o Gemini Strategies LLC, Inc.

619 South Vulcan Ave., Suite #203

Encinitas, CA 92024

Subscription Amount: $375,000

Purchase Price: $350,000 (less withholding of $3,500 fees and expenses)

Warrant Shares: 150,000

EIN Number: _____________________

 

SCHEDULE I

PURCHASERS

	 

Purchasers

	 	
Purchase Price

	 	 	
Principal Amount of Note

	 	 	 

Warrant Shares

	 
	
Gemini Master Fund, Ltd.

 c/o Gemini Strategies LLC, Inc.

619 South Vulcan Ave., Suite #203

Encinitas, CA 92024

	 	
$

	
350,000

	 	 	
$

	
375,000

	 	 	 	
150,000

	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	
Total

	 	
$

	
350,000

	 	 	
$

	
375,000

	 	 	 	
150,000

	 

 

EXHIBIT A

[FORM OF NOTE]

 

EXHIBIT B

[FORM OF WARRANT]EXHIBIT 10.42

 

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

 

EXECUTION VERSION

 

CLINICAL TRIAL COLLABORATION AGREEMENT

This Clinical Trial Collaboration Agreement (this “Agreement”) is made and entered into effective as of November 21, 2014 (the “Effective Date”) by and between Five Prime Therapeutics, Inc., a Delaware corporation having a place of business at 2 Corporate Drive, South San Francisco, California 94080 (“Five Prime”), and BriMstol-Myers Squibb Company, a Delaware corporation headquartered at 345 Park Avenue, New York, New York 10154 (“BMS”). Five Prime and BMS may be referred to herein individually as a “Party,” or collectively as the “Parties.”

RECITALS

WHEREAS, Five Prime and BMS desire to collaborate on one or more clinical trials of a combination therapy using Five Prime’s humanized monoclonal antibody that binds CSF1R known as “FPA008” and BMS’s human monoclonal antibody that binds PD-1 known as “Nivolumab”, certain rights to which are licensed by BMS from, and shared by BMS with, Ono Pharmaceutical Co. Ltd. (“Ono”).

NOW, THEREFORE, in consideration of the foregoing premises and the promises and covenants contained herein, the Parties agree as follows:

Article 1

DEFINITIONS

The terms in this Agreement with initial letters capitalized, whether used in the singular or the plural, shall have the meaning set forth below or, if not listed below, the meaning designated in places throughout this Agreement.

1.1“Additional Tumor Type” shall mean any Tumor Type (other than the Initial Tumor Types) that is added to the Development Plan by the JDC subsequent to the Effective Date.

1.2“Affiliate” shall mean, with respect to a particular Entity, any other Entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such particular Entity. As used in this section, the term “controls” (with correlative meanings for the terms “controlled by” or “under common control with”) means (a) that an Entity owns, directly or indirectly, more than fifty percent (50%) of the voting stock of another Entity, or (b) that such Entity otherwise has the actual ability to control and direct the management of the other Entity, whether by contract or otherwise.

 

EXECUTION VERSION

 

1.3“Aggregate Safety Information” shall mean, with respect to a Party's Single Agent Compound, the (a) safety and toxicity information for such Single Agent Compound that is Combined Therapy Study Data, plus (b) safety and toxicity information from all other clinical trials of such Single Agent Compound, whether alone or in combination with another pharmaceutical agent, in each case including information related to serious adverse events, adverse drug reactions, adverse events, discontinuations due to adverse events and Grade 3 and Grade 4 laboratory abnormalities.  Aggregate Safety Information shall be provided by a Party to the other in the same format as is contained in the investigators’ brochures prepared by such Party for its Compound in each country where a Combined Therapy Trial will be conducted.

1.4“Agreement” shall have the meaning set forth in the preamble to this Agreement, as it may be amended by the Parties from time to time.

1.5“Applicable Law” shall mean all applicable laws, rules and regulations (whether federal, state or local) that may be in effect from time to time and applicable to conduct under this Agreement, including current Good Clinical Practices (GCP), Good Laboratory Practices (GLP) and Good Manufacturing Practices (GMP).

1.6“Arbitration Matter” shall mean any disputed matter that relates to or arises out of the validity, interpretation or construction of, or the compliance with or breach of, this Agreement; provided that such disputed matter has been considered, but not resolved, by the Executive Officers as set forth in Section 13.3(a).  For clarity, no JDC Dispute, Publication Dispute, or any matter requiring agreement of both Parties shall be an Arbitration Matter, provided that certain JDC Disputes described in Section 2.8 shall be resolved through baseball arbitration in accordance with Section 13.3(c).

1.7“Bioanalysis Plan” shall mean the bioanalysis plan for any Samples as may be contemplated by the Development Plan or another subsequent written agreement between the Parties, as described in Section 8.5.

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

1.9“BMS” shall have the meaning set forth in the preamble to this Agreement.

1.10“BMS Compound” shall mean BMS’s proprietary anti-PD-1 monoclonal antibody known as Nivolumab.

1.11“BMS Indemnitees” shall have the meaning set forth in Section 11.2.

1.12“BMS Independent Patent Rights” shall mean any Patent Rights Controlled by BMS (or its Affiliates) as of the Effective Date or during the Term through efforts outside of this Agreement that Cover the use (whether alone or in combination with other agents), manufacture, formulation or composition of matter of the BMS Compound.

Page 2 of 84

 

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

 

EXECUTION VERSION

 

1.13“BMS Regulatory Documentation” shall mean any Regulatory Documentation related to the BMS Compound that exists as of the Effective Date or that is created during the Term through efforts outside this Agreement.

1.14“BMS Study Data” shall have the meaning set forth in Section 8.2.

1.15“BMS Study Invention” shall mean any Invention that relates to: (a) the composition of matter of the BMS Compound (and not the Five Prime Compound); (b) method of manufacture or formulation of the BMS Compound (and not the Five Prime Compound) as a single agent; (c) a method of use of the BMS Compound (and not the Five Prime Compound) as a monotherapy or as used with agents, antibodies or compounds other than an Invention comprising, whether generically or specifically, the use of both the BMS Compound (and/or any other antibodies that are designed to selectively bind to PD-1) and a Five Prime Compound (and/or any other antibodies that are designed to selectively bind to CSF1R)); or (d) arising from the development of the Dako Assay.

1.16“BMS Study Patent Rights” shall mean any Patent Rights that are Controlled by BMS and Cover any BMS Study Invention (and not a Five Prime Study Invention or Combined Therapy Invention) or BMS Study Data, excluding BMS Independent Patent Rights and BMS Technology.  For avoidance of doubt, any such Patent Rights, other than BMS Independent Patent Rights and Five Prime Independent Patent Rights, that Cover both (x) a BMS Study Invention and (y) any other Invention are included within the Combined Therapy Patent Rights.

1.17“BMS Technology” shall mean all Technology Controlled by BMS (or its Affiliates) as of the Effective Date or during the Term through efforts outside of this Agreement related to the BMS Compound or the Combined Therapy and necessary for the performance of the Development Plan. For clarity, BMS Technology does not include (a) Inventions, (b) Study Data, or (c) Combined Therapy Trial Regulatory Documentation.

1.18“Business Day” shall mean a day other than Saturday, Sunday or any day on which commercial banks located in both San Francisco, California and New York, New York are authorized or obligated by Applicable Law to close.

1.19“Change of Control” means with respect to a Party any transaction in which such Party: (a) sells, conveys or otherwise disposes of all or substantially all of its assets to a Third Party; or (b)(i) merges, consolidates with, or is acquired by any other Third Party; or (ii) effects any other transaction or series of transactions; in each case of clause (i) or (ii), such that the stockholders of such Party immediately prior thereto, in the aggregate, no longer own, directly or indirectly, beneficially or legally, more than fifty percent (50%) of the outstanding voting securities or capital stock of the surviving Third Party following the closing of such merger, consolidation, other transaction or series of transactions.

Page 3 of 84

 

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

 

EXECUTION VERSION

 

1.20“Clinical Hold” shall mean that (i) the FDA has issued an order to a Party pursuant to 21 CFR §312.42 to delay a proposed clinical investigation or to suspend an ongoing clinical investigation of the Combined Therapy or such Party’s Single Agent Compound in the United States or (ii) a Regulatory Authority other than the FDA has issued an equivalent order to that set forth in (i) in any other country or group of countries.

1.21“Combined Therapy” shall mean a therapy using the Five Prime Compound and the BMS Compound in combination as individual formulations, for use in the Field, with or without another agent.

1.22“Combined Therapy IND” shall have the meaning set forth in Section 2.1(b).

1.23“Combined Therapy Invention(s)” shall mean all Inventions that are not Five Prime Study Inventions or BMS Study Inventions.  For clarity, Combined Therapy Inventions include any Invention comprising, whether generically or specifically, the use of both the BMS Compound (and/or any other antibodies that are designed to selectively bind to PD-1) and a Five Prime Compound (and/or any other antibodies that are designed to selectively bind to CSF1R.

1.24“Combined Therapy Patent Right(s)” shall mean any Patent Rights that are Controlled by either Party that Cover any Combined Therapy Invention or Combined Therapy Study Data, excluding BMS Independent Patent Rights and Five Prime Independent Patent Rights.

1.25“Combined Therapy Study Data” shall have the meaning set forth in Section 8.2.

1.26“Combined Therapy Trial” shall have the meaning set forth in Section 2.1(a).

1.27“Combined Therapy Trial Regulatory Documentation” shall mean any Regulatory Documentation to be submitted for the conduct of the Combined Therapy Trial, but excluding (a) any Five Prime Regulatory Documentation and (b) any BMS Regulatory Documentation.

1.28“Commercially Reasonable Efforts” means: (a) the carrying out of a Party’s obligations or tasks, other than as set forth in clause (b), with a level of effort and resources consistent with the commercially reasonable practices normally devoted by a similarly situated company, subject to and in accordance with the terms and conditions of this Agreement; and (b) where applied to a Party’s efforts to conduct any Combined Therapy Trial under the Development Plan, the level of effort and resources normally devoted by such Party to conduct a clinical trial for a biopharmaceutical product or compound that is owned by it or to which it has rights, which is of similar market potential, profit potential or strategic value and at a similar stage in its development or product life based on conditions then prevailing.

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

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EXECUTION VERSION

 

1.30“Controlled” shall mean, with respect to particular information or intellectual property, that the applicable Party owns or has a license to such information or intellectual property and has the ability to grant a right, license or sublicense to the other Party as provided for herein without violating the terms of any agreement or other arrangement with any Third Party.

1.31“Cover” means, with respect to a Patent, that, but for rights granted to a Person under such Patent, the practice by such Person of an invention described in such Patent would infringe a Valid Claim included in such Patent, or in the case of a Patent that is a patent application, would infringe a Valid Claim in such patent application if it were to issue as a Patent.

1.32“CRO” means any Third Party contract research organization used to conduct a Combined Therapy Trial, including laboratories and Third Parties used to maintain the safety database from a Combined Therapy Trial, but, for clarity, excluding clinical trial sites and any Third Parties who are individuals.

1.33“Dako” means Dako Denmark A/S.

1.34“Database Lock” means, with respect to each Combined Therapy Trial, such actions as are taken with approval of the JDC to prevent any modification to the database of Study Data generated in the course of such Combined Therapy Trial.

1.35“Developed Tumor Type” means any Initial Tumor Type or any Additional Tumor Type.

1.36“Effective Date” shall have the meaning set forth in the preamble to this Agreement.

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

1.38“Excluded Tumor Type” means a Tumor Type (other than a Developed Tumor Type) for which a Proposing Party has made a proposal for an Additional Non-Developed Study  pursuant to Section 3.5 and where such Proposing Party has, after following the procedures for nomination set forth in Section 3.5(a)((i)-(ii)), initiated the conduct of a clinical trial (in a manner materially consistent with the protocol synopsis last proposed to the Other Party thereunder) outside the scope of this Agreement.

1.39“Executive Officers” shall mean the Senior Vice President and Chief Medical Officer of Five Prime and the Senior Vice President, Global Development & Medical Affairs of BMS (or their respective designees).

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EXECUTION VERSION

 

1.40“FDA” shall mean the United States Food and Drug Administration, or any successor agency having the same or similar authority.

1.41“Field” shall mean the treatment, palliation or cure of cancer in humans.

1.42“Five Prime” shall have the meaning set forth in the preamble to this Agreement.

1.43“Five Prime Compound” shall mean the Five Prime proprietary anti-CSF1R monoclonal antibody known as FPA008.

1.44“Five Prime Indemnitees” shall have the meaning set forth in Section 11.1.

1.45“Five Prime Independent Patent Rights” shall mean any Patent Rights Controlled by Five Prime or a Five Prime Affiliate as of the Effective Date or during the Term through efforts outside of this Agreement that Cover the use (whether alone or in combination with other agents), manufacture,  formulation, or composition of matter of the Five Prime Compound.

1.46“Five Prime Regulatory Documentation” shall mean any Regulatory Documentation related to the Five Prime Compound that exists as of the Effective Date or that is created during the Term through efforts outside this Agreement.

1.47“Five Prime Study Data” shall have the meaning set forth in Section 8.2.

1.48“Five Prime Study Invention” shall mean any Invention that relates to: (a) the composition of matter of the Five Prime Compound (and not the BMS Compound); (b) method of manufacture or formulation of the Five Prime Compound (and not the BMS Compound) as a single agent; or (c) a method of use of the Five Prime Compound (and not the BMS Compound) as a monotherapy or as used in combination with agents, antibodies or compounds other than an Invention comprising, whether generically or specifically, the use of both the BMS Compound (and/or any other antibodies that are designed to selectively bind to PD-1) and a Five Prime Compound (and/or any other antibodies that are designed to selectively bind to CSF1R)).

1.49“Five Prime Study Patent Rights” shall mean any Patent Rights that are Controlled by either Party and Cover any Five Prime Study Invention (and not a BMS Study Invention or the Combined Therapy Invention) or Five Prime Study Data, excluding Five Prime Independent Patent Rights and Five Prime Technology.  For avoidance of doubt, any such Patent Rights, other than BMS Independent Patent Rights and Five Prime Independent Patent Rights, that Cover both (x) a Five Prime Study Invention and (y) any other Invention are included within the Combined Therapy Patent Rights.

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EXECUTION VERSION

 

1.50“Five Prime Technology” shall mean all Technology Controlled by Five Prime or a Five Prime Affiliate as of the Effective Date or during the Term through efforts outside of this Agreement related to the Five Prime Compound or the Combined Therapy and necessary for the performance of the Development Plan.  For clarity, Five Prime Technology does not include (a) Inventions, (b) Study Data, or (c) Combined Therapy Trial Regulatory Documentation.

1.51“Global Safety Database” shall mean the database containing serious adverse events, serious adverse drug reactions and pregnancy reports for the Combined Therapy, and shall be the authoritative data source for regulatory reporting and responding to regulatory queries.

1.52“Good Clinical Practices” or “GCP” shall mean, as to the United States and the European Union, applicable good clinical practices as in effect in the United States and the European Union, respectively, during the Term and, with respect to any other jurisdiction, clinical practices equivalent to good clinical practices as then in effect in the United States or the European Union.

1.53“Good Laboratory Practices” or “GLP” shall mean, as to the United States and the European Union, applicable good laboratory practices as in effect in the United States and the European Union, respectively, during the Term and, with respect to any other jurisdiction, laboratory practices equivalent to good laboratory practices as then in effect in the United States or the European Union.

1.54“GAAP” means U.S. Generally Accepted Accounting Principles.

1.55“Good Manufacturing Practices” “GMP” shall mean, as to the United States and the European Union, applicable good manufacturing practices as in effect in the United States and the European Union, respectively, during the Term and, with respect to any other jurisdiction, manufacturing practices equivalent to good manufacturing practices as then in effect in the United States or the European Union.

1.56“IND” shall mean (a) an Investigational New Drug Application as defined in the United States Food, Drug and Cosmetic Act, as amended, and regulations promulgated thereunder, or any successor application or procedure required to initiate clinical testing of a drug in humans in the United States; (b) a counterpart of such an Investigational New Drug Application that is required in any other country before beginning clinical testing of a drug in humans in such country, including, for clarity, a “Clinical Trial Application” in the European Union; and (c) all supplements and amendments to any of the foregoing.

1.57“Initial Tumor Types” means non-small cell lung cancer, glioblastoma multiforme, colorectal cancer, melanoma, head and neck cancer and pancreatic cancer.

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EXECUTION VERSION

 

1.58“Initial Results Date” shall mean the earlier of (x) the later of the date that (A) BMS has received notice that subject screening has begun for the third dose level cohort in the Phase 1a dose escalation portion of the first Combined Therapy Trial; and (B) the date that BMS has received notice that data from a dose cohort in the first Combined Therapy Trial show that, after dosing with the Combined Therapy, ***; and (y) the date the first subject is dosed in the Phase 1b portion of the first Combined Therapy Trial (which shall be subject to mutual agreement at the JDC).

1.59“Invention” shall mean any invention or Technology, whether or not patentable, that is made, conceived, or first actually reduced to practice by or on behalf of a Party, or by or on behalf of the Parties together (including by a Third Party in the performance of the Combined Therapy Trial), in the performance of the Development Plan, Statistical Analysis Plan or Bioanalysis Plan, but excluding any data or Technology pertaining to the Dako Assay or any Study Data.

1.60“Manufacture” or “Manufacturing” shall mean manufacturing, processing, formulating, packaging, labeling, holding (including storage), and quality control testing of a Single Agent Compound or the Combined Therapy, in each case so as to be suitable for use in the Combined Therapy Trials under Applicable Law.

1.61“Material Safety Issue” means a Party’s good faith belief that there is an unacceptable risk for harm in humans based upon: (i) pre-clinical safety data, including data from animal toxicology studies; or (ii) the observation of serious adverse effects in humans after the Five Prime Compound or the BMS Compound, either as a single agent or in combination with another pharmaceutical agent (including as the Combined Therapy), has been administered to or taken by humans, such as during the Combined Therapy Trial.

1.62“Ono” shall have the meaning set forth in the recitals of this Agreement.

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

1.64“Ono Territory” means Japan, Korea and Taiwan.

1.65“Party” or “Parties” shall have the meaning set forth in the preamble to this Agreement.

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1.66“Patent Rights” shall mean any and all (a) United States or foreign patents; (b) United States or foreign patent applications, including all provisional applications, substitutions, continuations, continuations-in-part, divisions, renewals, and all patents granted thereon; (c) United States or foreign patents-of-addition, reissues, reexaminations (including ex parte reexaminations, inter partes reviews, inter partes reexaminations, post grant reviews and supplemental examinations) and extensions or restorations by existing or future extension or restoration mechanisms, including supplementary protection certificates, patent term extensions, or the equivalents thereof; and (d) any other form of government-issued rights substantially similar to any of the foregoing, and “Patent” shall mean any of the foregoing issued or granted rights.

1.67“Person” shall mean an individual, unincorporated organization or association, governmental authority or agency, Entity or other entity not specifically listed herein.

1.68“Quarter” shall mean the respective periods of three consecutive calendar months ending on March 31, June 30, September 30 and December 31.

1.69“Regulatory Authority” shall mean the FDA or any other governmental authority outside the United States (whether national, federal, provincial and/or local) that is the counterpart to the FDA, including the European Medicines Agency for the European Union.

1.70“Regulatory Documentation” shall mean, with respect to a product containing the BMS Compound as monotherapy or the Five Prime Compound as monotherapy, all submissions to Regulatory Authorities in connection with the development of such product, including all INDs and amendments thereto, BLAs and amendments thereto, drug master files, correspondence with regulatory agencies, periodic safety update reports, adverse event files, complaint files, inspection reports and manufacturing records, in each case together with all supporting documents (including documents with respect to clinical data).

1.71“Restricted Combination” means any clinical trial in humans to study the combination of (x) either (A) an anti-PD-1 antagonist molecule (including antibodies, peptides and chemical compounds) or (B) an anti-PD-L1 antagonist molecule (including antibodies, peptides and chemical compounds), together with (y) an anti-CSF1R antagonist molecule (including antibodies, peptides and chemical compounds) in a Restricted Tumor Type.

1.72 “Restricted Tumor Type” means:

(a)each Initial Tumor Type for so long as the following criteria are continuously satisfied during (or prior to) the applicable time period set forth below:

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EXECUTION VERSION

 

(i)during the period from the Effective Date until the date that is *** after the Effective Date, (A) the Parties are using Commercially Reasonable Efforts to develop a protocol for the first planned Combined Therapy Trial for such Tumor Type, (B) the JDC has not removed such Initial Tumor Type from the Development Plan and (C) the Parties plan to dose, or have dosed, patients in a Combined Therapy Trial in such Initial Tumor Type;

(ii)during the period after the date that is *** after the Effective Date until the date that is *** after the Effective Date, (A) the JDC has approved a protocol for the first planned Combined Therapy Trial for such Tumor Type, (B) the JDC has not removed such Initial Tumor Type from the Development Plan and (C) the Parties plan to dose, or have dosed, patients in a Combined Therapy Trial in such Initial Tumor Type; and

(iii)during the period after the date that is *** after the date of approval of the IND for the first planned Combined Therapy Trial with respect to such Initial Tumor Type, the Parties are conducting an ongoing (as defined below) Phase 1b, randomized Phase 2 or Phase 3 Combined Therapy Trial in such Initial Tumor Type;

provided in each case ((i) through (iii) above) such applicable time period shall be tolled to the extent of any delay in the activities or achievement of objectives set forth in (i) through (iii) above that is caused by (A) Five Prime’s failure to use Commercially Reasonable Efforts in the performance and fulfillment of its activities under this Agreement; or (B) any Regulatory Authority.

 

(b)any Additional Tumor Type beginning on the date the JDC has approved the addition of such Additional Tumor Type to the Development Plan (the “Tumor Type Addition Date” with respect to such Tumor Type) and for so long as the following criteria are continuously satisfied during (or prior to) the time periods set forth below:

(i)during the period from the Tumor Type Addition Date until the date that is *** after the Tumor Type Addition Date, (A) the Parties are using Commercially Reasonable Efforts to develop a protocol for the first planned Combined Therapy Trial for such Additional Tumor Type, (B) the JDC has not removed such Additional Tumor Type from the Development Plan and (C) the Parties plan to dose, or have dosed, patients in a Combined Therapy Trial in such Additional Tumor Type;

(ii)during the period after the date that is *** after the Tumor Type Addition Date for such Additional Tumor Type until the date that is *** after the Tumor Type Addition Date for such Additional Tumor Type, (A) the JDC has approved a protocol for the first planned Combined Therapy Trial for such Additional Tumor Type, (B) the JDC has not removed such Additional Tumor Type from the Development Plan and (C) the Parties plan to dose, or have dosed, patients in a Combined Therapy Trial for such Additional Tumor Type; and

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EXECUTION VERSION

 

(iii)during the period after the date that is *** after the date of approval of the IND for the first planned Combined Therapy Trial with respect to such Additional Tumor Type, the Parties are conducting an ongoing (as defined below) Phase 1b, randomized Phase 2 or Phase 3 Combined Therapy Trial in such for such Additional Tumor Type; 

provided in each case ((i) through (iii) above) such applicable time period shall be tolled to the extent of any delay in the activities or achievement of objectives set forth in (i) through (iii) above that is caused by (A) Five Prime’s failure to use Commercially Reasonable Efforts in the performance and fulfillment of its activities under this Agreement; or (B) any Regulatory Authority.

 

(c)all other Tumor Types, until such Tumor Type becomes an Excluded Tumor Type pursuant to Section 1.38.

For purposes of this definition, a Combined Therapy Trial in a Tumor Type will be deemed “ongoing” from the date patient screening begins in such Combined Therapy Trial with respect to such Tumor Type until *** after the earlier of (w) date of availability of *** for the Combined Therapy Trial; (x) *** after the date *** in such Combined Therapy Trial; and (y) the date enrollment in such Combined Therapy Trial (or the Tumor Type arm of such Combined Therapy Trial, if such Combined Therapy Trial has more than one Tumor Type arm) is stopped for safety, futility or other reasons.  If any Tumor Type ceases to be a Restricted Tumor Type at any point, then it shall thereafter not qualify as a Restricted Tumor Type.

1.73“Right of Cross-Reference” shall mean, with regard to a Party, allowing the applicable Regulatory Authority in a country to have access to relevant information (by cross-reference, incorporation by reference or otherwise) contained in Regulatory Documentation (and any data contained therein) filed with such Regulatory Authority with respect to a Party’s Single Agent Compound (and, in the case of BMS, the Right to Cross-Reference the Combined Therapy IND), only to the extent necessary for the conduct of a Combined Therapy Trial in such country or as otherwise expressly permitted or required under this Agreement to enable a Party to exercise its rights or perform its obligations hereunder, and, except as to information contained in the Combined Therapy IND relating to the Combined Therapy, without the disclosure of such information to such Party.

1.74“Samples” shall mean biological specimens collected from Combined Therapy Trial study subjects (including fresh or archived tumor samples, serum, peripheral blood mononuclear cells, plasma, and whole blood for RNA and DNA sample isolation).

1.75“Single Agent Compound” or “Compound” shall mean, (a) with respect to Five Prime, the Five Prime Compound, and (b) with respect to BMS, the BMS Compound.

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EXECUTION VERSION

 

1.76“Statistical Analysis Plan” shall mean the set of analyses of the Study Data for each Combined Therapy Trial conducted hereunder prepared by Five Prime (in consultation with BMS) and approved by the JDC in accordance with Section 2.4(d), which shall include safety analyses for the Combined Therapy in each Combined Therapy Trial.

1.77“Technology” shall mean information, inventions, discoveries, trade secrets, knowledge, technology, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, specifications, data and results not generally known to the public (including biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, pre-clinical, clinical, safety, manufacturing and quality control data and know-how, including study designs and protocols), in all cases, whether or not patentable, in written, electronic or any other form now known or hereafter developed, materials, data and results, including Regulatory Documentation.

1.78“Third Party” shall mean any Person other than Five Prime or BMS and their respective Affiliates.

1.79“Third Party License Payments” shall mean any payments (e.g., upfront payments, maintenance payments, milestone payments and royalties) due to any Third Party under license agreements or other written agreements granting rights to intellectual property owned or controlled by such Third Party to the extent that such rights are necessary for (i) the making, using or importing of a Party’s Single Agent Compound for the conduct of the Combined Therapy Trial, or (ii) the conduct of any Combined Therapy Trial.

1.80“Tumor Type” means any histologically distinct cancer with a particular organ of origin, which histology and organ of origin shall be determined in accordance with the Clinical Practice Guidelines in Oncology of the National Comprehensive Cancer Network. Tumor Types will be deemed the same for purposes of this Agreement if the subject cancers have the same organ of origin even if they are, for example, of a different disease stage or different line of therapy (e.g., well-differentiated and poorly differentiated gastric cancer, 1st line NSCLC and 2nd line NSCLC), and will be deemed different if the subject cancers have different organs of origin (e.g., gastric cancer and lung cancer) or different histology (e.g., NSCLC and SCLC).  Among non-solid tumor cancers, Tumor Types for leukemia, lymphoma and multiple myeloma, but not their subtypes or lines of therapy, shall be considered different Tumor Types.

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EXECUTION VERSION

 

1.81 “Valid Claim” means: (i) a claim in an issued Patent that has not: (a) expired or been canceled; (b) been declared invalid by an unreversed and unappealable or unappealed decision of a court or other appropriate body of competent jurisdiction; (c) been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise; or (d) been abandoned in accordance with or as permitted by the terms of this Agreement or by written agreement of the Parties; or (ii) a claim under any application for a Patent, in any case, that has not been canceled, withdrawn from consideration, finally determined to be unallowable by the applicable governmental authority or court for whatever reason (and from which no appeal is or can be taken), or abandoned.

Additional Definitions.  In addition to those terms defined above, definitions for each of the following terms are found in the body of this Agreement as indicated below:  

		
	
Defined Term
	
Section

	
Additional Non-Developed Study
	
3.5(b)

	
Alliance Manager
	
2.7

	
Breaching Party
	
12.2(a)

	
Co-Chair
	
2.3

	
Cure Period
	
12.2(a)

	
Dako Assay
	
Exhibit A

	
Development Plan
	
2.1

	
Dispute
	
13.3(a)

	
ICF
	
2.6(a)

	
Exclusive Collaboration Period 
	
3.5(a)

	
Final Match Date
	
3.5(e)

	
Five Prime CSF1R Program
	
3.5(d)

	
Indemnify
	
11.1

	
Infringement
	
6.3(a)

	
IRBs
	
9.3(d)

	
JDC or Joint Development Committee
	
2.3

	
JDC Dispute
	
2.8

	
Joint Subsequent Study
	
5.4(b)

	
Losses
	
11.1

	
Non-Breaching Party
	
12.2(a)

	
Non-Prosecuting Party
	
6.1(c)

	
Officials
	
10.9

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Operational Matters
	
2.6(a)

	
Other Party
	
3.5(b); 5.4(b)

	
Packaging and Labeling Cost
	
4.2(b)

	
Parallel Study
	
3.5(b)

	
Payment
	
10.9

	
Permitted Clinical/Preclinical Research
	
3.5(a)

	
Pharmacovigilance Agreement
	
2.2

	
POTV
	
9.6

	
Proposing Party
	
3.5(b); 5.4(b)

	
Proposed Study
	
3.5(b)

	
Prosecuting Party
	
6.1(c)

	
Protocol
	
2.1(a)

	
Publication Dispute
	
9.5(c)

	
Quality Agreement
	
4.3

	
Results
	
9.5(b)

	
Section 4.2(b) Costs
	
4.2(b)

	
Site/CRO List
	
2.6

	
Study Data
	
8.1

	
Subsequent Study
	
5.4(b)

	
Subsequent Study Agreement
	
5.4(b)

	
Sunshine Laws
	
9.7

	
Term
	
12.1

	
Third Party Claim
	
11.1

	
Third Party Study Costs
	
7.1

 

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Article 2

COLLABORATION SCOPE; GOVERNANCE

2.1Scope of Collaboration; Governance of Agreement.

(a)The Parties shall, pursuant to this Agreement, collaborate to conduct the activities set forth in the development plan agreed by the Parties and disclosed on the Effective Date, as such plan may be amended by the Parties from time to time (the “Development Plan”).  Each clinical trial of a Combined Therapy conducted under the Development Plan (each, a “Combined Therapy Trial”) shall be conducted in accordance with a protocol (each, a “Protocol”) to be drafted by Five Prime (in consultation with BMS) and agreed upon by the Parties at a meeting of the JDC.  Any amendments to the Development Plan will be subject to agreement of the Parties at a meeting of the JDC or by written agreement (including by email acknowledgment) of the JDC Co-Chairs without a meeting.

(b)The Combined Therapy Trials shall be conducted under a combination IND, for which Five Prime will be the sponsor of record (the “Combined Therapy IND”).  Each Party shall have a beneficial one-half interest in such Combined Therapy IND; provided, however, that: (i) in no event will either Party be required to obtain the consent of the other Party to transfer or encumber its interest in the Combined Therapy IND; provided that the transferee or encumbrance holder agrees to abide by the terms and conditions of this Agreement, and provided that any transfer occurs only in connection with, and to the same transferee of, a transfer of all of a Party’s rights in its Single Agent Compound, (ii) Five Prime shall be the sole holder of all legal interests in the Combined Therapy IND, and neither Party shall have any obligation to share with the other Party any consideration received in connection with the sale, license or use of its interest in the Combined Therapy IND where permitted by this Agreement, and (iii) neither Party shall be permitted to grant any Third Party any Right of Cross-Reference with respect to any portion of the Combined Therapy IND relating to the other Party’s Single Agent Compound for use as monotherapy or for use in combination with any other molecules (other than for use with the BMS Compound, in the case of BMS, or the Five Prime Compound, in the case of Five Prime, in each case as permitted by this Agreement), except as required by a governmental authority.  Each Party shall provide a Right of Cross-Reference to their respective INDs for their respective Single Agent Compound as necessary to allow the Combined Therapy Trials to be conducted under the Combined Therapy IND.  For the avoidance of doubt, each Party shall be responsible for (i) drafting and updating as necessary the investigator’s brochure for its respective Single Agent Compound, and (ii) filing all necessary Regulatory Documentation to the existing IND for its respective Single Agent Compound, including the submission to such existing IND of serious adverse event and adverse drug reaction cases emerging from any Combined Therapy Trial.

(c)Information to be Provided by Five Prime

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EXECUTION VERSION

 

(i)Five Prime shall provide BMS with the following relating to the Five Prime Compound: (A) the latest investigator’s brochure (and annual updates), list of ongoing clinical studies and clinically relevant safety information that emerges from other clinical studies within *** (or as soon reasonably practicable) after general distribution of final versions of such documents within Five Prime, in each case, to the extent any applicable confidentiality obligations relating to other combination therapy trials involving the Five Prime Compound and a Third Party’s compound do not prevent Five Prime from sharing such documents with BMS, (B) reasonably prompt notice of any material safety interactions with any Regulatory Authority and the substance thereof regarding any clinical trials of the Five Prime Compound during the Term; (C) a summary of all new clinically relevant toxicology study data on the Five Prime Compound within *** (or as soon as reasonably practicable) after generation within Five Prime; (D) Aggregate Safety Information from all other clinical trials of the Five Prime Compound (if not provided elsewhere) *** or as otherwise agreed to by the JDC; and (E) such other safety data as set forth in the Pharmacovigilance Agreement.  BMS shall use any such data provided pursuant to this Section 2.1(c)(1) solely to evaluate the safety of (1) the Five Prime Compound for use in the Combined Therapy Trials and (2) the Combined Therapy.  All such disclosures are Confidential Information of Five Prime.

(ii)Five Prime shall provide BMS with the following relating to the Combined Therapy: (A) safety analyses for each Combined Therapy Trial in accordance with the applicable Statistical Analysis Plan and (B) such other safety data as set forth in the Pharmacovigilance Agreement.  Each Party shall use any such data provided pursuant to this Section 2.1(c)(ii) solely to evaluate the safety of (1) its own Compound for use in the Combined Therapy Trials and the Combined Therapy and (2) as permitted elsewhere in this Agreement.  All such disclosures are Confidential Information of both Parties.

(iii)Five Prime shall provide BMS with the following relating to the BMS Compound: (A) safety analyses for the BMS Compound as monotherapy from each Combined Therapy Trial in accordance with the applicable Statistical Analysis Plan and (B) such other safety data as set forth in the Pharmacovigilance Agreement.  BMS may use such information for any purpose and all such information and data shall be Confidential Information of BMS.

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(d)BMS shall provide Five Prime with the following relating to the BMS Compound: (i) the latest investigator’s brochure (and annual updates), list of ongoing clinical studies and clinically relevant safety information that emerges from other clinical studies within *** (or as soon as reasonably practicable) after general distribution of final versions of such documents within BMS, in each case, to the extent any applicable confidentiality obligations relating to other combination therapy trials involving the BMS Compound and a Third Party’s compound do not prevent BMS from sharing such documents with Five Prime, (ii) reasonably prompt notice of any material safety interactions with any Regulatory Authority and the substance thereof regarding any clinical trials of the BMS Compound during the Term; (iii) a summary of all new clinically relevant toxicology study data on the BMS Compound within *** (or as soon as reasonably practicable) after generation within BMS; (iv) Aggregate Safety Information from all other clinical trials of the BMS Compound (if not provided elsewhere) *** or as otherwise agreed to by the JDC; and (vi) such other safety data as set forth in the Pharmacovigilance Agreement.  Five Prime shall use any such data provided pursuant to this Section 2.1(d) solely to evaluate the safety of (1) the BMS Compound for use in the Combined Therapy Trials and (2) the Combined Therapy.  All such disclosures are Confidential Information of BMS.

(e)If further studies, including toxicity studies, are required or suggested by a Regulatory Authority as a prerequisite for conducting any of the Combined Therapy Trials, then the Parties agree to hold good faith discussions in a timely manner to agree upon a protocol for such studies and amend the Development Plan to include the conduct of such studies; provided that, if the Parties are unable to agree upon a protocol for such study or if the conduct of such study shall cause a delay deemed unsatisfactory by either Party, then any disputed matters precluding agreement shall be referred to the Executive Officers (or their respective designees) for resolution.  If the Executive Officers are unable to reach resolution within *** after such referral to them (and do not mutually agree to an extension of time to arrive at such resolution), then this Agreement shall automatically terminate following the conclusion of any then-active Combined Therapy Trial (unless and until the Protocol for such required/suggested study(ies) is finalized by mutual agreement prior to the completion of such Combined Therapy Trial) and the provisions of Section 12.5 shall apply to any such termination.

(f)The Parties may agree to vary the timing and scope of the information to be provided under Sections 2.1(c) and (d) above in the Pharmacovigilance Agreement.

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2.2Safety Data Exchange. The Parties shall use diligent efforts to define and finalize the processes the Parties shall employ to protect patients and promote their well-being in connection with the use of the Combined Therapy, and to execute a written pharmacovigilance agreement (the “Pharmacovigilance Agreement”) within *** after the Effective Date, and prior to the dosing of the first patient in the first Combined Therapy Trial under the Development Plan.  Such Pharmacovigilance Agreement shall (a) provide that Five Prime or its designee shall hold and be responsible for the maintenance of the Global Safety Database for the Combined Therapy and safety reporting for the Combined Therapy, and shall lead all pharmacovigilance activities for the Combined Therapy, and (b) include mutually acceptable guidelines and procedures for the receipt, investigation, recordation, communication, and exchange (as between the Parties) of adverse event reports, pregnancy reports, and any other information concerning the safety of the Combined Therapy. Such guidelines and procedures shall be in accordance with, and enable the Parties and their Affiliates to fulfill, local and international regulatory reporting obligations to government authorities. Furthermore, such agreed procedures shall be consistent with relevant International Council for Harmonization (ICH) guidelines, except where said guidelines may conflict with existing local regulatory safety reporting requirements or Applicable Law, in which case local reporting requirements or Applicable Law shall prevail. In the event that this Agreement is terminated, the Parties agree to implement the necessary procedures and practices to ensure that any outstanding pharmacovigilance reporting obligations are fulfilled.  To the extent any provision set forth in the Pharmacovigilance Agreement conflicts with any provision in this Agreement, the provision set forth in the Pharmacovigilance Agreement shall control to the extent related solely to the exchange and reporting of safety information associated with use of the products in the performance of the Development Plan as well as product safety surveillance, and the provisions of this Agreement shall control with respect to any other such conflict.

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2.3Joint Development Committee. Promptly after the Effective Date, the Parties shall form a Joint Development Committee (the “JDC”).  The JDC shall consist of *** of representatives from each Party.  Each Party shall be responsible for determining the qualifications and substitutions of its JDC members. It is anticipated that each Party’s representatives may include experts in clinical development, project management, patient safety and regulatory affairs and CMC.  Each Party may invite representatives of such Party who are not JDC members to attend JDC meetings, provided that any JDC meeting that includes representatives of either Party who are not JDC members may, at the request of any JDC member, include a closed session consisting of only JDC members and Alliance Managers.  The JDC shall be co-chaired with one chairperson designated by each Party (each, a “Co-Chair”).  The JDC shall meet at least ***, or at such other frequency as the JDC agrees (and it may appoint subteams to meet more frequently), provided that either Party through its Co-Chair may request a meeting of the JDC at any time upon *** notice to the other Party, with the understanding that the other Party will use reasonable efforts to comply with such request but such other Party will not be in breach of this Agreement in the event that it is unable to comply with such request but is using reasonable efforts to conduct a JDC meeting as promptly as practicable.  Upon request by either Party, such meetings will be held by audio or video teleconference; provided that face-to-face meetings shall occur at least ***, the location of which shall alternate between South San Francisco, California and Princeton, New Jersey.  There must be a minimum of *** JDC representatives from each Party at any meeting of the JDC.  No fewer than *** prior to each meeting, and in any event as soon as reasonably practicable, each Party shall use good faith efforts to disclose to the other Party any proposed agenda items together with appropriate supporting information.  The JDC Co-Chairs shall alternate responsibility for preparing and circulating definitive minutes of each meeting of the JDC.  Such minutes shall provide a description, in reasonable detail, of the discussions at the meeting, a list of material actions and decisions made by the JDC, a list of action items made by the JDC and a list of material issues not resolved by the JDC.  The JDC Co-Chair who drafts the minutes shall provide the other Co-Chair and each Party’s Alliance Managers with the initial draft meeting minutes, who shall return the draft with any proposed changes, and this process shall be repeated until a final version of the meeting minutes is agreed upon and signed (or acknowledged as final via email) by the two Co-Chairs.  The Parties shall reasonably cooperate to complete and agree upon a final version of meeting minutes within *** from the date of the relevant meeting.  The final version of the meeting minutes shall be signed (or acknowledged as final via email) by the two Co-Chairs, and each Party shall be provided with a copy of the final meeting minutes for its safekeeping.  A reasonable number of additional representatives of a Party may attend meetings of the JDC in advisory capacity with the prior written consent of the other Party.  All representatives to the JDC or attending JDC meetings shall be subject to confidentiality and nonuse restrictions at least as restrictive as those set forth herein.

2.4Responsibilities of the Joint Development Committee.  Each Party shall keep the JDC informed about activities performed by that Party hereunder. The JDC (or in the absence of a formal JDC meeting the Co-Chairs) shall be responsible for the following:

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(a)overseeing the activities of the Parties with respect to the Development Plan, and providing a forum for the Parties to discuss, monitor and coordinate all activities and communications under the Development Plan;

(b)approving a budget for activities under the Development Plan, including any Combined Therapy Trial;

(c)reviewing (i) the progress of activities under the Development Plan, (ii) the proposed plan for medical monitoring and site audits (with Five Prime to take comments of the JDC members to such proposed plan into account) and (iii) the results of such medical monitoring and site audits;

(d)reviewing and approving any Additional Tumor Type pursuant to Section 3.5(b) and/or  reviewing and approving any substitution of any Developed Tumor Type with an Additional Tumor Type;

(e)reviewing and approving with respect to each Combined Therapy Trial (i) the applicable Protocol and any proposed amendments thereto and (ii) the applicable Statistical Analysis Plan, which the JDC shall approve before the date the Database Lock for such Combined Therapy Trial occurs, and any proposed amendments thereto;

(f)approving any immunogenicity analysis for each Combined Therapy Trial, including the Protocol and the Entity selected to conduct the analysis;

(g)approving any Bioanalysis Plan (other than the Dako Assay) not set forth in the Protocol or on Exhibit A, and any amendments thereto (except those relating to the Dako Assay);

(h)reviewing proposed communication strategies and communications with any Regulatory Authority regarding the conduct of the Combined Therapy Trials and approving such proposed communications and communication strategies;

(i)approving any IND submitted for a Combined Therapy Trial, as well as reviewing submissions to any such IND in accordance with Article 5;

(j)reviewing any Combined Therapy Trial Regulatory Documentation, or portions thereof, that relate to the Combined Therapy, in accordance with Article 5;

(k)agreeing on the selection of study sites pursuant to Section 2.6(d), and  agreeing on any communications to study sites or IRBs relating to patient safety or early termination/cessation of a Combined Therapy Trial;

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(l)appointing working teams, including a clinical execution working team, to be made up of representatives from each Party, that will hold telephone discussions at an agreed-upon frequency to review clinical development, patient safety and regulatory issues that arise in the course of the Combined Therapy Trials and approving the template ICF, template case report form and template clinical site study agreement to be used in a given Combined Therapy Trial;

(m)determining the quantities of Five Prime Compound and BMS Compound and any co-medications necessary for the Combined Therapy Trials and coordinating the supply of such quantities by the appropriate Party in accordance with Article 4;

(n)reviewing and approving, in advance, any additional analyses of, or that include, the Combined Therapy Study Data proposed by either Party that are not included in the Statistical Analysis Plan; provided that, for clarity, such review and approval shall not apply to analyses by a Party of the monotherapy data for its own Compound from a Combined Therapy Trial;

(o)reviewing and approving use of any Samples in accordance with Section 8.5 that are not described in the Development Plan and ICF, so long as the JDC remains in force and effect;

(p)reviewing and approving (1) the selection of any CRO and any Third Party contractor (other than individuals in a Party’s workforce who are engaged on an independent contractor basis) that has a material role in each Combined Therapy Trial pursuant to Section 2.6(d) and (2) the terms of the CRO contract or pharmacovigilance contract (including costs thereof and any impact on the budget described in clause (b) above) with a Third Party;

(q)reviewing and approving the countries in which each Combined Therapy Trial will be conducted, as set forth in Section 2.6(d);

(r)approving the final clinical trial report (and/or final statistical analysis in accordance with the Statistical Analysis Plan) from each Combined Therapy Trial; and

(s)discussing any other topics or issues relating to the Combined Therapy Trials that either Party requests that cannot be resolved at the working team level.

For clarity, the JDC shall continue to meet to discuss the matters set forth in clauses (a)-(r) above with respect to any Parallel Study or Subsequent Study (other than a Joint Subsequent Study); provided that a Proposing Party with respect to a Parallel Study shall have final decision-making authority with respect to any such Parallel Study; provided further that the Proposing Party with respect to a Subsequent Study shall have final decision-making authority with respect to any such Subsequent Study.

 

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2.5Joint Development Committee Authority.

(a)The JDC shall take action by unanimous consent, with each Party having a single vote, irrespective of the number of its representatives actually in attendance at a meeting. In the absence of a formal meeting, the Co-Chairs shall have decision-making authority for the JDC, so long as any decisions are documented as provided below.

(b)The JDC shall have the right to make only those determinations expressly enumerated as decisions of the JDC in this Agreement; provided that such determinations are documented in the written minutes signed (or acknowledged as final via email) by the JDC Co-Chairs.

(c)Notwithstanding anything to the contrary in this Agreement, the JDC will have no power to amend this Agreement, the Development Plan, the Pharmacovigilance Agreement or Quality Agreement without such Party’s prior written consent; in each case, except by a writing (and that is not the minutes of a meeting) signed by both Parties.

2.6Five Prime Operational Authority Generally.

(a)Five Prime shall, subject to the oversight and determinations of the JDC as provided in Sections 2.3 and 2.4, the terms of the applicable Combined Therapy Protocol, the decisions and guidance of applicable Committee(s), and applicable terms and conditions of this Agreement: (i) manage and be primarily responsible for the conduct of the Combined Therapy Trials; (ii) be the sponsor and regulatory lead with respect to the Combined Therapy Trials; and (iii) as between the Parties, be the lead with respect to (1) the selection and management of clinical study sites (including budget negotiations with vendors, timelines and contingency planning), subject to Sections 5.1(a)(x) and 5.1(b)(vi) with respect to site selection and subject to BMS’s consent as to the country(ies) where each Combined Therapy Trial will be conducted, (2) conducting clinical study start-up activities, communicating with and obtaining approval from institutional review boards and/or ethics committees, as applicable, and drafting for both Parties’ approval the template informed consent form (“ICF”) for each Combined Therapy Trial, (3) subject recruitment and retention activities, (4) ongoing site monitoring and quality assurance audits, (5) subject to the terms of the Pharmacovigilance Agreement, management of safety reporting by contract research organizations and clinical study sites, (6) ongoing medical monitoring, (7) management, monitoring and audits of CROs in connection with each CRO involved in the conduct of the Combined Therapy Trial, and (8) inquiries from clinical study subjects ((1)-(8), collectively, the “Operational Matters”). Five Prime shall use Commercially Reasonable Efforts to perform such Operational Matters.  The JDC shall set up a mechanism for BMS or a working team of the JDC to be informed and updated on a timely periodic basis regarding Operational Matters, so that if BMS has any concerns or disagreements regarding same, the matter can be escalated to the JDC for review.

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(b)Each Party shall be responsible for paying the full amount of any Third Party License Payments that it is obligated to pay pursuant to its agreement with a Third Party on account of the conduct of any Combined Therapy Trial or pursuant to Sections 4.1(a) or 4.2(a).

(c)Five Prime shall provide BMS with access to the Study Data in accordance with Sections 5.1(a)(xvi) and 5.1(a)(xvii).

(d)Five Prime, after discussion with BMS, will create and provide the JDC with a proposed list of potential clinical trial site(s), CROs and investigators that may be used to conduct each Combined Therapy Trial, with the final list to be subject to JDC (or Co-Chair) approval (such JDC-approved list being the “Site/CRO List”).  The proposed Site/CRO List will be provided to the JDC prior to Five Prime initiating site selection negotiations or visits (for sites/investigators) or CRO negotiations (for CROs).  Five Prime shall have the authority to select the final clinical trial sites, CROs and investigators from the Site/CRO List. In the event that additional sites need to be added after the initial list is approved, Five Prime will create a new CRO/Study Site List that includes the new sites and provide such list to the JDC for approval by the JDC (or Co-Chairs) per this Section 2.6(d).

2.7Alliance Managers.  Each of the Parties will appoint one representative to act as its Alliance Manager (each, an “Alliance Manager”).  The role of the Alliance Manager is to act as a primary point of contact between the Parties to assure a successful relationship between the Parties.  The Alliance Managers will attend all meetings of the JDC and support the JDC in the discharge of its responsibilities.  An Alliance Manager may bring any matter concerning a Party's performance under this Agreement to the attention of the JDC if the Alliance Manager reasonably believes that such attention is warranted.  Each Party may change its designated Alliance Manager from time to time upon written notice to the other Party.  Any Alliance Manager may designate a substitute to temporarily perform the functions of such Alliance Manager upon written notice to the other Party’s Alliance Manager.  Each Alliance Manager will be charged with creating and maintaining a collaborative work environment within the JDC.  Each Alliance Manager also will:

(a)be the point of first referral in all matters of dispute resolution in accordance with Section 13.3;

(b)provide a point of communication both internally within its respective Party’s organizations and between the Parties regarding the Combined Therapy Trials;

(c)assist in coordinating any collaborative efforts under this Agreement, if any, and any external communications; and

(d)take responsibility for ensuring that JDC activities, such as the conduct of required JDC meetings, occur as set forth in this Agreement and that relevant action items, if any, resulting from such meetings are appropriately carried out or otherwise addressed.

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2.8Dispute Resolution.  The representatives of the JDC shall attempt in good faith to reach consensus on all matters properly brought before the JDC.  Except as otherwise provided in this Agreement, if, after a good faith, reasonable and open discussion at a JDC meeting among the members of the JDC, the JDC is unable to agree on a matter within the scope of the JDC’s responsibilities as set forth in Section 2.4, that has been properly before the JDC for a period of at least *** and that calls for a decision, either Party may refer the dispute (a “JDC Dispute”) to the Executive Officers for resolution.  If the Executive Officers are unable to reach a resolution within *** of such referral, then the JDC Dispute will be referred to the Chief Executive Officer of Five Prime or his or her designee and the Chief Scientific Officer of BMS or his or her designee for attempted resolution by good faith negotiations within *** after such referral is made.  In the event such officers are unable to resolve such JDC Dispute within such *** period, then:

(a)if such JDC Dispute regards whether or not to commence any Combined Therapy Trial, then such Combined Therapy Trial shall not proceed absent mutual agreement of the Parties;

(b)if such JDC Dispute occurs subsequent to the commencement of any Combined Therapy Trial, and relates to either (1) an amendment requiring mutual agreement proposed by either Party to an agreed-upon Protocol or protocol synopsis, CRO Agreement, Bioanalysis Plan (not relating to the Dako Assay) or Statistical Analysis Plan with respect to such Combined Therapy Trial, or (2) any other matter relating to the strategy, conduct, rationale, or safety of such Combined Therapy Trial, there shall be no decision on the matter and the then-existing terms of the applicable Protocol, protocol synopsis, CRO Agreement, Bioanalysis Plan or Statistical Analysis Plan shall govern; or

(c)if such JDC Dispute is not addressed by Section 2.8(a) or (b), the dispute shall be resolved through arbitration as provided for in Section 13.3(c).  

2.9Conduct.  Each Party shall use Commercially Reasonable Efforts to perform and fulfill its respective activities under this Agreement, and shall do so in accordance with Applicable Law, including GCP, GLP and GMP.

 

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Article 3

LICENSE GRANTS

3.1Grant by BMS.  Subject to the terms of this Agreement, BMS hereby grants to Five Prime a non-exclusive, worldwide (other than within the Ono Territory), non-transferable, royalty-free license (with the right to sublicense solely pursuant to the terms of and subject to the limitations of Section 3.3) under the BMS Independent Patent Rights, BMS Technology, and BMS Regulatory Documentation to use the BMS Compound, solely to the extent necessary to (1) discharge Five Prime’s obligations under this Agreement with respect to the conduct of the Development Plan and (2) conduct any Subsequent Studies.

3.2Grant by Five Prime.  Subject to the terms of this Agreement, Five Prime hereby grants to BMS a non-exclusive, worldwide, non-transferable, royalty-free license (with the right to sublicense solely pursuant to the terms of and subject to the limitations of Section 3.3) under the Five Prime Independent Patent Rights, Five Prime Technology, and Five Prime Regulatory Documentation to use the Five Prime Compound, solely to the extent necessary to (1) discharge BMS’s obligations under this Agreement with respect to the conduct of the Development Plan and (2) conduct any Subsequent Studies.

3.3Sublicensing.

(a)Subject to Section 3.3(b) and Section 3.3(c), each Party shall have the right to grant sublicenses under the licenses granted to it under Section 3.1 to Affiliates and, if required for a Third Party to perform its duties with respect to the conduct of the Development Plan and any Subsequent Studies (and agreed to by the other Party, such consent not to be unreasonably withheld), to Third Parties, solely as necessary to assist a Party in carrying out its responsibilities with respect to the Development Plan and any Subsequent Studies.

(b)For the avoidance of doubt, in no event shall BMS (or any of its sublicensees) have the right to grant Ono or any of Ono’s Affiliates any sublicense under the license granted to BMS in Section 3.2.

(c)With regard to any such sublicenses permitted and made under this Agreement, (i) such sublicensees, except Affiliates (so long as they remain Affiliates of a Party), shall be subject to written agreements that bind such sublicensees to obligations that are consistent with a Party’s obligations under this Agreement including confidentiality and non-use provisions no less restrictive than those set forth in Sections 8.2 and 8.3 and Article 9, and provisions regarding intellectual property that ensure that the Parties will have the rights provided under this Agreement to any intellectual property created by such sublicensee, (ii) each Party shall provide written notice to the other of any such sublicense (and obtain approval for sublicenses to Third Parties); and (iii) the licensing Party shall remain liable for all actions of its sublicensees.

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3.4No Implied Licenses. Except as specifically set forth in this Agreement, neither Party shall acquire any license or other intellectual property interest, by implication or otherwise, in any intellectual property of the other Party, including Confidential Information disclosed to it under this Agreement or under any Patent Rights Controlled by the other Party or its Affiliates.

3.5Exclusivity.

(a)BMS and Five Prime will be exclusive collaborators with respect to each Restricted Combination, during the period such combination is a Restricted Combination (such period for such Restricted Combination, the “Exclusive Collaboration Period”).  During the Exclusive Collaboration Period for a Restricted Combination, neither Party will (i) conduct any clinical research in collaboration with a Third Party with respect to such Restricted Combination (for clarity, the foregoing shall not prohibit either Party from contracting with any clinical research organization or other Third Party engaged to operationalize the conduct of clinical research (e.g., drug depots, laboratories, drug product labelers, etc.)), or (ii) grant any right to a Third Party under its IND, BLA or other Regulatory Documentation for its Compound or under the Combined Therapy Trial IND during the Exclusive Collaboration Period for such Restricted Combination to enable a Third Party to research or develop such Restricted Combination, except as required by Applicable Law or as otherwise expressly permitted by this Agreement. The foregoing shall not (1) restrict or preclude either Party from conducting any clinical research, or other activities with respect to such Party’s Compound, including any combination studies, involving such Party’s Compound, other than those for a Restricted Combination in collaboration with a Third Party during the Exclusive Collaboration Period for such Restricted Combination, (2) restrict or preclude the out-license or sale of a Party’s Compound (provided that the licensee or acquirer of such Compound, as applicable, agrees to comply with the restrictions set forth herein), (3) subject to Section 3.5(b), restrict or prohibit either Party from conducting any Combined Therapy Trial, including in a Restricted Tumor Type, on its own (including through one or more clinical research organizations or other Third Parties engaged to operationalize the conduct of clinical research (e.g., drug depots, laboratories, drug product labelers, etc.)) or (4) restrict or preclude either Party from performing preclinical research in a Restricted Tumor Type regarding a Restricted Combination with any non-profit entities (including university and academic research institutions), provided that each Party shall share with the other Party any data generated from any such clinical research under subpart (3) and preclinical research under subpart (4) during the Exclusive Collaboration Period and, if requested by the other Party, hereby grants the other Party a nonexclusive license to use such data and any Technology, inventions and intellectual property rights made by the granting Party or such non-profit Third Party arising from such clinical research or preclinical research during the Exclusive Collaboration Period to the extent relating to a Restricted Combination, subject to any conditions and restrictions that apply to such granting Party’s use of such data, Technology, inventions, and intellectual property rights (“Permitted Clinical/Preclinical Research”).

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(b)Proposed Additional Non-Developed Studies; Non-Developed Tumor Types

(i)If one Party (for purposes of this Section 3.5(b) only, the “Proposing Party”) would like to conduct a clinical trial of a Restricted Indication  in a Tumor Type other than a Developed Tumor Type (for purposes of this Section 3.5(b) only, an “Additional Non-Developed Study”), the Proposing Party shall present the other Party (for purposes of this Section 3.5(b) only, “Other Party”) with a proposed protocol synopsis, substantially in the format of Exhibit B, for such Additional Non-Developed Study as a Combined Therapy. The Other Party shall have the right, which must be exercised (if at all) within *** after the later of (X) the date on which the Other Party has received the protocol synopsis and (Y) the Initial Results Date whether to participate in such Additional Non-Developed Study as a Combined Therapy under this Agreement, and, upon the election of the Other Party, the JDC shall amend the Development Plan to include the conduct of such Additional Non-Developed Study as a Combined Therapy Study, with the protocol (and any changes thereto) for the Proposed Study to be subject to approval by the JDC, and (for clarity), such Tumor Type shall become a Developed Tumor Type and a Restricted Tumor Type.

(ii)In the case the Other Party has declined to participate, but where material changes are made to the protocol for an Additional Non-Developed Study (relative to the protocol synopsis that was most recently reviewed by the Other Party) before it is initiated, such protocol and such Additional Non-Developed Study shall then be subject to a new review by the Other Party as a new proposal for an Additional Non-Developed Study (with the Other Party having the right to participate as set forth above, and otherwise review as set forth below).  Notwithstanding the foregoing, a change to the protocol for an Additional Non-Developed Study to substitute the Combined Therapy with a combination of (x) either (A) an anti-PD-1 antagonist molecule (including antibodies, peptides and chemical compounds) (other than Nivolumab) or (B) an anti-PD-L1 antagonist molecule (including antibodies, peptides and chemical compounds), together with (y) an anti-CSF1R antagonist molecule (including antibodies, peptides and chemical compounds), which combination is not a Combined Therapy, shall not be deemed a material change to the protocol for such Additional Non-Developed Study, and any revisions to such protocol necessary because such combination is not a Combined Therapy (e.g., changes in dosing frequency, changes in inclusion or exclusion criteria, etc.) shall not be deemed a material change to the protocol for such Additional Non-Developed Study.

(iii)In the event that, notwithstanding the procedure set forth above in clauses (i) and (ii) above, the Other Party declines to participate in such Additional Non-Developed Study, the Proposing Party may proceed with such study and, in such event, the applicable Tumor Type shall no longer be a Restricted Tumor Type.

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(c)Proposed Combined Therapy Studies; Parallel Studies

(i)If one Party (for purposes of this Section 3.5(c) only, the “Proposing Party”) would like to conduct a clinical trial of the Combined Therapy in a Developed Tumor Type, outside the scope of the Development Plan (for purposes of this Section 3.5(c) only, a “Proposed Study”), the Proposing Party shall present the other Party (for purposes of this Section 3.5(c) only, “Other Party”) with a proposed protocol synopsis, substantially in the format of Exhibit B, for such Proposed Study. The Other Party shall have the right, which must be exercised (if at all) within *** after the later of (X) the date on which the Other Party has received the protocol synopsis and (Y) the Initial Results Date whether to participate in such Proposed Study under this Agreement, and, upon the election of the Other Party, the JDC shall amend the Development Plan to include the conduct of such Proposed Study as a Combined Therapy Study, with the protocol (and any changes thereto) for the Proposed Study to be subject to approval by the JDC.

(ii)In the case the Other Party has declined to participate, but where material changes are made to the protocol for a Proposed Study (relative to the protocol synopsis that was most recently reviewed by the Other Party) before it is initiated, such protocol and Proposed Study shall then be subject to a new review by the Other Party as a new proposal for a Proposed Study (with the Other Party having the right to participate as set forth above, and otherwise review as set forth below).

(iii)In the case where the Other Party does not desire to participate in the Proposed Study under this Agreement or if the Other Party elects to participate but both Parties otherwise do not reach agreement with respect to the Protocol or amendment to the Development Plan with respect to the Proposed Study within *** following the Other Party’s decision to participate in the Proposed Study (but no later than *** from the receipt by the Other Party of the proposed protocol synopsis (as amended pursuant to clause (ii) above, if applicable) for the Proposed Study), the Proposing Party may proceed with the Proposed Study on its own (a “Parallel Study”), subject to the conditions set forth below:

(1)such Parallel Study is approved by all applicable IRBs, and is otherwise conducted in compliance with all Applicable Law;

(2)the Parallel Study shall not proceed if the Other Party has a reasonable significant safety objection to the conduct of the Parallel Study (unless and until such safety objection is addressed to the Other Party’s reasonable satisfaction);

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(3)unless the Parties agree otherwise in writing, the dosage and dosage regimen of the Other Party’s Compound to be used in the Parallel Study shall be within (i) the dosage and regimen in the approved label for such Compound (if such Compound is approved), (ii) the protocol-determined expansion dosage and regimen for such Compound in any Phase 1b Combined Therapy Trial, (iii) the final recommended Phase 2 dosage and regimen used for such Compound in any Phase 2 Combined Therapy Trial, (iv) the dosage and regimen then being used for such Compound in any on-going Phase 2 or Phase 3 clinical study then being conducted by the Other Party for its Compound or (v) such other dose and regimen that the Parties agree on;

(4)for Parallel Studies where Five Prime is the non-participating Other Party, the total number of subjects to be treated with Five Prime Compound in aggregate in all such Parallel Studies shall not exceed *** (such that the total amount of Five Prime Compound to be manufactured by Five Prime for all such Parallel Studies where Five Prime is the Other Party shall not exceed the amount required for the treatment of ***). BMS shall reimburse Five Prime for *** (without profit mark-up and determined in accordance with Five Prime’s customary practices in accordance with GAAP), ***;

(5)for Parallel Studies where BMS is the non-participating Other Party, the total number of subjects to be treated with BMS Compound in aggregate in all of such Parallel Studies shall not exceed *** (such that the total amount of BMS Compound to be manufactured by BMS for all such Parallel Studies where BMS is the Other Party shall not exceed the amount required for the treatment of ***). BMS shall supply the amount required for such Parallel Studies ***;

(6)the Proposing Party hereby grants to the Other Party a non-exclusive, worldwide, non-transferable, royalty-free license (with the right to sublicense solely pursuant to the terms of Section 3.3) to use any intellectual property generated as a result of a Parallel Study solely to the extent such intellectual property relates to such non-participating Other Party’s Compound;

(7)the Parties will enter into a mutually acceptable written supply agreement (a “Supply Agreement”) governing forecasting, ordering, procedures for acceptance and rejection, and other customary provisions for the supply of the Other Party’s Compound (giving the Parallel Study the same supply priority as the Other Party’s other clinical studies for the Compound), as well as a mutually acceptable quality agreement (in each case, the Parties to act in good faith and reasonably in finalizing such Supply and Quality Agreements);

(8)Exhibit D sets forth a list of possible countries in which Parallel Studies may be conducted, provided that a Party shall not be obligated to supply its Compound for use in a country listed on Exhibit D or otherwise if such Party’s Compound has not previously been made available for clinical or commercial use in such country;

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EXECUTION VERSION

 

(9)the Proposing Party shall indemnify, defend and hold harmless the Other Party against all third claims and any resulting liabilities, losses, damages, cost and expenses incurred by the Other Party arising out of such Third Party claims based on the use of the Other Party’s Compound in such Parallel Study, except to the extent attributable to (i) the Other Party’s Compound not meeting applicable specifications or (ii) the negligence or willful misconduct of the Other Party (with the indemnification procedures to follow those set forth in Section 11.3); and

(10)the Other Party hereby grants a non-exclusive, fully-paid (with the Other Party to be responsible for any Third Party Payments as may be owed in connection therewith relating to the use of the Other Party’s Compound) license under the intellectual property controlled by it and its Affiliates to enable the Proposing Party to conduct the Parallel Study.

For clarity, the Other Party’s Compound would be used in the form supplied and in no event would the formulation of the Other Party’s Compound be altered, except for purposes of packaging or labeling same for clinical purposes as long as regulatory requirements for use of same are met.

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EXECUTION VERSION

 

(iv)Subject to the above, the Other Party would provide the Proposing Party under the Supply Agreement with sufficient quantities of its Compound (subject to any forecasting, minimum order quantity, and similar provisions to be set forth in the Supply Agreement) to conduct the applicable Parallel Study and promptly provide written authorization to the FDA and other applicable regulatory authorities of the Proposing Party’s Right to Cross-Reference the appropriate INDs (including any Combined Therapy Trial IND) and other Regulatory Documentation of the Other Party for its Single Agent Compound as may be required for the conduct of the Parallel Study (subject to Applicable Law).  Subject to Section 3.5(b)(v), the same rights and obligations as set forth in this Agreement would apply with respect to each Parallel Study with respect to the use and disclosure of results, sharing of information, safety data exchange and patent rights in connection with the applicable Parallel Study (with such rights and obligations to be confirmed/restated in the Supply Agreement for such Parallel Study).  Accordingly, under the Supply Agreement for each Parallel Study (but subject to Section 3.5(b)(v)): (i) the Proposing Party will keep the Other Party informed of the progress of the Parallel Study; (ii) the Other Party shall be entitled to use the Combination Therapy Data from the Parallel Study to (1) submit regulatory filings and, subject to Section 3.5(b)(v), seek approvals for its own Compound, either alone or as part of a combination use therapy with the Proposing Party’s Compound and (2) following the applicable approval, to promote indications based on, and to disseminate, the Combination Therapy Data for the benefit of its own Compound, either alone or as part of the combination therapy with the Proposing Party’s Compound, where permitted by and in accordance with Applicable Law and (iii) in the case where a Party submits Combination Therapy Data for regulatory approval for the use of its Single Agent Compound in combination with the other Party’s Single Agent Compound (including any reference to the Combination Therapy Data in its label), then the Party seeking approval shall be granted by the other Party a  Right of Cross-Reference to the other Party’s Regulatory Documentation (including any INDs owned or controlled by it for any Combined Therapy Trials) solely to the extent required for such purpose.

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EXECUTION VERSION

 

(v)In the case where the Other Party for a Parallel Study elects to use the Combination Therapy Data from such Parallel Study in a regulatory filing in the FDA or European Medicines Agency (“EMA”) for its Compound for purposes of obtaining approval of an indication for the Combination Therapy for its Compound, and the Other Party obtains such regulatory approval for such Combination Therapy indication (i.e., such approved Combination Therapy indication is included in the label for its Compound allowing promotion of such indication), then the Other Party shall thereafter be obligated to pay to the Proposing Party an amount in aggregate equal to *** of the documented out-of-pocket payments (other than costs of drug supply) to clinical trial sites, CROs and other contractors reasonably incurred by the Proposing Party directly as a result of the conduct of the applicable Parallel Studies in such indication relied upon for the approval of the new indication (including costs for project management, document management, monitoring and site management, specimen management, laboratory, imaging, investigator grants, site costs, Compound labeling and storage, EDC, IVRS, consultants, contractors for the testing and screening of patients and lab costs) (for purposes of this Section 3.4(b)(v) only, such aggregate amount, the “Cost Sharing Payment”).  The Other Party shall pay the Proposing Party *** of the Cost Sharing Payment each year (without interest) (for purposes of this Section 3.4(b)(v) only, each such payment, a “Cost Sharing Installment”), such that the Cost Sharing Payment would be fully paid after *** Cost Sharing Installment payments, with the first payment to be made within *** after the date Regulatory Approval is obtained by the Other Party for such Combination Therapy indication and the next *** Cost Sharing Installments to be made within *** after each of the next *** of such Regulatory Approval.  For clarity, use of the Combination Therapy Data by the Other Party in a regulatory filing for safety reporting purposes (or other purposes that do not permit the promotion of its Compound for the Combination Therapy indication) shall not trigger any Cost Sharing Payment.

3.6Access to Information. During the period from the Effective Date until the date which is *** subsequent to the Initial Results Date, BMS shall have the right to conduct due diligence on the anti-CSF1R antagonist molecules (including antibodies, peptides and chemical compounds) Controlled by Five Prime, including the Five Prime Compound (the “Five Prime CSF1R Program”), in order to determine whether BMS is interested in exclusively licensing the right to develop and commercialize the Five Prime CSF1R Program.  In furtherance of the foregoing, if requested by BMS, Five Prime will disclose to BMS all material information and results relating to the Five Prime CSF1R Program as promptly as practicable after such information and results become available. Any such information and results shall be treated as Confidential Information of Five Prime hereunder. 

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EXECUTION VERSION

 

3.7Right of First Refusal.  If at any time prior to the date which is ninety (90) days subsequent to the Initial Results Date (such period, the “ROFR Offer Period”)  Five Prime determines that it wishes to out-license the right to commercialize the Five Prime CSF1R Program in any territory, Five Prime will promptly notify BMS in writing of same and the territory as to which the license will cover, and BMS will have the exclusive right to negotiate for the right to obtain an exclusive license to develop and commercialize the Five Prime CSF1R Program in such territory (the “Right of First Refusal”), for a period of three (3) months thereafter (the “ROFR Negotiation Period”); provided that the ROFR Negotiation Period shall be extended for any period during which Five Prime has not complied with Section 3.6 above.  For clarity, if the original notice is not for a worldwide license, then BMS’s rights shall remain in effect during the ROFR Offer Period with respect to the territory not covered by the original notice if Five Prime subsequently determines to expand the territory of the license. During the ROFR Negotiation Period, if requested by BMS, Five Prime will disclose to BMS all material information and results relating to the Five Prime CSF1R Program as promptly as practicable after such information and results become available. Any such information and results shall be treated as Confidential Information of Five Prime hereunder.   If BMS and Five Prime do not reach an agreement for such rights within the ROFR Negotiation Period, then Five Prime will be free to out-license any and all rights (subject to the terms of this Agreement) to the Five Prime CSF1R Program in such territory; provided, however, that Five Prime shall not out-license the right to commercialize the Five Prime CSF1R Program in such territory (including any modification to such territory than was previously considered by BMS) to a Third Party within the ninety (90) day period after the end of the ROFR Offer Period without first offering to BMS the same terms that such Third Party offered to Five Prime (with such terms being memorialized in a written term sheet or proposed definitive agreement) (such terms, “Third Party Terms”) and allowing BMS ten (10) Business Days to accept such Third Party Terms (the end of such ten (10) Business Day period, the “Final Match Date”).  In the event that Five Prime does not enter into a transaction with a Third Party with respect to the rights that are the subject of such Right of First Refusal within a period of *** subsequent to the Final Match Date or Five Prime does not receive (or make) an offer to any such Third Party that would give rise to the existence of any Third Party Terms and the ROFR Offer Period has not ended, then BMS rights under this Section 3.7 shall be reinstated for the remainder of the ROFR Offer Period, such that in the event that Five Prime determines that it wishes to out-license the right to commercialize the Five Prime CSF1R Program in any territory prior to the end of the ROFR Offer Period, Five Prime will again promptly notify BMS in writing of same and the territory as to which the license will cover, and BMS’s Right of First Refusal will once again apply on the same terms and conditions described above. 

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EXECUTION VERSION

 

3.8Right of First Negotiation.  During the Term and subsequent to the ROFR Offer Period, if Five Prime determines that it wishes to out-license the right to commercialize the Five Prime CSF1R Program in any territory, Five Prime will inform BMS in writing of same and the territory as to which the license will cover.  BMS will have an exclusive right to negotiate, for a period of three (3) months thereafter, to obtain exclusive rights to develop and commercialize the Five Prime CSF1R Program for such territory (the “ROFN Negotiation Period”).  During the ROFN Negotiation Period, if requested by BMS, Five Prime will disclose to BMS all material information and results relating to the Five Prime CSF1R Program as promptly as practicable after such information and results become available. Any such information and results shall be treated as Confidential Information of Five Prime hereunder.  Notwithstanding the foregoing, the ROFN Negotiation Period shall be extended for any period during which Five Prime has not complied with its obligations in the preceding sentence. If the original notice is not for a worldwide license, then BMS’s rights shall remain in effect with respect to the territory not covered by the original notice if Five Prime subsequently determines to expand the territory of the license.  If BMS does not exercise its right of first negotiation for such rights to the Five Prime CSF1R Program or if an agreement is not reached between BMS and Five Prime for such rights within the ROFN Negotiation Period, then Five Prime will be free to out-license any and all rights (subject to the terms of this Agreement) to the Five Prime CSF1R Program for such territory.

 

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EXECUTION VERSION

 

Article 4

MANUFACTURE AND SUPPLY

4.1Five Prime Compound.

(a)Manufacture and Supply.  Five Prime shall use Commercially Reasonable Efforts to Manufacture or have Manufactured the Five Prime Compound in drug product or drug substance form (as necessary) in reasonable quantities and at the points in time as agreed by the JDC for each Combined Therapy Trial.  The cost of Manufacture and supply (including shipping, insurance, taxes and duty, if applicable) of Five Prime Compound for the performance of the Development Plan (i) with respect to any Phase 1a Combined Therapy Trial, shall be borne solely by Five Prime, and (ii) with respect to any Phase 1b or later Combined Therapy Trial, fifty percent (50%) shall be borne by Five Prime and fifty percent (50%) shall be borne by BMS, and Five Prime shall bear the risk of loss for the Five Prime Compound.  Five Prime shall also be responsible for the payment of any Third Party License Payments that may be due exclusively on the supply of Five Prime Compound for the performance of the Development Plan.  The Five Prime Compound shall be Manufactured in accordance with Applicable Law (including GMP) and shall be of similar quality to the Five Prime Compound used by Five Prime for its other clinical trials of the Five Prime Compound.  Five Prime shall deliver to BMS certificates of analysis, and any other documents specified in the Quality Agreement, including such documentation as is necessary to allow BMS to compare the Five Prime Compound certificate of analysis to the Five Prime Compound specifications.  The Parties shall cooperate in accordance with Applicable Law to minimize indirect taxes (such as value added tax, sales tax, consumption tax and other similar taxes) relating to the Five Prime Compound in connection with this Agreement.

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EXECUTION VERSION

 

4.2BMS Compound.

(a)Manufacture and Supply.  BMS shall use Commercially Reasonable Efforts to Manufacture or have Manufactured the BMS Compound in drug substance and/or drug product form (as necessary) in reasonable quantities and at the points in time as agreed by the JDC for the performance of the Development Plan or as necessary for Permitted Clinical/Preclinical Research conducted by Five Prime, and shall supply such BMS Compound in unmarked vials to Five Prime or its designee for use in the Combined Therapy Trials or such Permitted Clinical/Preclinical Research.  Five Prime will package and label the BMS Compound for use in the Combined Therapy Trials or such Permitted Clinical/Preclinical Research, subject to Section 4.2(b).  The cost of Manufacture and supply (including shipping, insurance, taxes and duty, if applicable) of the BMS Compound shall be borne solely by BMS.  BMS shall bear the risk of loss for the BMS Compound until delivery of the BMS Compound to Five Prime or its designee.  BMS shall also be responsible for the payment of any Third Party License Payments that may be due to Ono or to others exclusively on the supply of BMS Compound hereunder for the performance of the Development Plan or Five Prime’s performance of Permitted Clinical/Preclinical Research.  The BMS Compound shall be Manufactured in accordance with Applicable Law (including GMP) and shall be of similar quality to the BMS Compound used by BMS for its other clinical trials of the BMS Compound.  BMS shall deliver certificates of analysis, and any other documents specified in the Quality Agreement, including such documentation as is necessary to allow Five Prime to compare the BMS Compound certificate of analysis to the BMS Compound specifications.  The Parties shall cooperate in accordance with Applicable Law to minimize indirect taxes (such as value added tax, sales tax, consumption tax and other similar taxes) relating to the BMS Compound in connection with this Agreement.  BMS will provide Five Prime with country-specific customs valuations for the BMS Compound, which Five Prime must use for deliveries to each country. Five Prime must request these valuations at least *** prior to each shipment through the BMS’s clinical supply organization.

(b)Packaging Costs for BMS Compound.  Notwithstanding Section 4.2(a), *** (“Section 4.2(b) Costs”).  For purposes of this Agreement, “Packaging and Labeling Costs” shall be in accordance with its customary practices in accordance with GAAP, without labor,  profit or mark-up.

(c)Use of BMS Compound Supplied by BMS to Five Prime.  Five Prime shall use the quantities of BMS Compound supplied to it under this Agreement solely as necessary for, and in accordance with, this Agreement and the Development Plan, and for no other purpose, including as a reagent or tool to facilitate its internal research efforts, for any commercial purpose, or for other research unrelated to the performance of the Development Plan.  Except as may be required under this Agreement, the Development Plan or a Bioanalysis Plan, Five Prime shall not perform, and shall not allow any Third Parties to perform, any analytical testing of the quantities of BMS Compound supplied to it under this Agreement.

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EXECUTION VERSION

 

4.3Quality Agreement.  Within *** after the Effective Date, but in no event later than the date on which the first shipment of bulk BMS Compound is supplied for use in the performance of the Development Plan, the Parties shall enter into a quality agreement (the “Quality Agreement”). The Quality Agreement shall outline the additional roles and responsibilities relative to the quality of BMS Compound in support of the Combined Therapy Trials. The Quality Agreement shall include the responsibility for quality elements including, by way of example, audits & inspections, sub-contractors and suppliers, change control, results that are outside of specifications, deviations and investigations required to conduct the activities set forth in the Development Plan.  In addition, the Quality Agreement shall detail the documentation required for each shipment of BMS Compound supplied to Five Prime or its designee for use in the performance of the Development Plan. The Quality Agreement shall also indicate whether any required transfer from BMS to Five Prime of analytical methods will be necessary to support identity testing of the BMS Compound by Five Prime.

 

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EXECUTION VERSION

 

Article 5

RESPONSIBILITIES

5.1Specific Responsibilities of the Parties.  Subject to the terms of this Agreement, each Party shall use Commercially Reasonable Efforts to (i) supply the quantities of its Compound as needed to conduct the activities set forth in the Development Plan on a timely basis, and package and deliver same to study sites, in accordance with the time frame(s) established by the JDC; (ii) to conduct and complete each Combined Therapy Trial and any Statistical Analysis Plans and Bioanalysis Plans relating thereto on a timely basis in accordance with the Development Plan, Bioanalysis Plans, Statistical Analysis Plans and Third Party agreements relating thereto, and (iii) to timely provide Rights of Cross-Reference where required by this Agreement.

Each Party shall be responsible for activities assigned to it under the Development Plan that such Party is not otherwise obligated to perform by this Agreement, provided that, except as set forth in this Agreement, in no event shall either Party be obligated to perform any such assigned activities without its prior written consent.  As of the Effective Date, each Party shall be responsible for the following activities:

(a)Responsibilities of Five Prime.  Subject to JDC direction and oversight as provided in Section 2.4, Five Prime shall be responsible for the following activities, in each case (except as expressly provided in Section 4.1(a) with respect to the Manufacture and supply of the Five Prime Compound) in accordance with Section 7.2:

(i)(A) manufacturing, packaging and labeling GMP-grade quantities of the Five Prime Compound and of the Combined Therapy for use in the performance of the Development Plan, (B) packaging and labeling the vials provided by BMS of the BMS Compound for use in the performance of the Development Plan, and (C) providing the JDC (or a working team designated by the JDC) on a monthly basis with a clinical drug supply forecast for the BMS Compound and the Five Prime Compound that includes strategy for drug supply overages, drug supply quantity and required delivery dates;

(ii)with the cooperation of BMS, compiling, amending and filing all necessary Combined Therapy Trial Regulatory Documentation with Regulatory Authority(ies), maintaining and acting as the sponsor of record as provided in 21 CFR 312.50 (and applicable comparable ex-US laws) with responsibility, unless otherwise delegated in accordance with 21 CFR 312.52 (and applicable comparable ex-US laws), for each Combined Therapy Trial and making all required submissions to Regulatory Authorities related thereto on a timely basis;

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EXECUTION VERSION

 

(iii)with BMS cooperation, and subject to the provisions of Section 9.5, listing any Combined Therapy Trial required to be listed on a public database on www.clinicaltrials.gov or other public registry in any country in which such Combined Therapy Trial is being conducted in accordance with Applicable Law and in accordance with each Party’s internal policies relating to clinical trial registration;

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

(v)providing to BMS (1) a written summary of meetings or other non-written communications with a Regulatory Authority within *** of such meeting or communication, (2) copies of any official correspondence to or from a Regulatory Authority within *** of receipt or provision, in each case to the extent that it relates to the Combined Therapy or the BMS Compound (or to the extent the communication would adversely impact the performance of the Development Plan or the Five Prime Compound), and (3) copies of all Combined Therapy Trial Regulatory Documentation that relate to the Combined Therapy or the BMS Compound within *** of submission to Regulatory Authorities;

(vi)drafting, and, subject to Sections 2.4 and 2.6(d), providing to BMS (through the JDC or otherwise) for its review, each Protocol and investigator’s brochure for a Combined Therapy Trial, and the related template ICF, template clinical site agreement, Bioanalysis Plan (other than the Dako Assay) and Statistical Analysis Plan, and any amendments to each of the foregoing (provided that BMS shall provide Five Prime with any comments within *** of the date on which Five Prime provides the applicable document to BMS);

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EXECUTION VERSION

 

(vii)coordinating with BMS and providing to the JDC (or a subcommittee designated by the JDC for such purpose) *** in advance of submission, drafts of (1) submissions to the Combined Therapy IND (if applicable); and (2) Combined Therapy Trial Regulatory Documentation, or portions thereof, that relate to the Combined Therapy or the BMS Compound, for JDC review and approval, and providing BMS with the opportunity to review and comment on all other written correspondence with a Regulatory Authority relating to the Combined Therapy Trials, to the extent such correspondence relates to the Combined Therapy, and to approve such written correspondence to the extent such correspondence relates to the BMS Compound; provided that BMS shall provide Five Prime with written notice of any such comments (and, where applicable, approvals or rejections) within *** of the date on which Five Prime provides the applicable document to BMS;

(viii)to the extent necessary for the conduct of any Combined Therapy Trial, providing a Right of Cross-Reference to the relevant Regulatory Documentation for the Five Prime Compound, provided that, such Right of Cross-Reference shall terminate upon the expiration or termination of this Agreement for purposes of conducting any new clinical studies (other than Subsequent Studies and except as otherwise expressly provided in this Agreement), except that in the case of termination for a Material Safety Issue pursuant to Section 12.4, such Right of Cross-Reference shall remain in effect solely (1) to the extent necessary to permit Five Prime to comply with any outstanding obligations required by a Regulatory Authority and/or Applicable Law or (2) as necessary to permit Five Prime to continue to dose subjects enrolled in each Combined Therapy Trial through completion of the applicable Protocol if required by the applicable Regulatory Authority(ies) and/or Applicable Laws;

(ix)managing the operations of the Combined Therapy Trials in accordance with the Development Plan, including overseeing compliance by any CRO with the terms of its agreement with Five Prime relating to the Combined Therapy Trial;

(x)subject to Sections 2.4 and 2.6(d), providing to BMS a list of all proposed clinical trial sites and principal investigator(s) for each Combined Therapy Trial;

(xi)subject to Sections 2.4 and 2.6(d), ensuring that all clinical trial service agreements and clinical trial site agreements (A) contain intellectual property provisions that retain each of the Parties’ respective intellectual property rights in the Five Prime Compound, BMS Compound and Combined Therapy, and (B) allow for BMS, as well as Five Prime, to the extent permitted by Applicable Law and any Third Party confidentiality restrictions or obligations, to audit Combined Therapy Trial study sites for quality assurance and to inspect and copy all data, documentation and work products relating to the activities performed by the site, including the medical records of any patient participating in any clinical study.  This right to inspect and copy all data, documentation, and work product of a study site may be exercised at any time during the Term, or such longer period as shall be required by Applicable Law;

(xii)providing BMS with copies of each final site template ICF (if requested by BMS);

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EXECUTION VERSION

 

(xiii)providing BMS with minutes from any and all external drug safety monitoring boards for the Combined Therapy Trials, if applicable, within *** (or as soon as practicable) after receipt by Five Prime;

(xiv)providing BMS with updates on the status of the Combined Therapy Trials at each teleconference for the clinical execution working group, or upon BMS’s reasonable request, including information regarding the number and status of study sites, the number of screened subjects (actual to target), the number of randomized subjects (actual to target), the number of dosed, ongoing, discontinued and completed subjects, and any safety updates as contemplated by the Development Plan, Section 2.1(c), and/or routinely performed by a Party in its normal course of trial management and reporting;

(xv)subject to the provisions of Section 2.2 and the Pharmacovigilance Agreement, owning and being responsible for (or appointing a Third Party reasonably acceptable to BMS to be responsible for) the maintenance of the Global Safety Database and safety reporting for the Combined Therapy, collecting, evaluating and reporting serious adverse events, other safety data and any further pharmacovigilance information from the Combined Therapy Trials, and providing BMS with the opportunity to participate in and comment on such pharmacovigilance activities;

(xvi)providing BMS with access to all safety information (including any updates to the investigator’s brochure for the Five Prime Compound) in the safety databases through the provision of case safety reports and listings related to the Combined Therapy or the BMS Compound during the Combined Therapy Trials in accordance with Section 2.2 and the Pharmacovigilance Agreement;

(xvii)analyzing the Study Data in a timely fashion and providing BMS with access to the Study Data from the applicable Combined Therapy Trial as follows:

(1)pursuant to an appropriate timetable determined by the JDC: (A) sharing with BMS for review and comment drafts of interim and/ or final clinical trial reports (and/or statistical analyses in accordance with the Statistical Analysis Plan) from each Combined Therapy Trial and (B) providing the raw Study Data in electronic or other agreed format;

(2)within *** after Database Lock, access to safety databases that will be used for an interim review by an external consultant (or drug safety monitoring board, if required) to be agreed upon by the Parties;

(3)within *** after Database Lock, access to case report forms or patient profiles for all patients in each Combined Therapy Trial;

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EXECUTION VERSION

 

(4)within *** of the creation of a clean database for the Combined Therapy Trial, copies of the Form 1572s, financial disclosures and other relevant documents required to meet regulatory requirements related to the Combined Therapy Trials (including any data or documents that may be required to provide Aggregate Safety Information to a Regulatory Authority with respect to the BMS Compound);

(5)within *** of the creation of an electronic clean database for the Combined Therapy Trial, an electronic copy of the clean database (it being understood that the form and format of the clean database must be reasonably acceptable to both Parties and shall be determined by the JDC); and

(6)providing BMS with any programs or SAS codes to be used for the Statistical Analysis Plan for the Combined Therapy Trial;

(xviii)obtaining supplies of any co-medications, to the extent any such co-medications are required for use in any Combined Therapy Trial, and providing to BMS any information related to each Combined Therapy Trial that is provided to the manufacturer of any co-medication pursuant to Section 9.5 within *** after the provision of the information to the manufacturer;

(xix)providing BMS with any information regarding the pharmacokinetics, efficacy and safety of the BMS Compound alone or in combination with the Five Prime Compound;

(xx)providing for the release by a Qualified Person (as such term will be defined in the Quality Agreement), or providing the necessary documentation in support of such quality release, of the Five Prime Compound if such release is required for any Combined Therapy Trial;

(xxi)performing either directly or through Third Parties the collection of Samples; and

(xxii)such other responsibilities as may be agreed to by the Parties or determined by the JDC.

(b)Responsibilities of BMS.  Subject to JDC direction as provided in Section 2.4, BMS shall be responsible for the following activities, subject in each case (except as expressly provided in Section 4.2(a) with respect to the Manufacture and supply of the BMS Compound and any Third Party License Payments due Ono) to sharing by the Parties of the Third Party Study Costs related to such activities in accordance with Section 7.2:

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EXECUTION VERSION

 

(i)manufacturing and supplying GMP-grade quantities of unlabeled vials of the BMS Compound, as further described in Article 4, and providing for the release by a Qualified Person or providing the necessary documentation in support of quality release, of the BMS Compound if such release is required for the Combined Therapy Trial;

(ii)promptly reviewing each Protocol, the BMS and Five Prime investigator’s brochures for each Combined Therapy Trial (as it relates to the BMS Compound and the Combined Therapy), any template ICF, Bioanalysis Plan and Statistical Analysis Plan, and any amendments to each of the foregoing (provided that BMS shall provide Five Prime with written notice of any such comments within *** of the date on which Five Prime provides the applicable document to BMS;

(iii)to the extent necessary for the conduct of any Combined Therapy Trial, providing a Right of Cross-Reference to the relevant Regulatory Documentation for the BMS Compound, provided that, except as provided in Section 3.2, such Right of Cross-Reference shall terminate upon the expiration or termination of this Agreement for purposes of conducting any new clinical studies (other than Subsequent Studies and except as otherwise expressly provided in this Agreement), except that in the case of termination for a Material Safety Issue pursuant to Section 12.4, such Right of Cross-Reference shall remain in effect solely (1) to the extent necessary to permit Five Prime to comply with any outstanding obligations required by a Regulatory Authority and/or Applicable Law or (2) as necessary to permit Five Prime to continue to dose subjects enrolled in each Combined Therapy Trial through completion of the applicable Protocol if required by the applicable Regulatory Authority(ies) and/or Applicable Laws;

(iv)jointly reviewing, providing comments to Five Prime within *** on, and (if inconsistent with the Development Plan) approving all Combined Therapy Trial Regulatory Documentation and providing Five Prime with copies of BMS Regulatory Documentation, as both Parties agree is necessary or reasonably expected to be necessary, and is requested by Five Prime, (1) to obtain and maintain the IND for the Combined Therapy Trials and prepare and file any Combined Therapy Trial Regulatory Documentation in accordance with this Agreement, or (2) to comply with Applicable Law with regard to the Five Prime Compound and the Combined Therapy Trials, which may include information regarding the pharmacokinetics, efficacy and safety of the BMS Compound alone or in combination with the Five Prime Compound (provided that BMS shall provide Five Prime with written notice of any such comments (and, where applicable, approvals or rejections) within *** of the date on which Five Prime provides the applicable document to BMS;

(v)providing comment and input on the management of each Combined Therapy Trial pursuant to the Development Plan;

(vi)reviewing and, if applicable, suggesting alternatives to Five Prime’s proposed list of clinical trial sites and principal investigator(s) for each Combined Therapy Trial;

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EXECUTION VERSION

 

(vii)providing Five Prime with access to an investigator’s brochure for the BMS Compound as determined by BMS (and any updates thereto), as well as all relevant safety information (including any SUSAR reports) for the BMS Compound in accordance with the Pharmacovigilance Agreement;

(viii)managing and providing funding for the development of the Dako Assay (and, to the extent required by the Protocol, providing Five Prime with access to the results of the Dako Assay);

(ix)providing and making available as necessary information and/or persons with knowledge concerning the BMS Compound to support the performance of the Development Plan, including any interactions with a Regulatory Authority; and

(x)such other responsibilities as may be agreed to by the Parties or determined by the JDC.

5.2Documents and Combined Therapy Trial Contracts.

(a)The Parties agree that Five Prime bears primary responsibility for conduct of each Combined Therapy Trial and the analysis of the Study Data under the applicable Statistical Analysis Plan.  In consultation with BMS, Five Prime shall draft the Protocols and Statistical Analysis Plans, and any amendments to each of the foregoing, and shall provide such documents to BMS for review and comment pursuant to Section 5.1(a)(vi) and Sections 2.4 and 2.6(d).  BMS shall have *** from the date on which Five Prime provides the applicable document to BMS to provide any comments to Five Prime concerning the applicable draft Protocol or Statistical Analysis Plan, or any amendment to each of the foregoing.

(b)Subject to Sections 2.4 and 2.6(d), Five Prime shall be responsible for negotiating and entering into contracts for services relating to the activities contemplated under the Development Plan, including selecting vendors, approving contract deliverables and managing contract performance, including site contracts, obtaining IRB approval for site ICFs, obtaining signed informed consents, monitoring plans, etc. Five Prime will be responsible for ensuring that any such contracts allow Five Prime to provide BMS with access to and use of Study Data, Samples, and other information and documents as required pursuant to this Agreement (and in no event not less than the same access or use as is granted Five Prime).

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5.3Other Clinical Trials.  Except for the Combined Therapy Trials, each clinical trial for the BMS Compound and the Five Prime Compound, alone or in combination with other pharmaceutical agents, is independently conducted and shall not be subject to this Agreement (but without limiting each Party’s obligation to share relevant safety information as provided in Section 2.1(c), Section 2.1(d) and Section 2.2 and to comply with its obligations with respect to any Subsequent Studies).  BMS Compound provided to Five Prime under this Agreement shall not be used for such other clinical trials.  Except as provided in Section 3.5, nothing in this Agreement shall preclude either Party from conducting any such other clinical trials as it may determine in its discretion, so long as it does not use or rely on the Confidential Information of the other Party in doing so.

5.4Additional Studies. After completion of a Combined Therapy Trial in a Developed Tumor Type, the Parties agree to discuss in good faith additional clinical trials (other than clinical trials contemplated by Section 2.1(a)) of the Combined Therapy in such Developed Tumor Type for a period of up to *** after such Developed Tumor Type ceases being a Restricted Tumor Type.  If the Parties jointly agree to conduct any such further clinical trials of such Combined Therapy in such Developed Tumor Type, such further clinical trials will be conducted in accordance with a separate agreement between the Parties and a revised Pharmacovigilance Agreement between the Parties (such revised Pharmacovigilance Agreement to be executed *** after the execution of the separate agreement but in any case before the initiation of any further clinical trials).  For clarity, no Party shall be obligated to collaborate with the other Party or agree on terms with the other Party with respect to such additional clinical trials, except as follows:

(a)The provisions as set forth below shall only be in effect (and the Parties will only have the rights set forth below) with respect to each Subsequent Study in an indication that was a Developed Tumor Type for which the proposed protocol synopsis has been submitted by the Proposing Party to the Other Party (as set forth below) by the earlier of (i) *** after such indication ceased being a Restricted Tumor Type and (ii) the date that the Compounds of both parties have been approved in the U.S. and are commercially available for purchase (such earlier date, the “Subsequent Study Request Deadline”); provided that the proposed Subsequent Study must be commenced (first patient first visit) within *** of such protocol synopsis being provided to the Other Party; provided further that, in the event of termination of this Agreement, the provisions as set forth below shall only be in effect for a Proposing Party (and the Proposing Party will only have the rights set forth below) to the extent that Section 12.5 provides that the Proposing Party’s license to conduct Subsequent Studies under Section 3.1 or Section 3.2 (as applicable) survives such termination of this Agreement.

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(b)If one Party (for purposes of this Section 5.4 only, the “Proposing Party”) would like to conduct one or more clinical or required non-clinical studies of the use of the Combined Therapy in a Developed Tumor Type (each study being a “Subsequent Study”), the Proposing Party shall provide the other Party (for purposes of this Section 5.4 only, the “Other Party”) with a proposed protocol synopsis for such proposed Subsequent Study and the opportunity to participate in such Subsequent Study by the Subsequent Study Request Deadline. The Other Party shall have the right, which must be exercised (if at all) within *** after receipt of the protocol synopsis, to co-participate in and co-fund the proposed Subsequent Study under the same terms and conditions as the Agreement and, upon the election of the Other Party, the Parties shall enter into an agreement for the conduct of such Subsequent Study having substantially the same terms and conditions as this Agreement (the “Subsequent Study Agreement”), with the protocol (and any changes thereto) for the Subsequent Study to be subject to agreement of both parties and with the Proposing Party to be the sponsor of and primarily be responsible for conducting the Subsequent Study (i.e., as Five Prime is doing for the Combined Therapy Trials under the Development Plan).  Any such Subsequent Study that the Parties co-participate in and co-fund is referred to in this Agreement as a “Joint Subsequent Study.”

(c)In the case the Other Party has declined to participate, but where material changes are made to the protocol for a proposed Subsequent Study (relative to the protocol synopsis that was most recently reviewed by the Other Party) before it is initiated, such protocol and Subsequent Study shall then be subject to a new review by the Other Party as a new proposal for a Subsequent Study (with the Other Party having the right to co-participate and co-fund set forth above, and otherwise review as set forth below).

(d)In the case where the Other Party does not desire to co-participate and co-fund the proposed Subsequent Study under a Subsequent Study Agreement or, if the Other Party elected to participate but both Parties otherwise do not reach agreement with respect to the Protocol or Subsequent Study Agreement within *** following the Other Party’s decision to participate in the proposed Subsequent Study (but no later than *** from the receipt by the Other Party of the proposed protocol synopsis (as amended pursuant to clause (c) above, if applicable) for the proposed Subsequent Study), the Proposing Party may proceed with the Subsequent Study, subject to the following conditions:

(i)such Subsequent Study is approved by all applicable IRBs, and is otherwise conducted in compliance with all Applicable Law;

(ii)the Subsequent Study shall not proceed if the Other Party has a reasonable significant safety objection to the conduct of the Subsequent Study (unless and until such safety objection is addressed to the Other Party’s reasonable satisfaction);

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(iii)unless the Parties agree otherwise in writing, the dosage and dosage regimen of the Other Party’s Compound to be used in the Subsequent Study shall be within (A) the dosage and regimen in the approved label for such Compound (if such Compound is approved), (B) the protocol-determined expansion dosage and regimen for such Compound in any Phase 1b Combined Therapy Trial, (C) the final recommended Phase 2 dosage and regimen used for such Compound in any Phase 2 Combined Therapy Trial, (D) the dosage and regimen then being used for such Compound in any on-going Phase 2 or Phase 3 clinical study then being conducted by the Other Party for its Compound or (E) such other dose and regimen that the Parties agree on;

(iv)for the Subsequent Studies where Five Prime is the non-participating Other Party, the total number of subjects to be treated with Five Prime Compound in aggregate in all such Subsequent Studies shall not exceed *** (such that the total amount of Five Prime Compound to be manufactured by Five Prime for all such Subsequent Studies where Five Prime is the Other Party shall not exceed the amount required for the treatment of ***). BMS shall reimburse Five Prime for *** (without profit mark-up and determined in accordance with Five Prime’s customary practices in accordance with GAAP), ***;

(v)for the Subsequent Studies where BMS is the non-participating Other Party, the total number of subjects to be treated with BMS Compound in aggregate in all of such Subsequent Studies shall not exceed *** (such that the total amount of BMS Compound to be manufactured by BMS for all such Subsequent Studies where BMS is the Other Party shall not exceed the amount required for the treatment of ***). BMS shall supply the amount required for such Subsequent Studies ***;

(vi)the Proposing Party hereby grants to the Other Party a non-exclusive, worldwide, non-transferable, royalty-free license (with the right to sublicense solely pursuant to the terms of Section 3.3) to use any intellectual property generated as a result of a Subsequent Study solely to the extent such intellectual property relates to such non-participating Other Party’s Compound;

(vii)the Parties will enter into a mutually acceptable written Supply Agreement for the supply of the Other Party’s Compound (giving the Subsequent Study the same supply priority as the Other Party’s other clinical studies for the Compound), as well as a mutually acceptable quality agreement (in each case, the Parties to act in good faith and reasonably in finalizing such Supply and Quality Agreements);

(viii)Exhibit D sets forth a list of possible countries in which the Subsequent Studies may be conducted, provided that a Party shall not be obligated to supply its Compound for use in a country listed on Exhibit D or otherwise if such Party’s Compound has not previously been made available for clinical or commercial use in such country;

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(ix)the Proposing Party shall indemnify, defend and hold harmless the Other Party against all third claims and any resulting liabilities, losses, damages, cost and expenses incurred by the Other Party arising out of such Third Party claims based on the use of the Other Party’s Compound in such Subsequent Study, except to the extent attributable to (i) the Other Party’s Compound not meeting applicable specifications or (ii) the negligence or willful misconduct of the Other Party (with the indemnification procedures to follow those set forth in Section 11.3); and

(x)the Other Party hereby grants a non-exclusive, fully-paid (with the Other Party to be responsible for any Third Party Payments as may be owed in connection therewith relating to the use of the Other Party’s Compound) license under the intellectual property controlled by it and its Affiliates to enable the Proposing Party to conduct the Subsequent Study.

For clarity, the Other Party’s Compound would be used in the form supplied and in no event would the formulation of the Other Party’s Compound be altered, except for purposes of packaging or labeling same for clinical purposes as long as regulatory requirements for use of same are met.

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EXECUTION VERSION

 

(e)Subject to the above, the Other Party would provide the Proposing Party under the Supply Agreement with sufficient quantities of its Compound (subject to any forecasting, minimum order quantity, and similar provisions to be set forth in the Supply Agreement) to conduct the applicable Subsequent Study and promptly provide written authorization to the FDA and other applicable regulatory authorities of the Proposing Party’s Right to Cross-Reference the appropriate INDs (including any Combined Therapy Trial IND) and other Regulatory Documentation of the Other Party for its Single Agent Compound as may be required for the conduct of the Subsequent Study (subject to Applicable Law).  Subject to Section 5.4(f), the same rights and obligations as set forth in the Agreement would apply with respect to each Subsequent Study with respect to the use and disclosure of results, sharing of information, safety data exchange and patent rights in connection with the applicable Subsequent Study (with such rights and obligations to be confirmed/restated in the Supply Agreement for such Subsequent Study).  Accordingly, under the Supply Agreement for each Subsequent Study (but subject to Section 5.4(f)): (i) the Proposing Party will keep the Other Party informed of the progress of the Subsequent Study; (ii) the Other Party shall be entitled to use the Combination Therapy Data from the Subsequent Study to (1) submit regulatory filings and, subject to Section 5.4(f), seek approvals for its own Compound, either alone or as part of a combination use therapy with the Proposing Party’s Compound and (2) following the applicable approval, to promote indications based on, and to disseminate, the Combination Therapy Data for the benefit of its own Compound, either alone or as part of the combination therapy with the Proposing Party’s Compound, where permitted by and in accordance with Applicable Law and (iii) in the case where a Party submits Combination Therapy Data for regulatory approval for the use of its Single Agent Compound in combination with the other Party’s Single Agent Compound (including any reference to the Combination Therapy Data in its label), then the Party seeking approval shall be granted by the other Party a  Right of Cross-Reference to the Other Party’s Regulatory Documentation (including any INDs owned or controlled by it for any Combined Therapy Trials) solely to the extent required for such purpose.

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EXECUTION VERSION

 

(f)In the case where the non-participating Other Party for a Subsequent Study elects to use the Combination Therapy Data from such Subsequent Study in a regulatory filing in the FDA or EMA for its Compound for purposes of obtaining approval of an indication for the Combination Therapy for its Compound, and the non-participating Other Party obtains such regulatory approval for such Combination Therapy indication (i.e., such approved Combination Therapy indication is included in the label for its Compound allowing promotion of such indication), then the Other Party shall thereafter be obligated to pay to the Proposing Party an amount in aggregate equal to *** of the documented out-of-pocket payments (other than costs of drug supply) to clinical trial sites, CROs and other contractors reasonably incurred by the Proposing Party directly as a result of the conduct of the applicable Subsequent Studies in such indication relied upon for the approval of the new indication (including costs for project management, document management, monitoring and site management, specimen management, laboratory, imaging, investigator grants, site costs, Compound labeling and storage, EDC, IVRS, consultants, contractors for the testing and screening of patients and lab costs) (for purposes of this Section 5.4(f) only, such aggregate amount, the “Cost Sharing Payment”).  The Other Party shall pay the Proposing Party *** of the Cost Sharing Payment each year (without interest) (for purposes of this Section 3.4(b)(v) only, each such payment, a “Cost Sharing Installment”), such that the Cost Sharing Payment would be fully paid after *** Cost Sharing Installment payments, with the first payment to be made within *** after the date Regulatory Approval is obtained by the Other Party for such Combination Therapy indication and the next *** Cost Sharing Installments to be made within *** after each of the next *** of such Regulatory Approval.  For clarity, use of the Combination Therapy Data by the Other Party in a regulatory filing for safety reporting purposes (or other purposes that do not permit the promotion of its Compound for the Combination Therapy indication) shall not trigger any Cost Sharing Payment.

 

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Article 6

INTELLECTUAL PROPERTY

6.1Inventions.  All rights to Inventions shall be allocated as follows:

(a)Five Prime Ownership.  Subject to the terms of this Agreement, all Five Prime Study Inventions shall be owned solely by Five Prime, and Five Prime will have the full right to exploit such Five Prime Study Inventions without the consent of, or any obligation to account to, BMS.  BMS shall assign and hereby assigns (and shall cause its Affiliates and contractors to assign) all right, title and interest in any Five Prime Study Inventions to Five Prime.  Any assignments necessary to accomplish the foregoing are hereby made, and BMS shall execute such further documents and provide other assistance as may be reasonably requested by Five Prime to perfect Five Prime’s rights in such Five Prime Study Inventions, all at Five Prime’s expense. Five Prime shall have the sole right but not the obligation to prepare, file, prosecute (including any proceedings relating to reissues, reexaminations, protests, interferences, oppositions, post-grant reviews or similar proceedings and requests for patent extensions) and maintain any Five Prime Study Patent Rights at its own expense.

(b)BMS Ownership.  Subject to the terms of this Agreement, all BMS Study Inventions shall be owned solely by BMS, and BMS will have the full right to exploit such BMS Study Inventions without the consent of, or any obligation to account to, Five Prime.  Five Prime shall assign and hereby assigns (and shall cause its Affiliates and contractors to assign) all right, title and interest in any BMS Study Inventions to BMS.  Any assignments necessary to accomplish the foregoing are hereby made, and Five Prime shall execute such further documents and provide other assistance as may be reasonably requested by BMS to perfect BMS’s rights in such BMS Study Inventions, all at BMS’s expense. BMS shall have the sole right but not the obligation to prepare, file, prosecute (including any proceedings relating to reissues, reexaminations, protests, interferences, oppositions, post-grant reviews or similar proceedings and requests for patent extensions) and maintain any BMS Study Patent Rights at its own expense.

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EXECUTION VERSION

 

(i)Combined Therapy Inventions.  All Combined Therapy Inventions shall be jointly owned by the Parties, and either Party shall have the right to freely exploit the Combined Therapy Inventions and Combined Therapy Patent Rights, both within and outside the scope of this Agreement, without accounting or any other obligation to the other Party (except as expressly set forth in this Section 6.1(c) and Section 6.3(d) with regard to the filing, prosecution, maintenance and enforcement of Combined Therapy Patent Rights) and each Party may use, exploit and grant licenses (with the right to sublicense) to Third Parties under its interest in such Combined Therapy Inventions and Combined Therapy Patent Rights.  The Parties shall agree as to which Party, using outside counsel acceptable to both Parties, shall be responsible for preparing and prosecuting Patent applications and maintaining Patents within the Combined Therapy Patent Rights.  The Party drafting and prosecuting any Combined Therapy Patent Right (the “Prosecuting Party”) shall keep the other Party (the “Non-Prosecuting Party”) advised as to material developments and all steps to be taken with respect to any such Patents and shall furnish the Non-Prosecuting Party with copies of applications for such Patents, amendments thereto and other related correspondence to and from Patent offices, and permit the Non-Prosecuting Party a reasonable opportunity to review and offer comments.  The Non-Prosecuting Party shall reasonably assist and cooperate in obtaining, prosecuting and maintaining the Combined Therapy Patent Rights.  Notwithstanding the foregoing, the Prosecuting Party shall not take any position in a submission to a Patent office that interprets the scope of a Patent or Patent application of the Non-Prosecuting Party without the prior written consent of such Non-Prosecuting Party.  The Prosecuting Party shall be reimbursed for any costs and expenses incurred in prosecuting Combined Therapy Patent Rights and the subsequent maintenance of Combined Therapy Patent Rights by the Non-Prosecuting Party such that BMS shall be responsible for *** of such costs and Five Prime shall be responsible for *** of such costs.  In case one of the two Parties decides not to file or maintain a Combined Therapy Patent Right application in a given country (and also elects not to reimburse the other Party for *** of the costs of prosecution and maintenance of such Combined Therapy Patent Right in such country), the other Party shall have the right to file or maintain such patent application in such country in its own name and at its own expense upon the prior consent of the other Party, which shall not be unreasonably withheld or delayed.  In this case, the Party who decides not to file or maintain (and also decides not to reimburse the other Party for its share of the costs of) a joint application for a given country shall promptly assign its rights to the joint invention in said country to the Party who wishes to file or maintain said patent application. The Party who does not wish to file or maintain a patent application in any country shall assist in the timely provision of all documents required under national provisions to register said assignment of rights with the corresponding national authorities at the sole expense of the Party who wishes to file or maintain such patent application in that given country.

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EXECUTION VERSION

 

(c)Separation of Patent Rights. In order to more efficiently enable the prosecution and maintenance of the BMS Study Patent Rights, Five Prime Study Patent Rights and Combined Therapy Patent Rights relating to Inventions as described above, the Parties will use good faith efforts to separate BMS Study Patent Rights, Five Prime Study Patent Rights, Combined Therapy Patent Rights, BMS Independent Patent Rights and Five Prime Independent Patent Rights into separate patent filings to the extent possible and without adversely impacting such prosecution and maintenance.

6.2Disclosure and Assignment of Inventions.  Each Party shall disclose promptly to the other Party in writing and on a confidential basis all Inventions, prior to any public disclosure or filing of Patent applications and allowing sufficient time for comment by the other Party.  In addition, each Party shall, and does hereby, assign, and shall cause its Affiliates and contractors to so assign, to the other Party, without additional compensation, such right, title and interest in and to any Inventions as well as any intellectual property rights with respect thereto, as is necessary to fully effect, as applicable, the sole ownership provided for in Sections 6.1(a) and 6.1(b) and the joint ownership provided for in Section 6.1(c).

6.3Infringement of Patent Rights by Third Parties.

(a)Notice.  Each Party shall promptly notify the other Party in writing of any alleged or threatened (in writing) infringement, or misappropriation by a Third Party, of Combined Therapy Patent Rights, of which its in-house patent counsel becomes aware (such infringement, “Infringement”).

(b)Infringement of Five Prime Study Patent Rights.  For all Infringement of Five Prime Study Patent Rights anywhere in the world, Five Prime shall have the exclusive right to prosecute such Infringement as it may determine in its sole and absolute discretion, and Five Prime shall bear all related expenses and retain all related recoveries.  BMS shall reasonably cooperate with Five Prime or its designee (to the extent BMS has relevant information arising out of this Agreement), at Five Prime’s request and expense, in any such action.

(c)Infringement of BMS Study Patent Rights.  For all Infringement of BMS Study Patent Rights anywhere in the world, BMS shall have the exclusive right to prosecute such Infringement as it may determine in its sole and absolute discretion, and BMS shall bear all related expenses and retain all related recoveries.  Five Prime shall reasonably cooperate with BMS or its designee (to the extent Five Prime has relevant information arising out of this Agreement), at BMS’s request and expense, in any such action.

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EXECUTION VERSION

 

(d)Infringement of Combined Therapy Patent Rights.

(i)With respect to Infringement of Combined Therapy Patent Rights, the Parties shall agree as to whether to bring an enforcement action to seek the removal or prevention of such Infringement and damages therefor and, if so, which Party shall bring such action, with any costs and expenses relating thereto to be allocated in accordance with Section 6.3(d)(ii).

(ii)Regardless of which Party brings an enforcement action pursuant to Section 6.3(d)(i), the other Party hereby agrees to cooperate reasonably in any such action, including, if required, by bringing a legal action or furnishing a power of attorney.  If the Parties agree to bring an enforcement action, BMS shall be responsible for ***, and Five Prime shall be responsible for ***, of the reasonable and verifiable costs and expenses incurred in connection with any such action.  If either Party recovers monetary damages from any Third Party in an action approved by the Parties and brought under this Section 6.3(d)(ii), such recovery shall be allocated first to the reimbursement of any actual, unreimbursed costs and expenses incurred by the Parties in such litigation (including, for this purpose, a reasonable allocation of expenses of internal counsel) pro rata in accordance with the aggregate amounts spent by both Parties, and any remaining amounts shall be split *** to Five Prime and *** to BMS, unless the Parties agree in writing to a different allocation.  In connection with any proceeding under this Section 6.3(d), neither Party shall enter into any settlement without the prior written consent of the other Party.

6.4Infringement of Third Party Rights.

(a)Notice.  If the activities relating to the Combined Therapy Trials become the subject of a claim of infringement of a patent, copyright or other proprietary right by a Third Party anywhere in the world, the Party first having notice of the claim shall promptly notify the other Party and, without regard to which Party is charged with said infringement and the venue of such claim, the Parties shall promptly confer to discuss the claim.

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EXECUTION VERSION

 

(b)Defense.  If both Parties are charged with infringement pursuant to a claim described in Section 6.4(a), the Parties shall defend such claim jointly, unless they agree otherwise.  If only one Party is charged with infringement, such Party will have the first right but not the obligation to defend such claim.  If the charged Party does not commence actions to defend such claim within *** after being so charged, then the other Party shall have the right, but not the obligation, to defend any such claim.  In any event, the non-defending Party shall reasonably cooperate with the Party conducting the defense of the claim and shall have the right to participate with separate counsel at its own expense, and the defending Party shall consider comments by the non-defending Party in good faith.  The Party defending the claim shall bear the cost and expenses of the defense of any such Third Party infringement claim and shall have sole rights to any recovery.  If the Parties jointly defend the claim, Five Prime shall bear ***, and BMS shall bear *** of any costs and expenses of the defense of any such Third Party infringement claim; provided, however, that, notwithstanding the foregoing, if the claim relates solely to one Party’s Compound, such Party will bear *** of the costs and expenses of the defense of such claim and shall have the sole right, but not the obligation, to defend, settle and otherwise handle the disposition of such claim.  Neither Party shall enter into any settlement concerning activities under this Agreement or the Combined Therapy that affects the other Party’s rights under this Agreement or imposes any obligations on the other Party, including any admissions of wrongdoing on behalf of the other Party, without such other Party’s prior written consent, not to be unreasonably withheld or delayed, except that a Party may settle any claim that solely relates to its Compound without the consent of the other Party as long as such other Party’s rights under this Agreement are not adversely impacted (in which case, it will obtain such other Party’s prior written consent, not to be unreasonably withheld or delayed).

6.5Combined Therapy Trial Regulatory Documentation.  Subject to the license and other rights granted by each Party to the other Party pursuant to this Agreement, Five Prime and BMS shall jointly own all right, title and interest in and to the Combined Therapy Trial Regulatory Documentation; provided, however, that BMS shall retain sole and exclusive ownership of any BMS Regulatory Documentation provided to Five Prime under this Agreement that is submitted with or referenced in the Combined Therapy Trial Regulatory Documentation and that Five Prime shall retain sole and exclusive ownership of any Five Prime Regulatory Documentation that is submitted with or referenced in the Combined Therapy Trial Regulatory Documentation.  This Section 6.5 is without limitation of any other disclosure obligations under the Pharmacovigilance Agreement or this Agreement.

 

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EXECUTION VERSION

 

Article 7

ONE-TIME PAYMENT; COLLABORATION COSTS AND EXPENSES

7.1One-time Payment; Refund.  

(a)BMS shall pay Five Prime a one-time payment in the amount of Thirty Million Dollars ($30,000,000) within *** after the Effective Date.  

(b)If (i) a Change of Control of Five Prime closes prior to the Initial Results Date, (ii) immediately prior to such Change of Control, the Third Party acquirer in such Change of Control (or any of its Affiliates) owns or controls (including pursuant to an exclusive license or an exclusive option to acquire an exclusive license) (A) an anti-PD-1 antagonist molecule (including antibodies, peptides and chemical compounds) or (B) an anti-PD-L1 antagonist molecule (including antibodies, peptides and chemical compounds), which molecule in (A) or (B) is then in clinical development for use in treating cancer or is then being commercialized for use in treating cancer, (iii) BMS is using Commercially Reasonable Efforts in the performance and fulfillment of its activities under this Agreement and the Parties are developing or pursuing the development of the Combined Therapy Trial under this Agreement, and (iv) a Change of Control of BMS has not occurred, then Five Prime shall, within *** after the closing of such Change of Control, pay to BMS the lesser of (x) Thirty Million Dollars ($30,000,000) and (y) ten percent (10%) of the sum (x) of the aggregate purchase price paid to Five Prime or the stockholders of Five Prime at the closing of such Change of Control plus (y) the risk-adjusted, discounted value of any contingent consideration paid to Five Prime or the stockholders of Five Prime with respect to such Change of Control.

7.2Combined Therapy Trial Expenses.  Expenses incurred as described in Article 4 (regarding manufacturing and supply), and Article 6 (regarding intellectual property) shall be borne or shared by the Parties as provided in such Articles.  In addition, each Party shall bear its own Third Party License Payments as set forth in Section 2.6(b).  For all other expenses that are directly attributable to the conduct of activities under the Development Plan, including any pharmacokinetic, pharmacodynamics and biomarker research, any Combined Therapy Trials and any additional studies required under Section 2.1(d), (a) BMS will be responsible for all payments made to Third Parties for such expenses (“Third Party Study Costs”) , and (b) each Party shall be solely responsible for all of its own internal costs (including costs of individual independent contractors) incurred by such Party or any of its Affiliates, to the extent not included in the definition of Third Party Study Costs.  For avoidance of doubt, Third Party Study Costs do not include Third Party License Payments by Five Prime or any Third Party Claims.

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EXECUTION VERSION

 

7.3Invoicing; Payment.

(a)Reconciliation.  Five Prime shall provide a report to BMS within *** after the end of each Quarter which shall set forth in reasonable detail all Third Party Study Costs and Section 4.2(b) Costs actually incurred during such Quarter by Five Prime (a “Quarterly Report”).  If requested by BMS, Five Prime shall provide invoices or other appropriate supporting documentation for any payments to a Third Party exceeding ***.  The Parties shall seek to resolve any questions related to such Quarterly Reports within *** following receipt by BMS of such Quarterly Report.  Based on these Quarterly Reports, the Parties finance teams will determine the amount, if any, owed by BMS for such Quarter and such payment will be made by BMS within *** after the end of such *** reconciliation period.

(b)Budget Overruns.  Any costs that are incurred by Five Prime that are *** greater than the JDC-approved budget shall require approval of the JDC for payment. If the reason for the costs exceeding such JDC-approved budget by more than *** is attributable to a Party’s negligence or breach of its obligations under this Agreement, then the costs incurred that are more than *** greater than the JDC-approved budget shall be the sole responsibility of such Party.

(c)Payment Method.  BMS shall pay all amounts due hereunder in United States dollars to the bank account Five Prime designates in writing from time to time.

7.4Customs Valuation.  Five Prime will provide BMS in writing with a list of all countries participating in a Combined Therapy Trial prior to study start initiation of such Combined Therapy Trial.  During the conduct of such Combined Therapy Trial, Five Prime will send in writing any changes to the list of participating countries to BMS one month prior to the end of each Quarter. If no changes are sent to BMS by Five Prime for a particular Quarter, the prior Quarter’s participating country list will be used as the basis for customs valuation for that Quarter. BMS will provide Five Prime with Nivolumab country-specific customs valuations initially prior to study start initiation of Combined Therapy Trial(s) and at the end of each Quarter during the conduct of the Combined Therapy Trial. Five Prime will use the BMS provided values for the import/export process to the listed participating countries and not make any change to such valuations without BMS’s prior written consent.   

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EXECUTION VERSION

 

7.5Audit. At the request (and expense) of BMS, Five Prime shall permit an independent certified public accountant appointed by BMS and reasonably acceptable to Five Prime, at reasonable times and upon reasonable notice, to examine only those records as may be reasonably necessary to determine, with respect to any calendar year ending not more than *** prior to BMS’s request, the correctness or completeness of any invoice submitted to  BMS or other payment made to Five Prime pursuant to this Agreement.  The foregoing right of review may be exercised *** per year and *** with respect to each such Quarterly Report and payment.  Results of any such examination shall be (a) made available to both Parties and (b) subject to Article 9.  BMS shall bear the full cost of the performance of any such audit, unless such audit discloses a variance to the detriment of BMS of more than *** from the amount of the original payment calculation, in which case, Five Prime shall bear the full cost of the performance of such audit.

7.6Taxes. Each Party will pay any and all taxes levied on accounts of all payments it receives under this Agreement. If Applicable Law requires withholding of any taxes imposed upon Five Prime on account of any payments paid under this Agreement, BMS shall withhold such taxes as required by such Applicable Law from such remittable payments and timely pay such withheld taxes to the proper tax authorities. BMS shall promptly secure official receipts of payment of any withholding tax and send such receipts to Five Prime as evidence of such payment.  BMS shall cooperate with Five Prime in the event Five Prime claims exemption from such withholding or seeks deductions under any double taxation or other similar treaty or agreement from time to time in force. In addition, the Parties shall cooperate in accordance with Applicable Law to minimize indirect taxes (such as value added tax, sales tax, consumption tax and other similar taxes ) in connection with this Agreement. 

 

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EXECUTION VERSION

 

Article 8

RECORDS AND STUDY DATA

8.1Records.  Each Party shall maintain complete and accurate records of all work conducted under the Development Plan and of all results, information, data, data analyses, reports, records, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences and developments made by or provided to either Party, or by the Parties together, in the course of each such Party’s performance of the Development Plan (including the Statistical Analysis Plan and any Bioanalysis Plan to be conducted pursuant to this Agreement) (such results, information, data, data analyses, reports, case report forms, adverse event reports, trial records, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, developments, and each Protocol referred to as the “Study Data”).  Such records shall fully and properly reflect all work done and results achieved in the performance of the Development Plan in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes.

8.2Ownership of Study Data.  BMS shall own the Study Data to the extent that it relates exclusively to the BMS Compound (“BMS Study Data”), and Five Prime shall own the Study Data to the extent that it relates exclusively to the Five Prime Compound (“Five Prime Study Data”).  Both Parties shall jointly own any Study Data that does not relate exclusively to the Five Prime Compound or the BMS Compound (“Combined Therapy Study Data”).  Each Party shall, and does hereby, assign, and shall cause its Affiliates to so assign, to the other Party, without additional compensation, such right, title and interest in and to any Study Data as is necessary to fully effect the foregoing, and agrees to execute all instruments as may be reasonably necessary to effect same.

8.3Use of Study Data.

(a)Use of a Party’s Own Study Data.  Each Party may use and analyze its own Study Data for any purpose without obligation or accounting to the other.

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EXECUTION VERSION

 

(b)Use of Combined Therapy Study Data by BMS.  BMS and its Affiliates and (sub)licensees shall have the right to use and analyze the Combined Therapy Study Data (x) in connection with its independent development, commercialization or other exploitation of the BMS Compound (alone or in combination with the Five Prime Compound and/or other pharmaceutical agents (but not with any Third Party’s molecule that is designed to selectively bind CSF1R)) and/or for inclusion in the safety database for the BMS Compound, in each case without the consent of, or any obligation to account to, Five Prime, and (y) to conduct studies with Samples pursuant to Section 8.5.  Subject to Section 8.5, the results of all such analyses or uses shall be owned by BMS, including any intellectual property arising out of same, unless the Parties shall have agreed otherwise in writing.  BMS,  its Affiliates and licensees shall also be entitled to use the Combined Therapy Study Data during and following the Term to (1) make regulatory filings and seek approvals for the BMS Compound, either alone or as part of the Combined Therapy and (2) to promote indications based on, and to disseminate, the Combined Therapy Study Data for the benefit of the BMS Compound, either alone or as part of the Combined Therapy, where permitted by and in accordance with Applicable Law; provided that nothing in the foregoing is intended or shall be construed as granting BMS any right or license, expressly or implicitly: (i) to make, have made, use, sell, offer for sale, or import the Five Prime Compound.  Five Prime grants BMS, its Affiliates and licensees a Right of Cross-Reference to the relevant Regulatory Documentation Controlled by Five Prime for the Five Prime Compound or the Combined Therapy for the sole purpose of enabling each of them to exercise its rights under clause (1) of this Section 8.3(b) (other than for use in the Ono Territory), which right shall survive any expiration or termination of this Agreement.

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EXECUTION VERSION

 

(c)Use of Combined Therapy Study Data by Five Prime.  Five Prime, its Affiliates and licensees shall have the right to use and analyze the Combined Therapy Study Data (x) in connection with its independent development, commercialization or other exploitation of the Five Prime Compound (alone or in combination with the BMS Compound and/or other pharmaceutical agents (but not with any Third Party molecule that is designed to selectively bind to PD-1)) and/or for inclusion in the safety database for the Five Prime Compound, in each case without the consent of, or any obligation to account to, BMS and (y) to conduct studies with Samples pursuant to Section 8.5.  Subject to Section 8.5, the results of all such analyses or uses shall be owned by Five Prime, including any intellectual property arising out of same, unless the Parties shall have agreed otherwise in writing.  Five Prime, its Affiliates and licensees shall be entitled to use the Combined Therapy Study Data during and following the Term to (1) make regulatory filings and seek approvals for the Five Prime Compound, either alone or as part of the Combined Therapy and (2) to promote indications based on, and to disseminate, the Combined Therapy Study Data for the benefit of the Five Prime Compound, either alone or as part of the Combined Therapy, where permitted by and in accordance with Applicable Law; provided that nothing in the foregoing is intended or shall be construed as granting Five Prime any right or license, expressly or implicitly, to make, have made, use, sell, offer for sale, or import the BMS Compound.  BMS grants Five Prime, its Affiliates and licensees of the Five Prime Compound a Right of Cross-Reference to the relevant Regulatory Documentation Controlled by BMS for the BMS Compound for the sole purpose of enabling each of them to exercise its rights under clause (1) of this Section 8.3(c) (for clarity, such Right of Cross-Reference shall not extend to the Ono Territory or use of any Ono-controlled Regulatory Documentation), which right shall survive any expiration or termination of this Agreement.

(d)Biomarker/Diagnostic Agent Development.  Each Party may use and disclose to a Third Party the Combined Therapy Study Data and its Compound’s Study Data, under obligations of confidentiality consistent with this Agreement, to develop and commercialize a biomarker or diagnostic test for use with its Compound and/or the Combined Therapy, and, unless otherwise agreed by the Parties in writing, will own any intellectual property arising out of the work funded or conducted by it with or through such Third Party.  The Parties will discuss in good faith any opportunities to jointly participate in the development of any such biomarker or diagnostic test for use with the Combined Therapy.

(e)No Other Uses.  All other uses of Study Data are limited solely to those permitted by this Agreement, and neither Party may use Study Data for any other purpose without the written consent of the other Party during and after the Term.

8.4Access to Study Data.  Subject to the provisions of Sections 2.2, 5.1(a)(xvi) and 5.1(a)(xvii) and the Pharmacovigilance Agreement, each Party shall have access to all Study Data (including de-identified patient records) promptly after such Study Data is available to or generated by the Party responsible for generating or collecting such Study Data.

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EXECUTION VERSION

 

8.5Samples.  Samples collected in the course of activities conducted under this Agreement shall be jointly owned by the Parties (to the extent not owned by the patient and/or the clinical trial site).  Any such Samples shall be collected in accordance with the Development Plan and ICFs.  Neither Party shall be permitted to use such Samples for any purpose without the prior written consent of the other Party, which consent shall not be unreasonably withheld if such use is directed to the Combined Therapy and with the terms of such use to be set forth in a written agreement between the Parties setting forth the Samples to be used, and any appropriate terms/restrictions on such use.  Any data and intellectual property arising out of such Sample use shall be owned by the Party conducting such study using same; provided that to the extent that any such data or intellectual property relates solely to the Combined Therapy (or biomarkers solely for use with the Combined Therapy), such data or intellectual property shall be considered Combined Therapy Study Data or Combined Therapy Inventions/Combined Therapy Patent Rights, as the case may be.  Samples for PK and ADA serum analysis will be stored for future use in Five Prime’s sample repository (with the expectation that BMS will store those samples that it expects to use in studies), provided that if the Party holding the Samples determines that it no longer has a use for the Samples and the other Party determines that it does, then the Samples shall, subject to applicable Law and the terms of the signed ICFs, be transferred to the other Party and may be used solely thereafter by the other Party.   If neither Party has any further use for the Samples, then the remaining Samples will be destroyed pursuant to the respective Party’s standard operating procedures for sample retention and destruction, subject to the terms of and permission(s) granted in the ICFs signed by the subjects contributing the Samples in the Combined Therapy Trials.

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EXECUTION VERSION

 

Article 9

CONFIDENTIALITY

9.1Nondisclosure of Confidential Information.

(a)All written, visual, oral and electronic data, information, know-how or other confidential information or materials, both technical and non-technical, disclosed by one Party to any other Party pursuant to this Agreement that (a) if in tangible form, is labeled in writing as “proprietary” or “confidential” (or similar reference); or (b) if in oral or visual form, is identified as proprietary or confidential or for internal use only at the time of disclosure or within *** thereafter shall be “Confidential Information” of the disclosing Party, and all Study Data and Inventions shall be the Confidential Information of the Party owning such Study Data or Invention (as provided in Section 8.2 with regard to Study Data and Section 6.1 with regard to Inventions).  For purposes of this Agreement, regardless of which Party discloses such Confidential Information to the other, (i) all Five Prime Study Inventions, Five Prime Technology and Five Prime Regulatory Documentation shall be Confidential Information of Five Prime and BMS shall be deemed the receiving Party, (ii) all BMS Study Inventions, BMS Technology, and BMS Regulatory Documentation shall be Confidential Information of BMS and Five Prime shall be deemed the receiving Party and (iii) all Combined Therapy Inventions, Combined Therapy Study Data and Combined Therapy Trial Regulatory Documentation shall be Confidential Information of each Party.

(b)Except to the extent expressly authorized in this Section 9.1 and Sections 9.2, 9.3 and 9.5, or as otherwise agreed in writing by the Parties, each Party agrees that, for the Term and for a period of *** thereafter (or for any Confidential Information that is identified in writing at the time of disclosure as a trade secret related to each Party’s Compound, for as long as it is not part of the public domain), it shall (x) keep confidential and shall not publish or otherwise disclose and shall not use for any purpose other than as expressly provided for in this Agreement any Confidential Information owned by the other Party, (y) treat the other Party’s Confidential Information with the same degree of care the receiving Party uses for its own confidential information but in no event with less than a reasonable degree of care; and (z) reproduce the disclosing Party’s Confidential Information solely to the extent necessary to accomplish the receiving Party’s obligations under this Agreement, with all such reproductions being considered the disclosing Party’s Confidential Information; provided that with respect to BMS Confidential Information that BMS received as confidential information from Ono, the obligations of confidentiality and non-use shall continue for the longer of the period set forth above or *** after the termination of the Ono-BMS Agreements.

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EXECUTION VERSION

 

(c)Notwithstanding anything to the contrary in this Section 9.1, and subject to Section 8.3, the receiving Party may disclose the disclosing Party’s Confidential Information to its employees, consultants, agents or permitted sublicensees solely on a need-to-know basis for the purpose of fulfilling the receiving Party’s obligations under this Agreement; provided, however, that (1) any such employees, consultants, agents or permitted sublicensees are bound by obligations of confidentiality at least as restrictive as those set forth in this Agreement, and (2) the receiving Party remains liable for the compliance of such employees, consultants, agents or permitted sublicensees with such obligations.  Each receiving Party acknowledges that in connection with its and its representatives examination of the Confidential Information of the disclosing Party, the receiving Party and its representatives may have access to material, non-public information, and that the receiving Party is aware, and will advise its representatives who are informed as to the matters that are the subject of this Agreement, that State and Federal laws, including United States securities laws, impose restrictions on the dissemination of such information and trading in securities when in possession of such information.  Each receiving Party agrees that it will not, and will advise its representatives who are informed as to the matters that are the subject of this Agreement to not, purchase or sell any security of the disclosing Party on the basis of the Confidential Information to the extent such Confidential Information constitutes material non-public information about the disclosing Party or such security.

9.2Exceptions.  Information of a disclosing Party shall not be deemed “Confidential Information” of such disclosing Party to the extent the receiving Party can demonstrate by contemporaneous tangible records or other competent proof that such information:

(a)was already known to the receiving Party (or its Affiliates), other than under an obligation of confidentiality, either (a) at the time of disclosure by the disclosing Party, or (b) if applicable, at the time that it was generated hereunder, whichever ((a) or (b)) is earlier;

(b)was generally available to the public or otherwise part of the public domain either (a) at the time of its disclosure to the receiving Party, or (b) if applicable, at the time that it was generated hereunder, whichever ((a) or (b)) is earlier;

(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 disclosed to the receiving Party (or its Affiliates), other than under an obligation of confidentiality, by a Third Party who had no obligation to the Party owning or Controlling the information not to disclose such information to others; or

(e)was independently discovered or developed by the receiving Party (or its Affiliates) without the use of or reference to the Confidential Information belonging to the disclosing Party.

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9.3Authorized Disclosure.  Notwithstanding any other provision of this Agreement, each Party may disclose Confidential Information belonging to the other Party to the extent such disclosure is reasonably necessary in the following instances:

(a)filing or prosecuting Patent Rights;

(b)prosecuting or defending litigation;

(c)complying with Applicable Law or the rules or regulations of any securities exchange on which such Party’s stock is listed;

(d)disclosure, in connection with the performance of this Agreement, to Affiliates, permitted sublicensees, contractors, ethics committees and institutional review boards (collectively, “IRBs”), CROs, academic institutions, consultants, agents, investigators, and employees and contractors engaged by Study sites and investigators involved with the Combined Therapy Trials, each of whom prior to disclosure must be bound by similar terms of confidentiality and non-use at least equivalent in scope to those set forth in this Article 9;

(a)disclosure that is deemed necessary by either Party to be disclosed to its respective Affiliates, agents, consultants or other Third Parties for any and all purposes such Party or its Affiliates deem necessary or advisable in the ordinary course of business in furtherance of the development, manufacture and/or commercialization of such Party’s Compound and in accordance with this Agreement, on the condition that such Third Parties agree to be bound by confidentiality and non-use obligations that are substantially consistent with the confidentiality and non-use provisions contained in this Agreement; provided, however, that the term of confidentiality for such Third Parties shall be no less than ***;

(e)disclosure of the Combined Therapy Study Data, Combined Therapy Inventions and Combined Therapy Patent Rights to Regulatory Authorities in connection with the development of the Combined Therapy, the Five Prime Compound or the BMS Compound; and

(f)disclosure of relevant safety information contained within the Combined Therapy Study Data to investigators, IRBs and/or ethics committees and Regulatory Authorities that are involved in other clinical trials of the Five Prime Compound with respect to Five Prime, the BMS Compound with respect to BMS, and (in the event of a Material Safety Issue) to Third Parties that are collaborating with Five Prime or BMS, respectively in the conduct of such other clinical trials of the Five Prime Compound or the BMS Compound, in each case solely to the extent necessary for the conduct of such clinical trials and/or to comply with Applicable Law and regulatory requirements.

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Notwithstanding the foregoing, if a Party is required or otherwise intends to make a disclosure of the other Party’s Confidential Information pursuant to Section 9.3(b) and/or Section 9.3(c), it shall give advance notice to such other Party of such impending disclosure and endeavor in good faith to secure confidential treatment of such Confidential Information and/or reasonably assist the Party that owns such Confidential Information in seeking a protective order or other confidential treatment.  BMS acknowledges that Five Prime plans to (i) file a Current Report on Form 8-K (the “Current Report”) with the Securities and Exchange Commission (the “SEC”) within four (4) Business Days of the full execution and delivery of this Agreement, which Current Report shall include a description of the terms and conditions of this Agreement, and (ii) attach this Agreement as an exhibit to either an amendment to the Current Report or the Annual Report on Form 10-K for the fiscal year ending December 31, 2014 that Five Prime will file with the SEC (the “Annual Report”). BMS hereby consents to Five Prime’s filing of such Current Report and the attachment of this Agreement to an amendment to the Current Report or the Annual Report, subject to Five Prime’s compliance with the first sentence of this paragraph; provided that Five Prime allow BMS at least *** to review the contents of such Current Report and a reasonable opportunity for BMS to discuss with Five Prime any comments or proposed revisions it may have with respect to the information disclosed in such Current Report.

9.4Disclosure to Ono.  Notwithstanding any other provision of this Agreement, Five Prime hereby expressly authorizes BMS to disclose to Ono (i) the existence (but not the terms) of this Agreement and the Development Plan, and (ii) any Five Prime Confidential Information, BMS Study Data and the Combined Therapy Study Data solely to the extent necessary for BMS to fulfill its obligations to Ono under the Ono-BMS Agreements; provided that Ono is under confidentiality obligations at least as restrictive as set forth herein.

9.5Press Releases and Publications.

(a)Subject to this Section 9.5, the Parties shall jointly agree to the content and timing of all external communications with respect to this Agreement (including an initial press release, the content of which shall be as attached hereto as Exhibit C, subsequent press releases, Q&As, and the content and wording of any listing any Combined Therapy Trial required to be listed on a public database or other public registry such as www.clinicaltrials.gov).  If either Party terminates this Agreement pursuant to Section 12.4, the Parties shall agree upon any external communication related to such termination, which shall not include the rationale for such termination unless (and to the extent) agreed by the Parties.  Notwithstanding any provision of this Agreement to the contrary, each Party shall be permitted to publicly disclose information, including the existence of this Agreement or any of its terms or conditions or the results of any activity under this Agreement, that such Party determines in good faith is necessary to be disclosed to comply with Applicable Law, including pursuant to an order of a court or governmental entity, or to comply with the rules or regulations of any securities exchange on which such Party’s stock may be listed.

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(b)Five Prime and BMS agree to collaborate to disclose publicly, publish or present (1) top-line results from the performance of the Development Plan, limited if possible to avoid jeopardizing the future publication of the Study Data at a scientific conference or in a scientific journal, solely for the purpose of disclosing, as soon as reasonably practicable, the safety or efficacy results and conclusions that are material to either Party under applicable securities laws, and (2) the conclusions and outcomes (the “Results”) of each Combined Therapy Trial at a scientific conference as soon as reasonably practicable following the completion of such Combined Therapy Trial, subject in the case of (2) to the following terms and conditions.  The Party proposing to disclose, publish or present the Results shall deliver to the other Party a copy of (i) any abstract or press release at least *** before submission to a Third Party and (ii) any proposed slide presentation, publication, poster presentation or any other disclosure, publication or presentation at least *** before submission to a Third Party.  The reviewing Party shall determine whether any of its Confidential Information that may be contained in such disclosure, publication or presentation should be modified or deleted, whether to file a patent application on any Five Prime Study Invention (solely with respect to Five Prime) or BMS Study Invention (solely with respect to BMS) or Combined Therapy Invention disclosed therein.  The disclosure, publication or presentation shall be delayed for an additional *** (i.e., a total of *** from the initial proposal) if the reviewing Party reasonably requests such extension to allow time for the preparation and filing of relevant patent applications.  If the reviewing Party reasonably requests modifications to the disclosure, publication or presentation to prevent the disclosure of a material trade secret or proprietary business information, the publishing Party shall edit such publication to prevent the disclosure of such information prior to submission of the disclosure, publication or presentation.  In the event of a disagreement as to content, timing and/or venue or forum for any disclosure, publication or presentation of the Results, such dispute (a “Publication Dispute”) shall be referred to the Executive Officers (or their respective designees); provided that, in the absence of agreement after such good faith discussions, and upon expiration of the additional ***-period, academic collaborators engaged by Five Prime in connection with the performance of the Combined Therapy Trials may publish Combined Therapy Study Data obtained by such academic collaborator solely to the extent that such ability to publish such Combined Therapy Study Data is set forth in an agreement between Five Prime and such academic collaborator relating to the conduct of Combined Therapy Trials.  Authorship of any publication shall be determined based on the accepted standards used in peer-reviewed academic journals at the time of the proposed disclosure, publication or presentation.  The Parties agree that they shall make reasonable efforts to prevent publication of a press release that could jeopardize the future publication of Study Data at a scientific conference or in a scientific journal but in no way will this or any other provision of this Agreement supersede the requirements of any Applicable Law or the rules or regulations of any securities exchange or listing entity on which a Party’s stock is listed (including any such rule or regulation that may require a Party to make public disclosures about interim results of a Combined Therapy Trial).  Notwithstanding the foregoing, Five Prime hereby authorizes disclosure to Ono in accordance with Section 9.4.  Notwithstanding the foregoing, nothing herein shall prevent or restrict Ono from making any disclosures of published Study Data disclosed to it by BMS pursuant to Section 9.4 or of the existence of this Agreement, in each case in order for Ono to comply with requirements of 

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Applicable Law, the rules or regulations of any securities exchange or listing entity on which its stock may be traded or pursuant to an order of a court or governmental entity to publicly disclose the existence of the Agreement and the Study Data.

9.6Compliance with Sunshine Laws.

(a)For purposes of compliance with reporting obligations under Sunshine Laws, Five Prime represents that it is not, as of the Effective Date, subject to reporting obligations under the Sunshine Laws.  Therefore, as between the Parties, BMS will report payments or other transfers of value (“POTV”) made by Five Prime or the CRO related to the conduct of the Combined Therapy Trials and any applicable associated contractor engagements as required under the Sunshine Laws, for each Combined Therapy Trial initiated prior to such date that Five Prime becomes responsible for reporting POTV for studies sponsored by it.  BMS shall request delayed publication for any reported POTV for the studies sponsored by Five Prime as permitted under the Sunshine Laws and if consistent with BMS’s normal business practices.  In the event Five Prime becomes responsible for reporting POTV for studies sponsored by it in a given country during the Term, Five Prime shall provide written notification to BMS, and the Parties will meet and confer to discuss how they wish to handle reporting thereafter.  Interpretation of the Sunshine Laws for purposes of reporting any POTV by a Party shall be in such Party’s sole discretion so long as the interpretation complies with Applicable Law.

(b)Five Prime (i) will provide (to the extent in the possession of Five Prime), or will utilize Commercially Reasonable Efforts to obligate and ensure that each CRO and other applicable Third Party contractors for a Combined Therapy Trial provide, BMS with any information requested by BMS as BMS may reasonably determine is necessary for BMS to comply with its reporting obligations under Sunshine Laws (with such amounts paid to, or at the direction of, each Recipient to be reported to BMS within a reasonable time period specified by BMS) and (ii) will reasonably cooperate with, and will utilize Commercially Reasonable Efforts to obligate and ensure that each CRO and other applicable Third Party contractors for a Combined Therapy Trial reasonably cooperate with, BMS in connection with its compliance with such Sunshine Laws. The form in which Five Prime provides any such information shall be mutually agreed but sufficient to enable BMS to comply with its reporting obligations and BMS may disclose any information that it believes is necessary to comply with Sunshine Laws.   BMS shall have the right to allocate payments or other transfers of value in connection with this Agreement in any required reporting under Sunshine Laws in accordance with its normal business practices. These obligations shall survive the expiration and termination of the agreement to the extent necessary for BMS to comply with Sunshine Laws.

(c)For purposes of this Section 9.7, “Sunshine Laws” means Applicable Laws requiring collection, reporting and disclosure of POTVs to certain healthcare providers, entities and individuals.  These Applicable Laws may include relevant provisions of the Patient Protection and Affordable Health Care Act of 2010 and implementing regulations thereunder.  “Recipients” means healthcare providers, teaching hospitals and/or any other Persons for whom transfers of value or payments must be reported under Sunshine Laws.

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EXECUTION VERSION

 

9.7Destruction of Confidential Information.  Upon expiration or termination of the Agreement, the receiving Party shall, upon request by the other Party, immediately destroy or return all of the other Party’s Confidential Information relating solely to such other Party’s Compound as monotherapy (but not to the Combined Therapy or the Combined Therapy Study Data) in its possession; provided, however, that the receiving Party shall be entitled to retain one (1) copy of Confidential Information solely for record-keeping purposes and shall not be required to destroy any computer files created during automatic system back up which are subsequently stored securely by the receiving Party

 

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EXECUTION VERSION

 

Article 10

REPRESENTATIONS AND WARRANTIES

10.1Authority and Binding Agreement. Five Prime and BMS each represent and warrant to the other that (a) it has the corporate power and authority and the legal right to enter into this Agreement and perform its obligations hereunder; (b) it has taken all necessary corporate action on its part required to authorize the execution and delivery of the Agreement and the performance of its obligations hereunder; and (c) the Agreement has been duly executed and delivered on behalf of such Party and constitutes a legal, valid and binding obligation of such Party that is enforceable against it in accordance with its terms subject to bankruptcy, insolvency, reorganization, arrangement, winding-up, moratorium, and similar laws of general application affecting the enforcement of creditors’ rights generally, and subject to general equitable principles, including the fact that the availability of equitable remedies, such as injunctive relief or specific performance, is in the discretion of the court.

10.2No Conflicts. Five Prime and BMS each represent, warrant and covenant that, to the best of its knowledge as of the Effective Date, it has not entered, and shall not thereafter enter, into any agreement with any Third Party that is or would be in conflict with the rights granted to the other Party under this Agreement, and has not taken any action that would in any way prevent it from granting the rights granted to the other Party under this Agreement, or that would otherwise materially conflict with or materially adversely affect the rights granted to the other Party under this Agreement.

10.3Litigation.  Five Prime and BMS each represent and warrant that, to the best of its knowledge as of the Effective Date, it is not aware of any pending or threatened litigation (and has not received any communication) that alleges that its activities related to this Agreement have violated, or that by conducting the activities as contemplated in this Agreement it would violate, any of the intellectual property rights of any other Person (after giving effect to the license grants in this Agreement).

10.4No Adverse Proceedings.  To the knowledge of each Party as of the Effective Date, no claim, suit, action or governmental proceeding is pending or threatened against such Party that would, if adversely determined, materially impair the ability of such Party to perform its obligations under this Agreement or the Development Plan.

10.5Consents.  Five Prime and BMS each represent and warrant that, to the best of its knowledge, all necessary consents, approvals and authorizations of all regulatory and governmental authorities and other Persons (i) required to be obtained by such Party in connection with the execution and delivery of this Agreement have been obtained (or will have been obtained prior to such execution and delivery) and (ii) required to be obtained by such Party in connection with the performance of its obligations under this Agreement or the Development Plan have been obtained or will be obtained prior to such performance.

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EXECUTION VERSION

 

10.6No Debarment. Each Party hereby certifies to the other that it has not used, and will not use the services of any person disqualified, debarred, banned, subject to debarment or convicted of a crime for which a person could be debarred by the FDA under 21 U.S.C. 335a, as amended (or subject to a similar sanction of any other Regulatory Authority), in any capacity in connection with any of the services or work provided under the Development Plan and that this certification may be relied upon in any applications to the FDA or any other Regulatory Authority.  It is understood and agreed that this certification imposes a continuing obligation upon each Party to notify the other promptly of any change in the truth of this certification.  Upon request by a Party, the other Party agrees to provide a list of persons used to perform the services or work provided under any activities conducted for or on behalf of such Party or any of its Affiliates pursuant to this Agreement who, within the five years preceding the Effective Date, or subsequent to the Effective Date, were or are convicted of one of the criminal offenses required by 21 U.S.C. 335a, as amended, to be listed in any application for approval of an abbreviated application for drug approval.

10.7Compliance with Applicable Law.  Each of Five Prime and BMS represents, warrants and covenants that it shall comply with all Applicable Laws of the country or other jurisdiction, or any court or agency thereof, applicable to the performance of its activities hereunder and under the Development Plan or any obligation or transaction hereunder or under the Development Plan, including those pertaining to the production and handling of drug products, such as those set forth by the Regulatory Agencies, as applicable, and the applicable terms of this Agreement, in the performance of its obligations hereunder.

10.8Affiliates.  Each of Five Prime and BMS represents and warrants that, to the extent the intellectual property, Regulatory Documentation or Technology licensed by it hereunder are Controlled by its Affiliates or a Third Party, it has the right to use, and has the right to grant (sub)licenses to the other Party to use, such intellectual property, Regulatory Documentation or Technology in accordance with the terms of this Agreement.

10.9Ethical Business Practices.  Each of Five Prime and BMS represents and warrants that neither it nor its Affiliates will make any payment, either directly or indirectly, of money or other assets, including the compensation such Party derives from this Agreement (collectively a “Payment”), to government or political party officials, officials of International Public Organizations, candidates for public office, or representatives of other businesses or Persons acting on behalf of any of the foregoing (collectively “Officials”) where such Payment would constitute violation of any law, including the Foreign Corrupt Practices Act of 1977, 15 U.S.C. §§ 78dd-1, et seq.   In addition, regardless of legality, neither it nor its Affiliates will make any Payment either directly or indirectly to Officials if such Payment is for the purpose of improperly influencing decisions or actions with respect to the subject matter of this Agreement.  All activities will be conducted in compliance with the U.S. False Claims Act and the U.S. Anti-Kickback Statute.

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10.10Single Agent Compound Safety Issues. Each Party represents and warrants that, to the best of its knowledge, it is not aware of any material safety or toxicity issue with respect to its Single Agent Compound that are not reflected in the investigator’s brochure for its Single Agent Compound existing as of the Effective Date.

10.11Accounting.  Each Party represents and warrants that all transactions under the Agreement shall be properly and accurately recorded in all material respects on its books and records and that each document upon which entries in such books and records are based is complete and accurate in all material respects.

10.12Compliance with Ono Agreements.  BMS shall not breach its obligations under the Ono-BMS Agreements or voluntarily terminate or amend the Ono-BMS if such breach, termination or amendment would adversely affect the Parties’ ability to perform this Agreement or the Development Plan or Five Prime’s rights and benefits under this Agreement.

10.13No Combination Patents.  As of the Effective Date, BMS represents and warrants that it does not Control any Patent that claims or discloses, whether generically or specifically, the use of both the BMS Compound (and/or any other antibodies that are designed to selectively bind to PD-1) and a Five Prime Compound (and/or any other antibodies that are designed to selectively bind to CSF1R)).

10.14DISCLAIMER OF WARRANTY.  THE EXPRESS REPRESENTATIONS AND WARRANTIES STATED IN THIS ARTICLE 10 ARE IN LIEU OF, AND THE PARTIES DO HEREBY DISCLAIM, ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR USE, AND NON-INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.

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Article 11

INDEMNIFICATION

11.1BMS Indemnification. BMS hereby agrees to defend, hold harmless and indemnify (collectively, “Indemnify”) Five Prime, its Affiliates, and its and their agents, directors, officers, and employees (the “Five Prime Indemnitees”) from and against any and all liabilities, expenses and/or losses, including reasonable legal expenses and attorneys’ fees (collectively “Losses”) resulting from Third Party suits, claims, actions and demands (each, a “Third Party Claim”) to the extent that they arise or result from (a) the negligence or intentional misconduct of BMS, any BMS Indemnitee or any (sub)licensee of BMS conducting activities on behalf of BMS under this Agreement; (b) any breach by BMS of any provision of this Agreement; (c) any injury to a subject in a Combined Therapy Trial or Joint Subsequent Study (but not any other Subsequent Study) to the extent caused by the development, use or manufacture of the BMS Compound; (d) any injury to a subject in a Combined Therapy Trial or Joint Subsequent Study (but not any other Subsequent Study)  where it ultimately cannot be or is not determined if such injury is the direct result of the BMS Compound on the one hand or the Five Prime Compound on the other hand, provided that, in the case of this clause (d), BMS shall only Indemnify the Five Prime Indemnitees for *** of any such Loss; or (e) the use by BMS, its Affiliates, contractors or (sub)licensees of Combined Therapy Study Data, BMS Study Data, BMS Study Inventions, BMS Study Patent Rights, Combined Therapy Inventions and Combined Therapy Patent Rights outside the scope of this Agreement (other than with respect to Third Party Claims that are covered under Section 6.4)), including in the conduct of a Parallel Study or Subsequent Study (other than a Joint Subsequent Study) by BMS; but excluding, in each case ((a) through (e)), any such Losses to the extent Five Prime is obligated to Indemnify the BMS Indemnitees pursuant to Section 11.2 or to the extent that the Third Party Claim is attributable to a failure of the Five Prime Compound used by BMS in a Parallel Study or Subsequent Study to have been manufactured  in accordance with applicable specifications.

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EXECUTION VERSION

 

11.2Five Prime Indemnification.  Five Prime hereby agrees to Indemnify BMS, its Affiliates, and its and their agents, directors, officers, and employees (the “BMS Indemnitees”) from and against any and all Losses resulting from Third Party Claims to the extent that they arise or result from (a) the negligence or intentional misconduct of Five Prime or any Five Prime Indemnitee or any (sub)licensee of Five Prime conducting activities on behalf of Five Prime under this Agreement; (b) any breach by Five Prime of any provision of this Agreement; (c) any injury to a subject in a Combined Therapy Trial or Joint Subsequent Study (but not any other Subsequent Study) to the extent caused by the development, use or manufacture of the Five Prime Compound; (d) any injury to a subject in a Combined Therapy Trial or Joint Subsequent Study (but not any other Subsequent Study) where it ultimately cannot be or is not determined if such injury is the direct result of the Five Prime Compound on the one hand or the BMS Compound on the other hand; provided that, in the case of this clause (d),  Five Prime shall only Indemnify the BMS Indemnitees for *** of any such Loss; or (e) the use by Five Prime, its Affiliates, contractors or (sub)licensees of Combined Therapy Study Data, Five Prime Study Data, Five Prime Study Inventions, Five Prime Study Patent Rights, Combined Therapy Inventions and Combined Therapy Patent Rights outside the scope of this Agreement (other than with respect to Third Party Claims that are covered under Section 6.4)), including in the conduct of a Parallel Study or Subsequent Study other than a Joint Subsequent Study) by Five Prime, but excluding, in each case ((a) through (e)), any such Losses to the extent BMS is obligated to Indemnify the Five Prime Indemnitees pursuant to Section 11.1 or to the extent that the Third Party Claim is attributable to a failure of the BMS Compound used by Five Prime in a Parallel Study or Subsequent Study to have been manufactured  in accordance with applicable specifications.

11.3Indemnification Procedure. Each Party’s agreement to Indemnify the other Party is conditioned on the performance of the following by the Party seeking indemnification: (a) providing written notice to the Indemnifying Party of any Loss of the types set forth in Section 11.1 and 11.2 within *** after the Party seeking indemnification has knowledge of such Loss; provided that any delay in complying with the requirements of this clause (a) will only limit the Indemnifying Party’s obligation to the extent of the prejudice caused to the Indemnifying Party by such delay; (b) permitting the Indemnifying Party to assume full responsibility to investigate, prepare for and defend against any such Loss; (c) providing reasonable assistance to the Indemnifying Party, at the Indemnifying Party’s expense, in the investigation of, preparation for and defense of any Loss; and (d) not compromising or settling such Loss without the Indemnifying Party’s written consent, such consent not to be unreasonably withheld or delayed.

11.4Separate Defense of Claims. In the event that the Parties cannot agree as to the application of Sections 11.1, 11.2 and/or 11.3 to any particular Loss, the Parties may conduct separate defenses of such Loss. Each Party further reserves the right to claim indemnity from the other in accordance with Sections 11.1, 11.2 and/or 11.3 upon resolution of the underlying claim, notwithstanding the provisions of Section 11.3(b).

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EXECUTION VERSION

 

11.5Insurance.  Each Party shall maintain commercially reasonable levels of insurance or other adequate and commercially reasonable forms of protection or self-insurance to satisfy its indemnification obligations under this Agreement.  Each Party shall provide the other Party with written notice at least *** prior to the cancellation, non-renewal or material change in such insurance or self-insurance which would materially adversely affect the rights of the other Party hereunder.  The maintenance of any insurance shall not constitute any limit or restriction on damages available to a Party under this Agreement.

11.6LIMITATION OF LIABILITY.

(a)NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES, INCLUDING BUT NOT LIMITED TO LOST PROFITS, ARISING FROM OR RELATING TO THIS AGREEMENT AND/OR SUCH PARTY’S PERFORMANCE HEREUNDER, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES AND REGARDLESS OF THE CAUSE OF ACTION (WHETHER IN CONTRACT, TORT, BREACH OF WARRANTY OR OTHERWISE).  NOTHING IN THIS SECTION 11.6(a) IS INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF A PARTY UNDER SECTIONS 11.1 OR 11.2, OR DAMAGES AVAILABLE FOR BREACHES OF CONFIDENTIALITY OBLIGATIONS IN ARTICLE 9 OR FOR A PARTY’S WILLFUL MISCONDUCT.

(b)EACH PARTY’S MAXIMUM, CUMULATIVE LIABILITY ARISING OUT OF OR RELATING TO A GIVEN COMBINED THERAPY TRIAL PERFORMED PURSUANT TO THIS AGREEMENT AND THE DEVELOPMENT PLAN AND/OR SUCH PARTY’S PERFORMANCE RELATING THERETO, REGARDLESS OF THE CAUSE OF ACTION (WHETHER IN CONTRACT, TORT, BREACH OF WARRANTY, INDEMNITY OR OTHERWISE), WILL NOT EXCEED IN THE AGGREGATE FOR ALL CLAIMS RELATING TO SUCH COMBINED THERAPY TRIAL THE GREATER OF (1) *** OR (2) *** OF ALL TOTAL TP STUDY COSTS INCURRED  FOR SUCH COMBINED THERAPY TRIAL; PROVIDED, HOWEVER, THAT NOTHING IN THIS SECTION 11.6(b) IS INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF A PARTY UNDER SECTIONS 11.1 OR 11.2, OR ANY DAMAGES AVAILABLE FOR BREACHES OF CONFIDENTIALITY OBLIGATIONS IN ARTICLE 9 OR FOR A PARTY’S WILLFUL MISCONDUCT.

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EXECUTION VERSION

 

Article 12

TERM AND TERMINATION

12.1Term.  This Agreement shall be effective as of the Effective Date and, unless earlier terminated pursuant to Sections 12.2, 12.3 or 12.4 or any other termination right expressly stated in this Agreement, shall continue in effect until the date which is ninety (90) days subsequent to completion by all centers or institutions participating in the Combined Therapy Trials, the delivery of all Study Data, including all completed case report forms, all final analyses and all final clinical study reports contemplated by the Combined Therapy Trials, to both Parties, and the completion of the Development Plan and any then-agreed upon Statistical Analysis and Bioanalysis Plan (the “Term”).

12.2Termination for Material Breach.

(a)Notice and Cure Period.  If a Party (the “Breaching Party”) is in material breach, the other Party (the “Non-Breaching Party”) shall have the right to give the Breaching Party notice specifying the nature of such material breach.  The Breaching Party shall have a period of *** after receipt of such notice to cure such material breach (the “Cure Period”) in a manner reasonably acceptable to the Non-Breaching Party.  For the avoidance of doubt, this provision is not intended to restrict in any way either Party’s right to notify the other Party of any other breach or to demand the cure of any other breach.

(b)Termination Right.  The Non-Breaching Party shall have the right to terminate this Agreement, upon written notice, in the event that the Breaching Party has not cured such material breach within the Cure Period, provided, however, that if such breach is capable of cure but cannot reasonably be cured within the Cure Period, and the Breaching Party notifies the non-Breaching Party of its intent to cure such material breach, commences actions to cure such material breach within the Cure Period and thereafter diligently continues such actions, the Breaching Party shall have an additional *** to cure such breach.  If a Party contests such termination pursuant to the dispute resolution procedures under Section 13.3, such termination shall not be effective until a conclusion of the dispute resolution procedures in Section 13.3, as applicable, resulting in a determination that there has been a material breach that was not cured within the Cure Period (or, if earlier, abandonment of the dispute by such Party).

12.3Termination for Bankruptcy.  Either Party may terminate this Agreement if, at any time, the other Party shall file in any court or agency pursuant to any statute or regulation of any state, country or jurisdiction, a petition in bankruptcy or insolvency or for reorganization or for an arrangement or for the appointment of a receiver or trustee of such other Party or of such other Party’s assets, or if the other Party proposes a written agreement of composition or extension of its debts, or if the other Party shall be served with an involuntary petition against it, filed in any insolvency proceeding, and such petition shall not be dismissed or stayed within *** after the filing thereof, or if the other Party will propose or be a party to any dissolution or liquidation, or if the other Party shall make an assignment for the benefit of its creditors.

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EXECUTION VERSION

 

12.4Termination due to Material Safety Issue; Clinical Hold.

(a)Either Party shall have the right to terminate this Agreement immediately upon written notice if it reasonably deems it necessary to protect the safety, health or welfare of subjects enrolled in any Combined Therapy Trial due to the existence of a Material Safety Issue.  In the event of a termination due to a Material Safety Issue, prior to the terminating Party providing written notice, each Party’s safety committee shall, to the extent practicable, meet and discuss in good faith the safety concerns raised by the terminating Party and consider in good faith the input, questions and advice of the non-terminating Party, but should any dispute arise in such discussion, the dispute resolution processes set forth in Sections 2.8 or 13.3 shall not apply to such dispute and the terminating Party shall have the right to issue such notice and such termination shall take effect without the Parties first following the procedures set forth in Sections 2.8 or 13.3.

(b)If a Clinical Hold with respect to either the BMS Compound or the Five Prime Compound should arise at any time after the Effective Date, the Parties will meet and discuss the basis for the Clinical Hold, how long the Clinical Hold is expected to last, and how they might address the issue that caused the clinical hold.  If, after ninety (90) days of discussions following the Clinical Hold, either Party reasonably concludes that the issue is not solvable or that unacceptable and material additional costs/delays have been and/or will continue to be incurred in the conduct of the Combined Therapy Trial, then such Party may immediately terminate this Agreement.

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EXECUTION VERSION

 

12.5Effect of Termination. Upon expiration or termination of this Agreement, (a) the licenses granted to each Party to conduct the activities in the Development Plan in Sections 3.1 and 3.2 shall terminate, but the license grants to conduct Subsequent Studies under Sections 3.1 and 3.2 (and section 5.3(d)(ix)) shall not terminate unless this Agreement is terminated pursuant to Sections 2.1(e), 12.2 (but termination of such license grant shall apply only to the Party who materially breached the Agreement), 12.3 (but termination of such license grant shall apply only to the licensee Party who is insolvent or bankrupt), 12.4(a), 12.4(b), (b) Rights of Cross-Reference to conduct a Parallel Study or Subsequent Study shall only be permitted shall only be permitted where the licensee Party has the right to conduct same under clause (a) of this Section 12.5, and (c) the Parties shall use reasonable efforts to wind down activities under this Agreement and the Development Plan in a reasonable manner and avoid incurring any additional expenditures or non-cancellable obligations; provided that, in the case of termination pursuant to Section 12.4, Five Prime may continue to dose subjects enrolled in any then ongoing Combined Therapy Trial through completion of the applicable Protocol if dosing is required by the applicable Regulatory Authority(ies) and/or Applicable Law(s). Any such wind-down activities will include the return to BMS, or destruction, of all BMS Compound provided to Five Prime and not consumed in the performance of the Development Plan.  If applicable, upon termination of this Agreement, the Parties shall remain responsible pursuant to the terms of this Agreement for any expenses incurred that are associated with terminating any ongoing clinical trial work and/or result from such ongoing activities under this Agreement solely to the extent such activities are deemed necessary by Five Prime (after discussion at a meeting of the JDC) based on reasonable medical judgment to protect the health of subjects participating in any Combined Therapy Trial.

12.6Survival.  The following Articles and Sections of this Agreement and all definitions relating thereto shall survive any expiration or termination of this Agreement for any reason: Section 2.1(b) (second sentence), Section 3.5(c)(iii)(6), Section 3.5(c)(iii)(9), Section 3.5(c)(iv), Section 3.5(c)(v), Section 5.1(a)(viii), Section 5.1(b)(iii), Section 5.4 (“Additional Studies”) (to the extent provided therein), Article 6 (“Intellectual Property”), Section 7.1 (“One-time Payment”), Section 7.2 (“Combined Therapy Trial Expenses”), Section 7.3 (“Invoicing; Payment”), Section 8.1 (“Records”), Section 8.2 (“Ownership of Study Data”), Section 8.3 (“Use of Study Data”), Section 8.4 (“Access to Study Data”), Section 8.5 (“Samples”), Article 9 (“Confidentiality”); Article 10 (“Representations and Warranties”), Article 11 (“Indemnification”), Section 12.5 (“Effect of Termination”), Section 12.6 (“Survival”), Section 13.1 (“Entire Agreement”), Section 13.2 (“Governing Law”), Section 13.3 (“Dispute Resolution”), Section 13.4 (“Injunctive Relief”), Section 13.6 (“Notices”), Section 13.7 (“No Waiver, Modifications”), Section 13.8 (“No Strict Construction”), Section 13.9 (“Independent Contractor”), Section 13.10 (“Assignment”), Section 13.11 (“Headings”), Section 13.13 (“Severability”), Section 13.15 (“No Benefit to Third Parties”), Section 13.16 (“Construction”).

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EXECUTION VERSION

 

Article 13

MISCELLANEOUS

13.1Entire Agreement. The Parties acknowledge that this Agreement shall govern all activities of the Parties with respect to the Development Plan  from the Effective Date forward.  This Agreement, including the Exhibits hereto and together with the Development Plan, Quality Agreement and Pharmacovigilance Agreement, sets forth the complete, final and exclusive agreement between the Parties concerning the subject matter hereof and supersedes all prior agreements and understandings between the Parties with respect to such subject matter.  There are no covenants, promises, agreements, warranties, representations, conditions or understandings, either oral or written, between the Parties with respect to such subject matter other than as are set forth in this Agreement.  All Exhibits attached hereto are incorporated herein as part of this Agreement.

13.2Governing Law.  This Agreement and all claims relating to or arising out of this Agreement or the breach thereof shall be governed and construed in accordance with the internal laws of the State of Delaware, USA, excluding any choice of law rules that may direct the application of the laws of another jurisdiction.

13.3Dispute Resolution.

(a)In the event of any dispute, controversy or claim arising out of, relating to or in connection with any provision of this Agreement (each a “Dispute”), other than a JDC Dispute or a Publication Dispute or a dispute as to whether a Material Safety Issue exists, the Parties shall refer such Dispute promptly to the Alliance Managers for resolution.  If the Alliance Managers are unable to resolve such Dispute within *** after a matter has been presented to them, then upon the request of either Party by written notice, the Parties shall refer such Dispute to the Executive Officers.  This Agreement shall remain in effect during the pendency of any such dispute.  In the event that no resolution is made by them in good faith negotiations within *** after such referral to them, such unresolved Dispute shall be referred to the Chief Executive Officer of Five Prime or his or her designee and the Chief Scientific Officer of BMS or his or her designee for attempted resolution by good faith negotiations within *** after such referral is made.  In the event such officers are unable to resolve such Dispute within such *** period then, if such Dispute constitutes an Arbitration Matter, such Dispute shall be resolved through arbitration in accordance with Section 13.3(b); provided, however, that with respect to any such Dispute that relates to a matter described in Section 13.4, either Party shall have the right to seek an injunction or other equitable relief without waiting for the expiration of such *** negotiation period, and with respect to any JDC Dispute or Publication Dispute, the specific dispute resolution processes contained in Sections 2.8 or 9.5(b), as applicable, will apply.

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EXECUTION VERSION

 

(b)If a Dispute that constitutes an Arbitration Matter remains unresolved after escalation to the senior executives as described above, either Party may refer the matter to arbitration as described herein. Any arbitration under this Agreement shall be conducted under the auspices of the American Arbitration Association (the “AAA”) by a panel of three (3) arbitrators pursuant to that organization’s Commercial Arbitration Rules then in effect; provided, however, that the Parties hereby agree that the time schedule for the appointment of arbitrators and the time schedule for submission of the statement of defense shall follow the American Arbitration Association Arbitration Rules.  The fees and expenses of the arbitrators shall be borne in equal shares by the Parties. Each Party shall bear the fees and expenses of its legal representation in the arbitration. The arbitral tribunal shall not reallocate either the fees and expenses of the arbitrators or of the Parties’ legal representation. The language of the arbitration shall be English.

(c)Disputes with respect to matters specifically set forth in Section 2.8(c) shall be resolved through baseball arbitration, in accordance with the Commercial Arbitration Rules of the AAA then in effect.  Baseball arbitration will be conducted by one (1) arbitrator who shall be reasonably acceptable to the Parties and who shall be appointed in accordance with AAA rules.  If the Parties are unable to select an arbitrator within *** of the date that the Executive Officers decide to escalate any applicable matter to arbitration, then the arbitrator shall be appointed in accordance with AAA rules. Any arbitrator chosen hereunder shall have educational training and industry experience sufficient to demonstrate a reasonable level of scientific, financial, medical and industry knowledge relevant to the particular dispute. Within *** after the selection of the arbitrator, each Party shall submit to the arbitrator and the other Party a proposed resolution of the dispute that is the subject of the arbitration, together with any relevant evidence in support thereof (the “Proposals”).  Within *** after the delivery of the last Proposal to the arbitrator, each Party may submit a written rebuttal of the other Party’s Proposal and may also amend and re-submit its original Proposal.  The Parties and the arbitrator shall meet within *** after the Parties have submitted their final Proposals (and rebuttals, if any), at which time each Party shall have *** to argue in support of its Proposal.  The Parties shall not have the right to call any witnesses in support of their arguments, nor compel any production of documents or take any discovery from the other Party in preparation for the meeting. Within *** after such meeting, the arbitrator shall select one of the final Proposals so submitted by one of the Parties as the resolution of the dispute, but may not alter the terms of either final Proposal and may not resolve the dispute in a manner other than by selection of one of the submitted final Proposals. If a Party fails to submit a Proposal within the initial time frame set forth in the fourth sentence of this Section 13.3(c), the arbitrator shall select the Proposal of the other Party as the resolution of the dispute. Any time period set forth in this Section 13.3(c) may be extended by agreement of the Parties.

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EXECUTION VERSION

 

13.4Injunctive Relief.  Notwithstanding anything herein to the contrary, a Party may seek an injunction or other injunctive relief from any court of competent jurisdiction in order to prevent immediate and irreparable injury, loss or damage on a provisional basis.  For the avoidance of doubt, if either Party (a) discloses Confidential Information of the other Party other than as permitted under Article 9, (b) uses (in the case of Five Prime) the BMS Compound or BMS Technology or (in the case of BMS) the Five Prime Compound or Five Prime Technology in any manner other than as expressly permitted under this Agreement or (c) otherwise is in material breach of this Agreement and such material breach could cause immediate harm to the value of the Five Prime Compound (by BMS) or the BMS Compound (by Five Prime), the other Party shall have the right to seek an injunction or other equitable relief precluding the other Party from continuing its activities related to the applicable activity without waiting for the conclusion of the dispute resolution procedures under Section 13.3.

13.5Force Majeure. The Parties shall be excused from the performance of their obligations under this Agreement (other than the payment of monies owed to the other Party) to the extent that such performance is prevented by force majeure and the non-performing Party promptly provides notice of the prevention to the other Party.  Such excuse shall be continued so long as the condition constituting force majeure continues and the nonperforming Party takes reasonable efforts to remove the condition.  For purposes of this Agreement, force majeure shall mean acts of God, strikes or other concerted acts of workers (except for strikes or other concerted acts of a Party’s respective workers), civil disturbances, fires, earthquakes, acts of terrorism, floods, explosions, riots, war, rebellion, sabotage or failure or default of public utilities or common carriers or similar conditions beyond the control of the Parties.

13.6Notices.  Any notice required or permitted to be given under this Agreement shall be in writing, shall specifically refer to this Agreement and shall be deemed to have been sufficiently given for all purposes if such notice is timely and is: (a) mailed by first class certified or registered mail, postage prepaid, return receipt requested, (b) sent by express delivery service, or (c) personally delivered.  Unless otherwise specified in writing, the mailing addresses of the Parties shall be as described below.

	
For Five Prime:
	
Five Prime Therapeutics, Inc.

	
 
	
2 Corporate Drive

	
 
	
South San Francisco, California 94080

	
 
	
Attention:  Chief Business Officer

 

	
With a copy to:
	
Five Prime Therapeutics, Inc.

	
 
	
2 Corporate Drive

	
 
	
South San Francisco, California 94080

	
 
	
Attention:  General Counsel

 

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EXECUTION VERSION

 

	
For BMS:
	
Bristol-Myers Squibb Company

	
 
	
Route 206 and Province Line Road

	
 
	
Princeton, NJ 08543-4000

	
 
	
Attention: VP, Business Development

 

	
With a copy to:
	
Bristol-Myers Squibb Company

	
 
	
Route 206 and Province Line Road

	
 
	
Princeton, NJ 08543-4000

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

 

Any such communication shall be deemed to have been received when delivered.  It is understood and agreed that this Section 13.6 is not intended to govern the day-to-day business communications necessary between the Parties in performing their duties, in due course, under the terms of this Agreement.

13.7No Waiver; Modifications.  It is agreed that no waiver by a Party 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.  The failure of either Party to insist on the performance of any obligation hereunder shall not be deemed to be a waiver of any such obligation.  No amendment, modification, release or discharge shall be binding upon the Parties unless in writing and duly executed by authorized representatives of both Parties.

13.8No Strict Construction.  This Agreement has been prepared jointly and shall not be strictly construed against either Party. No presumption as to construction of this Agreement shall apply against either Party with respect to any ambiguity in the wording of any provision(s) of this Agreement irrespective of which Party may be deemed to have authored the ambiguous provision(s).

13.9Independent Contractor.  The Parties are independent contractors of each other, and the relationship between the Parties shall not constitute a partnership, joint venture or agency. Neither Party shall be the agent of the other or have any authority to act for, or on behalf of, the other Party in any matter.

13.10Assignment; Licensees.

(a)Assignment.  Neither Party may assign or transfer this Agreement or any rights or obligations hereunder without the prior written consent of the other Party, except that a Party may make such an assignment without the other Party’s consent (a) to an Affiliate, (b) to a Third Party that merges with, consolidates with or acquires substantially all of the assets or voting control of the assigning Party or (c) to a Third Party that acquires all the rights to the Five Prime Compound, in the case of Five Prime, or the BMS Compound, in the case of BMS. Any assignment or attempted assignment by any Party in violation of the terms of this Section 13.10 shall be null and void and of no legal effect.

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EXECUTION VERSION

 

(b)Licensees.  If a Party grants a Third Party a license (other than a license solely to make a Product for a Party and other than any license rights granted to Ono for the Ono Territory) to develop and commercialize its Single Agent Compound on a worldwide basis or in any geographic region and/or for all purposes or a limited field, (a “Licensee”), such Party will obtain the Licensee’s agreement to abide by the terms of this Agreement in the same manner as the licensor Party and to not take any action that is inconsistent with such Party’s obligations under Section 5.4.

13.11Headings.  The captions to the several Sections and Articles hereof are not a part of this Agreement, but are included merely for convenience of reference only and shall not affect its meaning or interpretation.

13.12Counterparts.  This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one (1) and the same instrument.  This Agreement may be executed by facsimile or electronic (e.g., .pdf) signatures and such signatures shall be deemed to bind each Party as if they were original signatures.

13.13Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of a Party under this Agreement will not be materially and adversely affected thereby, (a) such provision shall be fully severable, (b) this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and reasonably acceptable to the Parties.

13.14Further Assurance. Each Party shall duly execute and deliver, or cause to be duly executed and delivered, such further instruments and do and cause to be done such further acts and things, including the filing of such assignments, agreements, documents and instruments, as may be necessary or as the other Party may reasonably request in order to perfect any license, assignment or other transfer or any properties or rights under, or pursuant, to this Agreement.

13.15No Benefit to Third Parties.  The representations, warranties and agreements set forth in this Agreement are for the sole benefit of the Parties and their successors and permitted assigns, and they shall not be construed as conferring any rights on any other parties.

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EXECUTION VERSION

 

13.16Construction.

(a)General.  Except as otherwise explicitly specified to the contrary, (a) references to a Section, Article or Exhibit means a Section or Article of, or Exhibit to, this Agreement and all subsections thereof, unless another agreement is specified; (b) references to a particular statute or regulation include all rules and regulations promulgated thereunder and any successor statute, rules or regulations then in effect, in each case including the then-current amendments thereto; (c) words in the singular or plural form include the plural and singular form, respectively; (d) the terms “including,” “include(s),” “such as,” and “for example” used in this Agreement mean including the generality of any description preceding such term and will be deemed to be followed by “without limitation”; and (e) the words “hereof,” “herein,” “hereunder,” “hereby” and derivative or similar words refer to this Agreement.   No presumption as to construction of this Agreement shall apply against either Party with respect to any ambiguity in the wording of any provision(s) of this Agreement irrespective of which Party may be deemed to have authored the ambiguous provision(s).

(b)No Response.  Where a provision of this Agreement provides for a Party to respond within a designated period following written notice from the other Party (e.g., Sections 5.1(a)(vi) and 5.1(b)(iv), and if such Party fails to respond, then the failure to respond shall not be deemed to create or imply: (i) that the non-responding Party agrees or disagrees with the proposed action to be taken by the other Party, (ii) any amendment, change or waiver of the terms of this Agreement, or (iii) any consent that an action proposed to be taken may be taken if it conflicts with the terms of this Agreement and/or waiver of any rights it may have to seek remedies at law or in equity for breach of this Agreement as a result of the action taken.

[Signature page follows]

 

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EXECUTION VERSION

 

IN WITNESS WHEREOF, the Parties, intending to be legally bound hereby, have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date.

 

		
	
Five Prime Therapeutics Inc.
	
Bristol-Myers Squibb Company

	
By: /s/ Lewis T. Williams                  

Lewis T. Williams

President and Chief Executive Officer

 

 
	
By: /s/ Lynne M. Croucher                

Name: Lynne M. Croucher                

Title: Executive Director, BD            

	
Date: November 21, 2014                 
	
Date: November 21, 2014                 

 

 

[SIGNATURE PAGE TO CLINICAL TRIAL COLLABORATION AGREEMENT]

 

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EXECUTION VERSION

 

Exhibit Index

Attached:

Exhibit A:Bioanalysis Plan

Exhibit B:Protocol Synopsis Template

Exhibit C:Press Release

Exhibit D:Potential Countries for Subsequent/Parallel Studies

 

 

- i –

 

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EXECUTION VERSION

 

EXHIBIT A

BIOANALYSIS PLAN

***

 

 

 

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EXECUTION VERSION

 

EXHIBIT B

PROTOCOL SYNOPSIS TEMPLATE

Clinical Protocol PROTOCOL NUMBER

 

Protocol Title:  Protocol Title

 

Investigational Product(s), Dose and Mode of Administration, Duration of Treatment with Investigational Product(s):  [Click here to enter text]

 

Study Phase:  [Click here to enter text]

 

Research Hypothesis:  [Click here to enter text]

 

Objectives:  [Click here to enter text]

 

Study Design:  [Click here to enter text]

[Do not insert page break. Click here to add schematic]

 

Study Population:  [Click here to enter text]

Study Drug: includes both Investigational [Medicinal] Products (IP/IMP) and Non-investigational [Medicinal] Products (Non-IP/Non-IMP) as listed:

			
	
Study Drug for XXXXXXXX

	
Medication 
	
Potency 
	
IP/Non-IP 

	
 
	
 
	
 

 

Study Assessments:  [Click here to enter text]

 

Statistical Considerations:

Sample Size:  [Click here to enter text]

Endpoints:  [Click here to enter text]

Analyses:  [Click here to enter text]

 

Page B-1

 

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EXECUTION VERSION

 

EXHIBIT C

PRESS RELEASE

 

	

	

 

Bristol-Myers Squibb and Five Prime Therapeutics Announce Exclusive Clinical Collaboration to Evaluate the Combination of Investigational Immunotherapies Opdivo (nivolumab) and FPA008 in Six Tumor Types 

(NEW YORK and SOUTH SAN FRANCISCO, CA – November 24, 2014) - Bristol-Myers Squibb Company (NYSE:BMY) and Five Prime Therapeutics, Inc. (Nasdaq:FPRX) today announced that they have entered into an exclusive clinical collaboration agreement to evaluate the safety, tolerability and preliminary efficacy of combining Opdivo (nivolumab), Bristol-Myers Squibb’s investigational PD-1 immune checkpoint inhibitor, with FPA008, Five Prime’s monoclonal antibody that inhibits colony stimulating factor-1 receptor (CSF1R). The Phase 1a/1b study will evaluate the combination of Opdivo and FPA008 as a potential treatment option for patients with non-small cell lung cancer (NSCLC), melanoma, head and neck cancer, pancreatic cancer, colorectal cancer and malignant glioma. Bristol-Myers Squibb has proposed the name Opdivo, which, if approved by health authorities, will serve as the trademark for nivolumab.

Opdivo and FPA008 are part of a new class of cancer treatments known as immunotherapies that are designed to harness the body’s own immune system to fight cancer. Opdivo is approved in Japan for the treatment of patients with unresectable melanoma, and is being developed in multiple tumor types in more than 50 clinical trials. FPA008, in development as a potential treatment for rheumatoid arthritis (RA) and solid tumors, has initiated dosing for a Phase 1 clinical trial in RA. Preclinical data suggest that combining antibodies targeting PD-1 and CSF1R may lead to an enhanced anti-tumor immune response compared to either approach alone in treating cancer.

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EXECUTION VERSION

 

“This collaboration supports our strategy to expand the clinical development of Opdivo, including novel combination regimens and across numerous tumor types,” said Michael Giordano, senior vice president, Head of Development, Oncology, Bristol-Myers Squibb. “We are excited to build upon our existing relationship with Five Prime Therapeutics in immuno-oncology, and explore the full potential of Opdivo and FPA008 in multiple tumor types.” 

“We are pleased to establish a second collaboration with Bristol-Myers Squibb in the area of immuno-oncology,” said Lewis T. “Rusty” Williams, M.D., Ph.D., president and chief executive officer of Five Prime. “Their vision aligns with our commitment to advancing promising immune-modulating targets, alone or in combination, to create next-generation immunotherapies for cancer patients. We look forward to initiating this study and expanding the development of FPA008 as a potential immunotherapy for these six types of cancer.”

Under the terms of this agreement, Bristol-Myers Squibb will make a one-time payment of $30 million to Five Prime and will be responsible for study costs. Five Prime will conduct the clinical trial, which is expected to begin in the second half of 2015. The agreement provides for exclusivity with respect to the development, with a collaborative partner, of combination regimens of an anti-PD-1/PD-L1 antagonist together with an anti-CSF1R antagonist. Bristol-Myers Squibb will have a time-limited right of first refusal subject to certain conditions if Five Prime wishes to seek a partner for FPA008. 

About Opdivo (nivolumab)

Cancer cells may exploit “regulatory” pathways, such as checkpoint pathways, to hide from the immune system and shield the tumor from immune attack. Opdivo is an investigational, fully-human PD-1 (programmed death-1) immune checkpoint inhibitor that binds to the checkpoint receptor PD-1 expressed on activated T-cells. 

 

Bristol-Myers Squibb has a broad, global development program to study Opdivo in multiple tumor types consisting of more than 50 trials – as monotherapy or in combination with other therapies – in which more than 7,000 patients have been enrolled worldwide. Among these are several potentially registrational trials in non-small cell lung cancer (NSCLC), melanoma, renal cell carcinoma (RCC), head and neck cancer, glioblastoma and NHL. 

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In 2013, the FDA granted Fast Track designation for Opdivo in NSCLC, melanoma and RCC. In April 2014, the company initiated a rolling submission with the FDA for Opdivo in third-line pre-treated squamous cell NSCLC and expects to complete the submission by year-end. The FDA granted its first Breakthrough Therapy Designation for Opdivo in May 2014 for the treatment of patients with Hodgkin lymphoma after failure of autologous stem cell transplant and brentuximab. On July 4, Ono Pharmaceutical Co. announced that Opdivo received manufacturing and marketing approval in Japan for the treatment of patients with unresectable melanoma, making Opdivo the first PD-1 immune checkpoint inhibitor to receive regulatory approval anywhere in the world. On September 26, Bristol-Myers Squibb announced that the FDA accepted for priority review the Biologics License Application for previously treated advanced melanoma, and the Prescription Drug User Fee Act goal date for a decision is March 30, 2015. The FDA also granted Opdivo Breakthrough Therapy status for this indication. In the European Union, the European Medicines Agency (EMA) has validated for review the Marketing Authorization Application (MAA) for Opdivo in advanced melanoma. The application has also been granted accelerated assessment by the EMA’s Committee for Medicinal Products for Human Use. The EMA also validated for review the MAA for Opdivo in NSCLC. 

About FPA008

FPA008, an antibody that inhibits colony stimulating factor-1 receptor (CSF1R), blocks the activation and survival of monocytes and macrophages. Inhibition of CSF1R in inflamed RA joints blocks the production of inflammatory cytokines by macrophages and inhibits osteoclasts, monocyte-lineage cells that can cause bone erosions and joint destruction. Inhibition of CSF1R in many cancers reduces the number of immunosuppressive tumor-associated macrophages (TAMs), thereby facilitating an immune response against tumors. 

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About Bristol-Myers Squibb 

Bristol-Myers Squibb is a global biopharmaceutical company whose mission is to discover, develop and deliver innovative medicines that help patients prevail over serious diseases. For more information, please visit www.bms.com or follow us on Twitter at http://twitter.com/bmsnews. 

About Five Prime Therapeutics

Five Prime Therapeutics, Inc. discovers and develops innovative therapeutics to improve the lives of patients with serious diseases. Five Prime's comprehensive discovery platform, which encompasses virtually every medically relevant extracellular protein, positions it to explore pathways in cancer, inflammation and their intersection in cancer immunotherapy, an area of oncology with significant therapeutic potential and a growing focus of the company's R&D activities. Five Prime has entered into strategic collaborations with leading global pharmaceutical companies and has promising product candidates in clinical and late preclinical development. For more information, please visit www.fiveprime.com.

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Bristol-Myers Squibb Forward-Looking Statement

This press release contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995 regarding the research, development and commercialization of pharmaceutical products. Such forward-looking statements are based on current expectations and involve inherent risks and uncertainties, including factors that could delay, divert or change any of them, and could cause actual outcomes and results to differ materially from current expectations. No forward-looking statement can be guaranteed. Among other risks, there can be no guarantee that nivolumab will receive regulatory approval in the U.S. either as a single agent or in a combination regimen, or, if approved, that it will become a commercially successful product. Forward-looking statements in this press release should be evaluated together with the many uncertainties that affect Bristol-Myers Squibb's business, particularly those identified in the cautionary factors discussion in Bristol-Myers Squibb's Annual Report on Form 10-K for the year ended December 31, 2013 in our Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. Bristol-Myers Squibb undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. 

Five Prime Forward-Looking Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "expect," "plan," "anticipate," "estimate," "intend" and similar expressions (as well as other words or expressions referencing future events, conditions or circumstances) are intended to identify forward-looking statements. These forward-looking statements are based on Five Prime's expectations and assumptions as of the date of this press release. Each of these forward-looking statements involves risks and uncertainties. Actual results may differ materially from these forward-looking statements. Forward-looking statements contained in this press release include statements regarding the planned clinical development of a combination of FPA008 and nivolumab. Factors that may cause actual results to differ from those expressed or implied in the forward-looking statements in this press release are discussed in Five Prime's filings with the U.S. Securities and Exchange Commission, including the "Risk Factors" contained therein. Except as required by law, Five Prime assumes no obligation to update any forward-looking statements contained herein to reflect any change in expectations, even as new information becomes available.

 

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Contacts 

 

Bristol-Myers Squibb

 

Media: 

Ken Dominski, 609-252-5251, ken.dominski@bms.com

 

Investors: 

Ranya Dajani, 609-252-5330, ranya.dajani@bms.com

Ryan Asay, 609-252-5020, ryan.asay@bms.com

 

Five Prime Therapeutics:

Amy Kendall, 415-365-5776, amy.kendall@fiveprime.com

 

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EXHIBIT D

POTENTIAL COUNTRIES FOR SUBSEQUENT/PARALLEL STUDIES

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