RESEARCH COLLABORATION AND LICENSE AGREEMENT by and between GlaxoSmithKline LLC and Five Prime Therapeutics, Inc. RESEARCH COLLABORATION AND LICENSE AGREEMENT

“Advanced Reserved Target” shall have the meaning set forth in Section 3.4.1(d)(i)(6)(aa).

“Advanced Stage” shall have the meaning set forth in Section 3.4.1(d)(i)(6)(aa).

“Affiliate” shall mean, any Person, whether de jure or de facto, that directly or indirectly controls, is controlled by, or is under common control with that Party. A Person shall be deemed to “control” another Person if it (a) owns, directly or indirectly, fifty percent (50%) or more of the outstanding shares of stock (or such lesser percentage which is the maximum allowed to be owned by a Person in a particular jurisdiction) entitled to vote for the election of directors, in the case of a corporation, or has comparable ownership interest in the case of any Person other than a corporation, or (b) controls or has the right to control, whether pursuant to contract, ownership of securities or otherwise, the board of directors or equivalent governing body of a Person, or the ability to cause the direction of the management or policies of a Person.

“Agreement” shall have the meaning set forth in the preamble of this Agreement.

“Alliance Manager” shall have the meaning set forth in Section 2.3.

“Arbitration Demand” shall have the meaning set forth in Section 12.6.2.

“Bankruptcy Code” shall have the meaning set forth in Section 10.4.

“Biologic” shall mean, with respect to a Target: (a) such Target or a fragment or derivative thereof; (b) a sequence variant of such Target, or a fragment or derivative of such sequence variant; (c) a protein, antibody or peptide in any form that inhibits, activates or otherwise modulates the activity of such Target or its sequence variant, fragment and/or derivative; or (d) a nucleic acid-containing molecule comprising a nucleotide sequence (RNA or DNA) that encodes any of the molecules described in (a)-(c) above.

“Biologics Target” shall have the meaning set forth in Section 3.4.2 (b)(ii).

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

“Business Day” shall mean any day other than (a) a Saturday, Sunday or other day on which banks in the State of New York are permitted or required to close by law or regulation, or (b) the period of time beginning on December 24 and continuing until the first weekday that GSK re-opens for business following January 1.

“Business Entity” shall have the meaning set forth in Section 4.5.

“Calendar Quarter” shall mean the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31.

“Calendar Year” shall mean each successive period of twelve (12) months commencing on January 1 and ending on December 31.

“Change of Control” shall have the meaning set forth in Section 12.2.3.

“Chief Patent Counsels” shall have the meaning set forth in Section 2.4.3.

“Claimed Target” shall mean an Offered Hit that has become a Claimed Target pursuant to Section 3.4.2(b)(i). A Claimed Target shall cease to be a Claimed Target when it becomes a Reverted Target pursuant to Section 3.4.1(b), 3.4.2(b)(i), 3.4.4(c) or 4.4.5(d)(ii), or a Committed Lead Target pursuant to Section 3.4.4(a).

“Claimed Targets Basket” shall have the meaning set forth in Section 3.4.2(b)(i).

“Claimed Target Data” shall have the meaning set forth in Section 3.4.3.

“Claiming Fee” shall have the meaning set forth in Section 6.3.1.

“Claiming Option” shall have the meaning set forth in Section 3.4.2(b)(i).

“Claiming Option Period” shall have the meaning set forth in Section 3.4.2(b)(i).

“Clinical Trial” shall mean a Phase 1 Clinical Trial, Phase 2 Clinical Trial, and/or Phase 3 Clinical Trial.

“Collaboration Patents” shall mean, collectively, FivePrime Collaboration Patent Rights, GSK Evaluation Patent Rights and Joint Patent Rights. For clarity, Collaboration Patents does not include GSK Licensed Product Patent Rights or GSK Background Patent Rights.

“Combination Product” shall mean a product that incorporates at least one Licensed Product and at least one additional therapeutically active ingredient that is not a Licensed Product.

“Commercially Reasonable Efforts” shall mean: (a) where applied to carrying out specific tasks and obligations under the Research Plan, deploying appropriate resources commensurate with the tasks or obligation, and carrying out such task or obligation in a sustained manner; and (b) where applied to the development and/or commercialization activities of a Party hereunder, the

efforts and resources that such Party would use as part of an active and continuing program of development and/or commercialization of a pharmaceutical product owned by such Party, of a market potential similar to the market potential of a Licensed Product under evaluation, at a similar stage of its product life, taking into account the establishment of the Licensed Product in the marketplace, the competitiveness of the marketplace, the proprietary position of the Licensed Product, the regulatory status involved, the pricing, reimbursement and launching strategy and the relative safety and efficacy of the Licensed Product.

“Committed Lead Target” shall mean a Claimed Target for which GSK has exercised its Selection Option pursuant to Section 3.4.4, which has not become a Terminated Target pursuant to Section 10.5.1(e).

“Competing Activity” shall have the meaning set forth in Section 4.5.

“Compound” shall mean, with respect to a Target, any chemical molecule (including without limitation any small molecule, aptamer, antisense or RNAi) that (a) has the ability to inhibit, activate or otherwise modulate the activity of such Target, or a sequence variant, fragment and/or derivative thereof, and (b) is not a Biologic.

“Compound Target” shall have the meaning set forth in Section 3.4.2(b)(ii).

“Confidential Information” shall have the meaning set forth in Section 7.1.

“Contractor” shall have the meaning set forth in Section 3.5.3.

“Control”, “Controls” or “Controlled by” shall mean with respect to any intellectual property right, the possession of (whether by ownership or license, other than licenses granted pursuant to this Agreement) or the ability of a Party to grant access to, or a license or sublicense of, such right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party existing at the time such Party would be required hereunder to grant the other Party such access or license or sublicense.

“Cover” shall mean, with respect to a claim of a Patent, a claim that claims (a) the composition of matter of, (b) the primary screening method of detecting or measuring an activity, property or characteristics of, or (c) a method of making or using, in each of (a), (b) and (c), a Target, or a Biologic or Compound with respect to such Target. For clarity, a Valid Claim that Covers a class of modulators of a Target shall be deemed to Cover a Biologic or Compound that is included within such class.

“Disclosing Party” shall have the meaning set forth in Section 7.1.

“ECD Product” means a Licensed Product comprising a Biologic that constitutes: (a) the extra-cellular domain of a Target which is a membrane-spanning protein (the “Original ECD”); (b) a fragment of such Original ECD; or (c) a variant of such Original ECD or fragment thereof, provided that the amino acid sequence of the portion of the Original ECD or fragment thereof that is included in such variant is greater than *** percent (***%) identical to the amino acid sequence of the Original ECD or fragment thereof, in each case of (a) through (c) above, which may or may not be fused or otherwise linked to an Fc domain or any other domain.

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

“EMEA” shall mean the European Medicines Agency, or any successor thereof.

“Equity Agreements” shall mean the Stock Purchase Agreement and related equity agreements attached as Exhibit 1.

“EU” shall mean the European Union, as its membership may be altered from time to time, any successor thereto and any country included therein.

“Expanded Research Plan” shall have the meaning set forth in Section 3.3.2(d).

“Expanded Research Program Term” shall mean, for a particular Research Indication for which GSK expands the Research Program for such Research Indication pursuant to Section 3.3.2, the period of time that has been agreed upon by the Parties under the Expanded Research Plan for such expanded research activities for such Research Indication.

“Expansion Fee” shall have the meaning set forth in Section 6.2.2(a).

“Expanded Muscle Diseases Research Plan” shall have the meaning set forth in Section 3.3.2(a).

“FDA” shall mean the United States Food and Drug Administration, or any successor entity thereof.

“Field” shall mean the use of any Licensed Product for the prevention, treatment, palliation or cure of human diseases and conditions.

“First Commercial Sale” shall mean, with respect to a particular Licensed Product in a particular country, the first sale of such Licensed Product in such country following the receipt of Marketing Authorization. First Commercial Sale shall specifically exclude sales or transfers for clinical study purposes or compassionate use, named-patient, indigent patient or similar uses, if such uses do not result in monetary compensation to GSK above the cost of goods.

“FivePrime” shall have the meaning set forth in the preamble of this Agreement.

“FivePrime Background Know-How” shall mean any and all Know-How that is (a) Controlled by FivePrime and/or its Affiliates as of the Effective Date or at any time during the Term; and (b) developed by or on behalf of FivePrime and/or its Affiliates outside of the conduct of the Research Program. FivePrime Background Know-How shall exclude Know-How included in FivePrime Platform Technology.

“FivePrime Background Patent Rights” shall mean any and all Patents that (a) are Controlled by FivePrime and/or its Affiliates as of the Effective Date or at any time during the Term; and (b) arose outside of the conduct of the Research Program. FivePrime Background Patent Rights shall exclude Patents included in FivePrime Platform Technology.

“FivePrime *** Technology” shall have the meaning set forth in Section 4.2.3(b).

“FivePrime Collaboration Know-How” shall mean any and all Know-How that (a) is Controlled by FivePrime and/or its Affiliates during the Term, and (b) arose from the conduct of the Research Program by or on behalf of FivePrime and/or its Affiliates pursuant to this Agreement, but excluding any Know-How included in the FivePrime Platform Technology and FivePrime Background Know-How, and excluding FivePrime’s interest in Joint Know-How.

“FivePrime Collaboration Patent Rights” shall mean any and all Patents that (a) are Controlled by FivePrime and/or its Affiliates during the Term, and (b) arose from the conduct of the Research Program by or on behalf of FivePrime and/or its Affiliates, but excluding any Patents included in the FivePrime Platform Technology and FivePrime Background Patent Rights, and excluding FivePrime’s interest in Joint Patent Rights.

“FivePrime Indemnitee” shall have the meaning set forth in Section 11.2.

“FivePrime Library” shall mean FivePrime’s proprietary library in its current form at the time the applicable Screening Assay is conducted, comprising (a) *** (b) ***.

“FivePrime Losses” shall have the meaning set forth in Section 11.2.

“FivePrime Platform Patents” shall have the meaning set forth in Section 8.2.1(a).

“FivePrime Platform Technology” shall mean any and all Patents and Know-How that Cover or relate to Five Prime’s proprietary technology and that are Controlled by FivePrime and/or its Affiliates as of the Effective Date or during the Research Program Term, which technology includes: (a) the FivePrime Library, including but not limited to, the design, composition and method of generation of the FivePrime Library; (b) FivePrime’s protein expression technology; (c) FivePrime’s in vivo and/or in vitro screening technology, including the *** technology); and (d) bioinformatics software applications and data.

“FivePrime Reverted Target Exclusivity Period” shall have the meaning set forth in Section 4.4.5(d)(ii)(2).

“FTC” shall have the meaning set forth in Section 3.4.5.

“GSK” shall have the meaning set forth in the preamble of this Agreement.

“GSK Background Know-How” shall mean any and all Know-How that (a) is Controlled by GSK and/or its Affiliates as of the Effective Date or at any time during the Research Program Term, and (b) is developed by or on behalf of GSK or its Affiliates outside of the conduct of the Research Program. For clarity, GSK Background Know-How may include GSK’s proprietary muscle screening assay technology.

“GSK Background Patent Rights” shall mean any and all Patents that (a) are Controlled by GSK and/or its Affiliates as of the Effective Date or during the Research Program Term, and (b) arose outside of the conduct of the Research Program.

“GSK Evaluation Know-How” shall mean any and all Know-How that (a) is Controlled by GSK and/or its Affiliates during the Term, and (b) arose as a direct result of GSK’s activities under the Research Program (or, with respect to such GSK Evaluation Know-How that pertains to a particular Target, arose as a direct result of GSK’s activities under the Research Program until the date upon which such Target becomes a Committed Lead Target or a Reverted Target, as applicable). GSK Evaluation Know-How shall exclude GSK’s interest in any Joint Know-How, GSK Licensed Product Know-How, and GSK Background Know-How.

“GSK Evaluation Patents” shall mean any and all Patents that (a) are Controlled by GSK and/or its Affiliates during the Term, and (b) arose from GSK’s activities under the Research Program (or, with respect to such GSK Evaluation Know-How that pertains to a particular Target, arose as a direct result of GSK’s activities under the Research Program until the date upon which such Target becomes a Committed Lead Target or a Reverted Target, as applicable). GSK Evaluation Patents shall exclude GSK’s interest in any Joint Patent Rights, GSK Licensed Product Patent Rights, and GSK Background Patent Rights.

“GSK Indemnitee” shall have the meaning set forth in Section 11.1.

“GSK Losses” shall have the meaning set forth in Section 11.1.

“GSK Licensed Product Know-How” shall mean, with respect to a Committed Lead Target and/or its corresponding Licensed Products, any and all Know-How that is Controlled by GSK and/or its Affiliates during the Term that arose from the development, manufacture, and/or commercialization of such Committed Lead Target and/or Licensed Products, as applicable, by or on behalf of GSK, but excluding GSK Background Know-How and GSK Evaluation Know-How. Notwithstanding the foregoing, when the term “GSK Licensed Product Know-How” is applied to GSK’s license grant to FivePrime under Section 10.5.1(d) with respect to any Terminated Product, GSK Licensed Product Know-How shall only include any and all Know-How that is Controlled by GSK and/or its Affiliates as of the date such Terminated Product becomes a Terminated Product that: (a) is incorporated into such Terminated Product as of the date such Terminated Product becomes a Terminated Product, or (b) is *** for the manufacture, sale or use of such Terminated Product as of the date such Terminated Product becomes a Terminated Product.

“GSK Licensed Product Patent Rights” shall mean, with respect to a Committed Lead Target and/or its corresponding Licensed Products, any and all Patents that are Controlled by GSK and/or its Affiliates during the Term, that arose from the development, manufacture and/or commercialization of such Committed Lead Target and/or Licensed Products, as applicable, by or on behalf of GSK, but excluding GSK Background Know-How and GSK Evaluation Know-How. Notwithstanding the foregoing, when the term “GSK Licensed Product Patent Rights” is applied to GSK’s license grant to FivePrime under Section 10.5.1(d) with respect to any Terminated Product, GSK Licensed Product Patents shall include any and all Patents that are Controlled by GSK and/or its Affiliates as of the date such Terminated Product becomes a

Terminated Product that: (a) are incorporated in such Terminated Product as of the date such Terminated Product becomes a Terminated Product, or (b) are *** for the manufacture, sale or use of such Terminated Product as of the date such Terminated Product becomes a Terminated Product.

“GSK Reverted Target Exclusivity Period” shall have the meaning set forth in Section 4.4.5(d)(ii)(2).

“GSK Reverted Target Product” shall have the meaning set forth in Section 4.4.5(d)(ii)(3).

“***” shall mean ***. For clarity, a *** shall be designed to have the primary objective of the ***.

“*** Expansion Period” shall have the meaning set forth in Section 3.3.2(b).

“*** Research Plan” shall have the meaning set forth in Section 3.3.2(b).

“***” shall mean a *** that is a *** consisting of ***, each originating from a separate *** (i.e., each such *** representing a *** together with all other *** from the same *** that has been demonstrated or is reasonably likely to have potential therapeutic activity in the respective disease).

“Hit” shall mean a Target that: (a) when such Target or a fragment thereof was tested by FivePrime in a Screening Assay pursuant to the Research Program, satisfies the threshold for activity or inhibition and reproducibility as determined by the Working Group; (b) is not a Reserved Target (subject to Section 3.4.1(d)(i)(6)); and (c) is not a Third Party Target. A Hit shall cease to be a Hit when it becomes a Reverted Target or an Offered Hit, in each case pursuant to Section 3.4.1(b) or Section 4.4.5(d)(ii).

“HSR” shall have the meaning set forth in Section 3.4.5.

“IND” shall mean any investigational new drug application filed with the FDA pursuant to Part 312 of Title 21 of the U.S. Code of Federal Regulations, including any amendments thereto. References herein to IND shall include, to the extent applicable, any comparable filing(s) outside of the U.S. (such as a CTA in the European Union).

“Independent Assay” shall mean any assay performed by FivePrime outside the scope of the Research Program to which no Third Party has any contractual rights.

“Initiates,” “Initiated” or “Initiation” shall mean, with respect to a Clinical Trial, ***.

“Initial Research Plan” shall have the meaning set forth in Section 3.2.1.

“Initial Research Program Term” shall mean the period starting as of the Effective Date and ending on the *** anniversary of the Effective Date, which period shall apply *** to the Research Indication of *** Disease as being researched by the Parties pursuant to the Initial Research Plan.

“Invoice” shall mean an accurate, complete and audit-worthy invoice. The term “audit-worthy” means that such invoice shall specify the Party issuing the invoice and identify this Agreement as the basis for the invoice, and shall include a description of the work or the item that the invoice covers, as well as any other reasonable items requested by GSK from time to time.

“Joint Know-How” shall mean any and all Know-How that is discovered, developed or invented (a) jointly by or on behalf of GSK and FivePrime, and (b) as a result of the Parties performing their obligations under the Research Plan.

“Joint Patent Committee” or “JPC” shall have the meaning in Section 2.4.1.

“Joint Patent Rights” shall mean any and all Patents that claim an invention that arose during the course of the Parties performing their obligations under the Research Program, where such invention was invented by individuals obligated to assign their rights to FivePrime and/or its Affiliates and GSK and/or its Affiliates.

“Joint Steering Committee” or “JSC” shall have the meaning set forth in Section 2.2.

“JSC Oversight Period” shall have the meaning set forth in Section 2.2.5.

“Know-How” shall mean any and all tangible and intangible information, data, results (including pharmacological, research and development data, reports and batch records) materials, including but not limited to discoveries, improvements, compositions of matter, cell lines, assays, sequences, processes, methods, knowledge, protocols, formulas, utility, formulations, data, inventions (whether patentable or not), strategy, know-how and trade secrets, patentable or otherwise, and all other scientific, pre-clinical, clinical, regulatory, manufacturing, marketing, financial and commercial information or data, in each case that has been treated by either Party as confidential or proprietary information and that is not generally known by the public, but excluding any of the foregoing to the extent described or claimed in any Patents.

“Know-How Royalty” shall have the meaning set forth in Section 6.4.2(b).

“LIBOR Rate” shall have the meaning set forth in Section 6.6.

“Licensed Product” shall mean any product comprising a Biologic and/or Compound that is directed to or against, or incorporates or is derived directly from, a Committed Lead Target for which GSK has exercised its Selection Option as provided in Section 3.4.4, (a) which is Covered by one or more Valid Claims included within the FivePrime Background Patent Rights, FivePrime Collaboration Patent Rights or Joint Patent Rights; or (b) which was directly based upon, or directly incorporated or incorporates FivePrime Background Know-How, FivePrime Collaboration Know-How or Joint Know-How. Licensed Product shall also include any Combination Product. For the aggregation of Net Sales for the purpose of determining the applicable royalty rate under Section 6.4, all Combination Products and single agent Licensed Products comprising the same Biologic or Compound (as the case may be) shall be considered the same Licensed Product, regardless of the formulation, dosage strength, route of administration, packaging or product indication thereof or any other active ingredient(s) contained therein.

“Major Markets” shall mean ***.

“Marketing Authorizations” shall mean all approvals necessary from the relevant Regulatory Authority to permit a Party or its sublicense(s) to market and sell a Licensed Product in a particular country, including without limitation an NDA and BLA.

“Materials” shall have the meaning set forth in Section 3.5.7(a).

“Materials IP” shall mean, collectively, (i) Patents Controlled by a Materials Transferring Party that Cover the Materials, and (ii) Know-How Controlled by a Materials Transferring Party that pertains specifically to Materials. For clarity, Materials IP specifically excludes: (a) in the event that FivePrime is the Materials Transferring Party, the FivePrime Platform Technology, FivePrime Background Know-How, FivePrime Background Patent Rights, FivePrime Collaboration Know-How, FivePrime Collaboration Patent Right and FivePrime’s interest in any Joint Know-How or Joint Patent Rights; and (b) in the event that GSK is the Materials Transferring Party, the GSK Background Know-How, GSK Background Patent Rights, GSK Evaluation Know-How, GSK Evaluation Patent Rights, GSK Licensed Product Know-How, GSK Licensed Product Patent Rights and GSK’s interest in any Joint Know-How and Joint Patent Rights.

“Materials Receiving Party” shall have the meaning set forth in Section 3.5.7(a).

“Materials Transferring Party” shall have the meaning set forth in Section 3.5.7(a).

“Merger” shall have the meaning set forth in Section 4.5.

“Merging Party” shall have the meaning set forth in Section 4.5.

“MTR” shall have the meaning set forth in Section 3.5.7(a).

“Muscle Disease” shall mean a ***. For clarity, ***.

“NDA” shall mean a New Drug Application or similar application or submission in any country for approval to market a Licensed Product.

“Net Sales” shall mean the actual gross amount invoiced by GSK, or its Affiliate or sublicensee, for sales or other commercial disposition of a Licensed Product, in a bona fide, arms-length transaction to a Third Party purchaser (including distributors), less the following deductions to the extent directly applicable to such sales and are separately billed as part of such gross amount invoiced:

normal and customary rebates, quantity, trade and cash discounts to customers actually allowed and properly taken;

governmental and other rebates, chargebacks or administrative fees (or equivalents thereof) granted to managed health care organizations, pharmacy benefit managers (or equivalents thereof) or to federal, state, provincial, local and other governments, their respective agencies, purchasers and reimbursers or to trade customers actually allowed and properly taken;

retroactive price reductions, credits or allowances actually granted upon rejections, destruction or returns of such Licensed Product, including for recalls or damaged goods;

freight, postage, shipping and insurance charges actually allowed or paid for delivery of such Licensed Product, to the extent included in the gross sales price; wholesalers’ distribution fees actually paid, and fees actually paid for services or commissions to Third Party distributors, brokers or agents, other than sales personnel, sales representatives and sales agents employed by or on behalf of GSK, its Affiliates or

sublicensees (or any Person in which a sublicensee has, or which Person has in such sublicensee, at least the level of ownership or control required to meet the definition of “Affiliate” in Section 1.1);

sales taxes, excise taxes, use taxes, import/export duties or other governmental charges actually due or incurred with respect to such sales, including without limitation value-added taxes, to the extent applicable; and

amounts actually written off by reason of uncollectible to the extent consistent with GSK’s, its Affiliate’ or sublicensee’s business practices for its other products (such amounts shall be added back to the Net Sales when actually collected) not to exceed ***% *** of GSK’s gross sales for such Licensed Product.

If the Combination Product, the Licensed Product and all of the other therapeutically active ingredient(s) are sold separately, Net Sales of the Licensed Product portion of Combination Products shall be calculated by multiplying the total Net Sales of the Combination Product by the fraction A/(A+B), where A is the average gross selling price in the applicable country in the Territory of the Licensed Product sold separately in the same formulation and dosage, and B is the sum of the average gross selling prices in the applicable country in the Territory of all other therapeutically active ingredients in the Combination Product sold separately in the same formulation and dosage, during the applicable calendar year.

If the Combination Product and the Licensed Product are sold separately, but the average gross selling price of the other therapeutically active ingredient(s) cannot be determined, Net Sales of the Combination Product shall be equal to the Net Sales of the Combination Product multiplied by the fraction A/C wherein A is the average gross selling price of the Licensed Product and C is the average gross selling price of the Combination Product.

If the Licensed Product and the other therapeutically active ingredient(s) that make up the Combination Product are not sold separately, or if they are sold separately but the average gross selling price of neither the Licensed Product nor the other therapeutically active ingredient(s) can be determined, Net Sales of the Combination Product shall be equal to Net Sales of the Combination Product multiplied by a mutually agreed percentage.

“Non-Selected Target” shall have the meaning set forth in Section 4.4.5(d)(i).

“Non-Selected Target Criteria” shall have the meaning set forth in Section 4.4.5(d)(i).

“Offered Hits” shall have the meaning set forth in Section 3.4.1(b). An Offered Hit shall cease to be an Offered Hit when it becomes a Reverted Target or a Claimed Target, in each case pursuant to Section 3.4.2(b)(i).

“Offered Hit Data” shall have the meaning set forth in Section 3.4.1(c).

“Other Indication” means a human disease or condition in the Field other than Muscle Disease or ***.

“Other Indication Expansion Period” shall have the meaning set forth in Section 3.3.2(c).

“Other Indication Research Plan” shall have the meaning set forth in Section 3.3.2(c).

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

“Patents” shall mean (a) all issued patents and pending patent applications, including the parents thereof and issued patents maturing therefrom, in the Territory including, without limitation, certificates of invention, applications for certificates of invention, provisional patent applications, non-provisional patent applications, utility models, or applications for utility models, (b) any substitutions, divisionals, continuations, continuations-in-part, reissues, reexaminations, renewals, confirmations, extensions and supplementary protection certificates, and (c) any foreign counterparts of any of the foregoing.

“Person” shall mean any individual, partnership, joint venture, limited liability company, corporation, firm, trust, association, unincorporated organization, governmental authority or agency, or other entity not specifically listed herein.

“Phase 1 Clinical Trial” shall mean a human clinical trial in any country, the principal purpose of which is a preliminary determination of safety in healthy individuals or patients, that would satisfy the requirements of 21 C.F.R. § 312.21(a), or its foreign equivalent.

“Phase 2 Clinical Trial” shall mean a human clinical trial in any country that would satisfy the requirements of 21 C.F.R. § 312.21(b), or its foreign equivalent, and is intended to explore a variety of doses, dose response, and duration of effect, and to generate initial evidence of clinical safety and activity in a target patient population. For clarity, a trial called a Phase 1/2 or Phase 1b/2 trial shall be considered a Phase 2 trial if it satisfies the requirements of 21 C.F.R. § 312.21(b) or its foreign equivalent.

“Phase 3 Clinical Trial” shall mean a human clinical trial in any country that would satisfy the requirements of 21 C.F.R. § 312.21(c), or its foreign equivalent, and is intended to (a) establish that the product is safe and efficacious for its intended use, (b) define warnings, precautions and adverse reactions that are associated with the product in the dosage range to be prescribed, and (c) support Regulatory Authority approval for such product. For clarity, a trial called a Phase 2/3 trial shall be considered a Phase 3 trial if it satisfies the requirements of 21 C.F.R. § 312.21(c) or its foreign equivalent.

“Product Infringement” shall have the meaning set forth in Section 8.3.1.

“Project Leader” shall have the meaning set forth in Section 2.1.

“Project Team” shall have the meaning set forth in Section 2.1.

“Receiving Party” shall have the meaning set forth in Section 7.1.

“Regulatory Authority” shall mean any applicable government regulatory authority involved in granting approvals for the marketing and sale of a Licensed Product in the Territory, including the FDA and the EMEA.

“Research Indication” shall mean each of: (a) Muscle Diseases; (b) ***, in the event GSK expands the Research Program into ***; and (c) any Other Indication agreed upon by the Parties pursuant to Section 3.3.2(c).

“Research Plan” shall mean, individually and collectively, the Initial Research Plan and, if any, the Expanded Research Plan(s), as amended from time to time by the JSC.

“Research Program” shall mean, for each Research Indication, the research activities undertaken by the Parties as set forth in the Research Plan for such Research Indication.

“Research Program Term” shall mean for a particular Research Indication, (a) the Initial Research Program Term with respect to Muscle Diseases, and (b) in the event GSK expands the Research Program for any Research Indication, in each case pursuant to Section 3.3.2, the Expanded Research Program Term for such Research Indication.

“Reserved *** Target” shall have the meaning set forth in Section 4.4.5(b).

“Reserved Clinical Biologics” shall have the meaning set forth in Section 4.4.3(e).

“Reserved Target” shall mean a Target for which FivePrime has, in accordance with Section 3.4.1(d)(i), reserved the right to research, develop and commercialize including the following with respect to such Target: (a) a sequence variant thereof, (b) any Biologic that is or is a fragment of such Target or a fragment or sequence variant thereof, (c) any Biologic or Compound that modulates the activity of such Target or a fragment or sequence variant thereof; or (d) any nucleic acid encoding a molecule described in (a) – (c) or a fragment or variant of such nucleic acid. For the avoidance of doubt, FivePrime shall include all Reserved Targets existing as of any given time on the then current Reserved Target List.

“Reserved Target List” shall mean the list of Reserved Targets provided by FivePrime, which list shall not at any time during the Research Program Term include more than a total of *** such Reserved Targets, and which Reserved Targets shall be identified on the list only by their FivePrime internal tracking number (e.g., CLS12345678). The Reserved Target List may be updated from time to time during the Research Program Term as provided in this Agreement.

“Reverted Target” shall mean (a) a Hit that is no longer subject to further evaluation to determine whether such Hit should become an Offered Hit as determined by the Working Group as set forth in Section 3.4.1(b) or becomes a Reverted Target pursuant to Section 4.4.5(d)(ii); (b) an Offered Hit that is not selected as a Claimed Target pursuant to Section 3.4.2(b)(i); or (c) a Claimed Target that does not become a Committed Lead Target pursuant to Section 3.4.4(c).

“Royalty Term” shall have the meaning set forth in Section 6.4.2.

“Screening Assay” shall mean an assay that is designed and carried out by the Parties pursuant to the Research Plan for screening the FivePrime Library (or a portion thereof as determined by the Working Group) for Targets or fragments thereof that are relevant in a Research Indication.

“Selection Fee” shall have the meaning set forth in Section 6.3.2.

“Selection Option” shall have the meaning set forth in Section 3.4.4(a).

“South America” shall mean, ***.

“Target” shall mean: (a) (i) a human protein together with all other proteins translated from mRNA splice variants transcribed from the same human chromosomal genomic locus encoding such protein where each such other protein has been demonstrated or is reasonably likely to have potential therapeutic activity in the respective disease (e.g., Muscle Disease, ***, or another Research Indication), or (ii) a ***; and (b) a protein that is at least *** percent (***%) identical at the amino acid level and demonstrates similar in vitro and in vivo activity for the respective disease as that set forth in (a) above (in the case of a *** each *** of such *** shall meet such ***), in each case based on published data, data from experiments carried out under the respective Research Plan, or other data available to the Parties.

“Target Patents” shall mean Collaboration Patents that are directed to any Hit, Offered Hit, Claimed Target, Committed Lead Target and/or Licensed Product (or, if applicable, Terminated Product).

“Term” shall have the meaning set forth in Section 10.1.

“Terminated Product” shall have the meaning set forth in Section 10.5.1(e).

“Terminated Target” shall mean a Committed Lead Target for which (a) GSK terminated its rights pursuant to Section 10.2, or (b) GSK’s rights were terminated pursuant to Section 10.3.

“Territory” shall mean worldwide.

“Third Party” shall mean any Person other than GSK, FivePrime and their respective Affiliates.

“Third Party Assay” shall mean an assay or other research performed by FivePrime on behalf of a Third Party and/or whereby such Third Party has or may obtain rights to Targets or other intellectual property arising therefrom.

“Third Party Target” shall mean a Target for which FivePrime has reserved the right for a Third Party to research, develop or commercialize including the following with respect to such Target: (a) a sequence variant thereof, (b) any Biologic that is or is a fragment of such Target or a fragment or sequence variant thereof, (c) any Biologic or Compound that modulates the activity of such Target or a fragment or sequence variant thereof, or (d) any nucleic acid encoding a molecule described in (a) – (c) or a fragment or variant of such nucleic acid. For the avoidance of doubt, all Third Party Targets existing at any given time will be included on the then-current Third Party Target List.

“Third Party Target List” shall mean the list of Third Party Targets maintained by FivePrime and identified only by their FivePrime internal tracking number (e.g., CLS12345678), which list may be updated from time to time during the Research Program Term as provided in this Agreement.

“US” shall mean the United States of America and all of its territories and possessions.

“Valid Claim” shall mean a claim of a Patent which: (a) has not been revoked or held unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, which decision is not appealable or has not been appealed within the time allowed for appeal; (b) has not been disclaimed, denied or admitted to be invalid or unenforceable through reissue, re-examination or disclaimer or otherwise; and (c) if the claim is in a pending patent application, the patent application has not been pending for more than *** years from the date of the first substantive office action on the merits of such claim by the patent office having jurisdiction over such patent application. For the purposes of this definition of Valid Claim, the term “substantive office action” shall mean a correspondence from the patent office to the applicant specifying the examination of the claims in a patent application specifying the allowance thereof or statutory grounds for any objection to or rejection thereof.

“Working Group” shall have the meaning set forth in Section 2.1.

Working Group and Project Leaders. Each Party shall establish, for each Research Indication, a team (the “Project Team”) that shall work together with the other Party’s Project Team to form a single group (each, a “Working Group”) that is responsible for carrying out the activities under the Research Plan for such Research Indication. Each Party may assemble its Project Team(s) in its own discretion, based on its reasonable assessment of the staffing needs for the activities to be carried out by the respective Party. The size and composition of a Party’s Project Team(s) may be changed by a Party at any time for any reason, in its sole discretion. GSK and FivePrime each shall appoint a member of its respective Project Team(s) (each, a “Project Leader”), who shall be responsible for coordinating the Research Program for his/her own Project Team and the Working Group focusing on a particular Research Indication. The Project Leader(s) shall be the primary contact between the Parties with respect to the Research Program. Each Party shall notify the other within *** days of the Effective Date of the appointment of a Project Leader and shall notify the other Party in writing prior to changing this appointment. Each Working Group for a particular Research Indication shall make decisions on day-to-day operational matters, make decisions on which Hits shall be subject to further assays to confirm selection of such Hits as Offered Hits, as provided in Section 3.4.1(b), and conduct the activities under the Research Plan, in each case for such Research Indication. Each Working Group for a particular Research Indication shall also serve as a forum through which the Parties will share day-to-day operational information regarding the Research Program for such Research Indication, all in accordance with the terms of this Agreement.

Joint Steering Committee. The Parties agree to establish a joint committee to facilitate the Research Program during the Research Program Term (the “Joint Steering Committee” or “JSC”) as follows:

Composition of the JSC. The Research Program activities shall be overseen by a JSC consisting of *** FivePrime representatives and *** GSK representatives, none of whom shall also be Project Leaders. Each Party shall designate its JSC representatives within *** days after the Effective Date. Each Party may change its JSC representatives from time to

time in its sole discretion, effective upon written notice to the other Party of such change. A Party’s representatives to the JSC shall have appropriate technical credentials, experience and knowledge, and ongoing familiarity with the Research Program, and shall have responsibilities within such Party for the Research Program. Additional non-voting observers may, from time to time, be invited to attend JSC meetings by the Parties, provided that any such observers who are not employees of either Party or its Affiliates may only attend with the prior written consent of the other Party, further provided that all such observers shall be bound by confidentiality and non-use obligations similar as those contained in Article 7 (with a shorter duration for such obligations if appropriate which in no event shall be shorter than *** years after the receipt of the applicable confidential information by such observer).

Decision-Making. It is anticipated that most day-to-day decisions will be made at the level of the Working Group, except for those that are within the purview of the JSC as specified in Section 2.2.4. If the Working Group disagrees on any of the decisions within the purview of the Working Group pursuant to Section 2.1, the Project Leaders will first try to reach agreement on such matter. If the Project Leaders are unsuccessful in reaching agreement within *** days after first attempting to resolve such matter, either Party shall have the right, upon prior written notice to the other Party, to elevate the matter to the JSC for discussion and resolution at the next regularly scheduled meeting of the JSC or at some earlier time as agreed to by the Parties. At the JSC, each Party shall have collectively one (1) vote in all decisions within the JSC’s purview, as specified in Section 2.2.4, and all decisions of the JSC shall be made by unanimous vote, except as set forth below:

Except as set forth in Section 2.2.2(b), in the event that the JSC cannot reach a unanimous vote with respect to a decision within its purview as provided in Section 2.2.4, such dispute shall be referred to *** and *** at GSK or other senior management representative (or their respective designees who are members of senior management with the power and authority to resolve such matter). If such senior executive and senior management representative cannot agree on a matter within *** Business Days after their first discussion regarding such matter, then except as provided in Section 3.4.2(b)(ii), FivePrime shall, in good faith and taking into consideration the comments of GSK, have the final decision-making authority, provided that such final decision of FivePrime shall not result in any additional cost to GSK under the Research Program. For clarity, FivePrime shall not exercise its final decision making authority in a manner that would result in a material reduction of efforts by either Party as originally contemplated in the Research Plan.

After GSK has exercised its Selection Option for a given Claimed Target such that such Claimed Target becomes a Committed Lead Target as provided in Section 3.4.4(a), notwithstanding that the JSC Oversight Period may still be in effect, the JSC will have no oversight over such Committed Lead Target. GSK will have sole and final decision-making authority with respect to all decisions regarding such Committed Lead Target and the corresponding Licensed Product in accordance with the terms and conditions of this Agreement, and GSK will, in its sole discretion, control the research, development, progression, regulatory activities, manufacturing, marketing, sales and other commercialization of any such Licensed Product in the Field in the Territory, unless such Committed Lead Target becomes a Terminated Target pursuant to Section 10.5.1(e).

Meetings and Minutes. The JSC shall meet at least *** every *** during the JSC Oversight Period in accordance with a schedule established by mutual written agreement of the Parties, but no less frequently than *** each *** during the JSC Oversight Period in person unless the Parties otherwise agree, with the location for such location for such in-person meetings alternating between FivePrime’s and GSK’s facilities in the United States, or such other location as may be determined by the JSC. Alternatively, the JSC may meet by means of teleconference, Internet conference, videoconference or other similar communications equipment. Each Party shall bear its own travel and lodging expenses related to participation in and attendance at such meetings by its JSC representatives. FivePrime shall prepare written minutes of the meetings of the JSC and provide such minutes to GSK for review no later than *** days after the date of the meeting to which the minutes pertain, which minutes shall become official if GSK does not provide any comments to such minutes within *** Business Days (or such additional period of time as mutually agreed by the Parties) after FivePrime provides such minutes to GSK for review. In the event that GSK provides comments to the minutes within such *** Business Day period (or such additional period of time as mutually agreed by the Parties) , the JSC will discuss such comments in good faith to resolve any discrepancies within *** days after receipt of such comments from GSK, subject to the same decision making mechanism as set forth in Section 2.2.2.

Scope of Joint Steering Committee Oversight. Except as otherwise provided herein, the JSC shall perform the following functions: (a) prioritizing experiments for the Working Group; (b) resolving disputes between Project Teams comprising the Working Group or between the Parties as provided in Section 3.3.2(c)(ii); (c) conferring regarding the status of the Research Program; (d) reviewing data generated in the course of the Research Program; (e) considering and advising on any technical issues that arise in the course of the Research Program; (f) approving amendments to the *** and any of the ***; (g) reviewing written updates submitted to the JSC pursuant to Section 3.5.1(c) herein; (h) monitoring the Parties’ progress under the *** in accordance with the then-current ***; and (i) performing such other obligations as set forth in this Agreement or as otherwise necessary for the conduct of the Research Program. To the extent that the Parties mutually agree that an un-performed Screening Assay(s) would not be scientifically feasible to perform, then the JSC may also, during the Research Program Term, modify the Research Plan to substitute any un-performed Screening Assay(s) with new Screening Assay(s) solely to identify Targets involved in the same Research Indication and that are of similar scope and require similar research efforts, provided that such substitutions shall not cause either GSK or FivePrime to incur additional costs, unless the Parties otherwise agree in writing. When evaluating whether a substitute screen is of similar scope and would require similar research efforts as the un-performed Screening Assay(s) to be replaced, the JSC shall consider the specific research efforts necessary to perform both such Screening Assay(s) and the substitute screen(s) to ensure that substitute screen(s) require equivalent research efforts. Such substitute screen or substitute screens may require research efforts equivalent to a single un-performed Screening Assay or multiple Screening Assays, as applicable. When measuring the equivalent research efforts to be transferred to substitute screens, the JSC may also consider *** to ensure that any ***. If the JSC modifies the Research Plan to substitute different screens as set forth herein, then each Party shall transfer such efforts as would have been expended on the un-performed Screening Assays under the Research Plan to the substitute screen. For clarity, the JSC shall not have any authority beyond the specific matters set forth in this Section 2.2.4, including but not limited to, not having the authority to: (i) obligate GSK to exercise the Claiming Option or Selection Option with respect to any Target; (ii) amend the Agreement, waive any breach of either Party under the Agreement, or terminate the Agreement; (iii) make decisions or take any actions that are inconsistent with the terms of this Agreement; or (iv) approve any Research Plan or amendment thereto that is inconsistent with the terms of this Agreement.

Period of Oversight by JSC. The JSC shall be in place until the later of: (a) the expiration of the Research Program Term; or (b) the expiration of, or GSK’s exercise of, GSK’s Selection Option with respect to the last Claimed Target (the “JSC Oversight Period”).

Alliance Managers. Promptly after the Effective Date, each Party shall appoint an individual to act as alliance manager for such Party (each, an “Alliance Manager”). Each Alliance Manager shall thereafter be permitted to attend meetings of the JSC as a non-voting observer, subject to the confidentiality provisions of Article 7. The Alliance Managers shall be in place for the duration of the Term and, except with respect to the Research Plan for which the Working Group is responsible, shall be the primary point of contact for the Parties regarding the collaboration activities contemplated by this Agreement. The Alliance Managers shall also be responsible for assisting the JSC in performing its oversight responsibilities, including monitoring whether activities are being conducted in accordance with the Research Plan and preparing and finalizing the minutes from meetings of the JSC. The name and contact information for such Alliance Managers, as well as any replacement(s) chosen by FivePrime or GSK, in their sole discretion, from time to time, shall be promptly provided to the other Party.

Formation. Promptly, and in any event within *** calendar days after the Effective Date, the Parties shall establish a joint patent committee (the “Joint Patent Committee” or “JPC”) as more fully described in this Section 2.4. The JPC shall remain in place during the Term and shall consist of *** of representatives from each of FivePrime and GSK ***.

Role. The JPC shall be responsible for developing patent strategy for Collaboration Patents, including making key decisions on filing, prosecution, maintenance, enforcement and defense, as well as providing a forum for the Parties to discuss material issues and provide input to each other regarding Collaboration Patents. As part of these duties, the JPC shall determine which Patents are to be considered Collaboration Patents and will oversee the determination of inventorship on each Collaboration Patent. Periodically during the Research Program Term, or upon request, the JPC shall report its activities and the status of such to the JSC. For the avoidance of doubt, any and all roles, responsibilities and decision-making of the JPC shall be limited to that which is consistent with and permissible by either FivePrime or GSK, as applicable, under the terms and conditions of any applicable Third Party licenses.

Decisions. During the time period that the JPC is in place, all decisions of the JPC shall be made by consensus with each Party collectively having one (1) vote in all decisions of the committee. In the event that the JPC is unable to reach a decision within *** Business Days after it has met and attempted to reach such decision, then either Party may, by written notice to the other, have such issue submitted to the chief patent counsels of GSK and FivePrime (“Chief Patent Counsels”), or such other person holding a similar position designated by GSK or FivePrime from time to time, for resolution. The Chief Patent Counsels shall meet promptly to discuss the matter submitted and to determine a resolution. If the Chief Patent Counsels are unable to determine a resolution in a timely manner, which shall in no case be more than *** Business Days after the matter was referred to them, then the matter will be resolved as follows: If the matter involves (i) an inventorship determination for a Collaboration Patent, or (ii) whether a Joint Patent is a Collaboration Patent, then a final decision with respect to such matter will be made by an independent patent attorney mutually acceptable to the Parties with at least *** years of experience in biotechnology-related patent prosecution (or who has such other similar credentials as mutually agreed by the Parties) within *** days of referral of the matter to the independent patent attorney, which referral will be made promptly. If the matter involves whether a Patent (other than a Joint Patent) is a Collaboration Patent, the final decision will be made by the Chief Patent Counsel of FivePrime for Patents solely Controlled by FivePrime and will be made by the Chief Patent Counsel of GSK for Patents solely controlled by GSK. Once a determination is made as provided in this Section 2.4.3 regarding whether a Joint Patent or Patent is a Collaboration Patent, final decision making authority with respect to the filing, prosecution and/or maintenance of any such Collaboration Patent(s) shall be as set forth in Sections 8.2.1(c) and 8.2.1(d). For clarity, except as set forth above, patent strategy decisions regarding Patents directed to a Third Party’s Target, FivePrime Reserved Target, Terminated Target, Reverted Target, or Licensed Product shall be outside of the scope of the JPC.

Meeting. The JPC shall meet at least *** times per ***, either in person, by teleconference or by video conference, on such dates and at such places and times agreed to by the Parties. Each Party shall bear its own travel and lodging expenses related to participation in and attendance at such meetings by its JPC representatives.

Overview. FivePrime and GSK shall engage in the Research Program in accordance with the terms and conditions set forth in this Agreement and in accordance with the Research Plan.

Goal of the Research Program. The goal of the Research Program is to discover and advance Biologics and/or Compounds directed to or against, or incorporating or deriving from, Targets arising from screens of the FivePrime Library in Screening Assays as set forth in the applicable Research Plan. The Parties intend to achieve such goal through FivePrime’s screening of the FivePrime Library (or a portion thereof as determined by the Working Group) to identify such Targets as set forth in the Research Plan, and through GSK’s evaluation of certain such Targets.

Additional Responsibilities of GSK. Upon GSK’s selection and designation of a Claimed Target as a Committed Lead Target under this Agreement, GSK will be solely responsible, and will have sole and final decision-making authority with respect to the conduct of the research, development, progression, regulatory activities, manufacturing, marketing, sales and other commercialization activities of Licensed Products with respect to such Committed Lead Target in the Field in the Territory in accordance with the terms and conditions of this Agreement, without submitting any such matter for review or decision to the JSC.

Research Plans; Activities under the Research Program.

Research Plans. The Parties have agreed upon an initial research plan, which is attached to this Agreement as Exhibit 2, that governs the Parties’ activities under the Research Program during the Initial Research Program Term in Muscle Diseases (the “Initial Research Plan”). Under the Initial Research Plan, the Parties will focus on three main areas to identify Targets for Muscle Disease: (i) ***; (ii) ***; and (iii) ***, all as described in the Initial Research Plan set forth on Exhibit 2.

Activities under the Research Program. Subject to Section 2.2.4, each Party shall conduct activities allocated to it under the Research Plan for each Research Indication. Neither Party shall be obligated to conduct activities that are not described in the Research Plan if such activities would cause either Party to incur additional costs, unless otherwise mutually agreed by the Parties.

Research Program Term and Options.

Initial Research Program Term. The Initial Research Program Term shall commence on the Effective Date and continue for three (3) years thereafter.

Expanded Research Program Term.

Muscle Diseases Research Program Term Expansion Option.

GSK may, from time to time during the Initial Research Program Term, elect to exercise the option to expand the Research Program for Muscle Diseases once or multiple times beyond the scope or duration set forth in the Initial Research Plan or the most recent Expanded Research Plan, as applicable, by providing FivePrime with written notification of its election for such expansion prior to the date that is *** calendar days prior to the expiration of the Initial Research Program Term. The Parties shall negotiate in good faith and on an exclusive basis during the *** calendar day period commencing on the date of FivePrime’s receipt of such written notification from GSK regarding the terms for an expansion of the Initial Research Plan or the most recent Expanded Research Plan, as applicable (the “Expanded Muscle Diseases Research Plan”), which shall set forth the terms and conditions for an Expanded Research Program for Muscle Diseases and shall include, at a minimum, the scope of the Expanded Research Program for Muscle Diseases (including the types of Screening Assays to be conducted), the Expanded Research Program Term for such Expanded Research Program, and the research funding to be paid by GSK to FivePrime under Section 6.2.2(b) for such Expanded Research Program. Each such Expanded Muscle Diseases Research Plan, once agreed upon by the Parties, shall become part of this Agreement and the research program described therein shall become the Expanded Research Program for Muscle Diseases.

Expansion of Muscle Diseases Research Plan to include ***. The Parties anticipate that as provided in Section 3.3.2(a)(i), GSK may elect to exercise its option to expand the Research Program in the Muscle Indication to include ***. In the event that GSK elects to so exercise its expansion option to include *** as provided in Section 3.3.2(a)(i) by providing FivePrime with written notification of its election for such expansion prior to the date that is *** calendar days prior to the expiration of the Initial Research Program Term, the Parties will promptly negotiate in good faith to agree upon an Expanded Muscle Diseases Research Plan for such *** to be governed by Section 3.3.2(f) below.

*** Expansion Option. GSK may, from time to time during the *** Expansion Period as provided below, elect to exercise the option to expand the Research Program for *** once or multiple times, in GSK’s discretion, by providing FivePrime with written notification of each such election for such expansion prior to the *** anniversary of the Effective Date (the “*** Expansion Period”). The Parties shall negotiate in good faith and on an exclusive basis during the *** day period commencing on the date of FivePrime’s receipt of such notification from GSK regarding the terms for a research plan for such *** Indication (the “*** Research Plan”) which shall set forth the terms and conditions for a Research Program for such *** and shall include, at a minimum, the scope of the Research Program for such *** (including the types of Screening Assays to be conducted), the Expanded Research Program Term for such Research Program, and the research funding to be paid by GSK to FivePrime under Section 6.2.2(b) for such Research Program. Each such *** Research Plan, once agreed upon by the Parties, shall become part of this Agreement and the research program described therein shall become the Research Program for ***, in each case after FivePrime’s actual receipt of the payment of the Expansion Fee in accordance with Section 6.2.2(a) for ***.

***. GSK may elect to exercise the option to expand the Research Program to include an Other Indication of interest to GSK by providing FivePrime with written notification of its election to exercise its option for such expansion prior to the end of the Research Program Term (the “Other Indication Expansion Period”). The Parties shall negotiate in good faith and on a non-exclusive basis during the *** day period commencing on the date of FivePrime’s receipt of such notification from GSK for a research plan for the Other Indication (the “Other Indication Research Plan”) which shall set forth the terms and conditions for an Expanded Research Program for such Other Indication, provided that FivePrime shall not have the obligation to negotiate with GSK on such Expanded Research Program for any such Other Indication, if: (i) the *** certifies in writing that FivePrime is conducting research or development in the area on behalf of a Third Party, or that FivePrime is engaged in bona fide negotiations with a Third Party for a research program for such Indication; (ii) FivePrime does not think that the Expanded Research Program for such Indication proposed by GSK is *** and shares such rationale with GSK, provided that in the event GSK does not agree with the rationale provided by

FivePrime, such decision shall be reviewed and finally decided by the JSC; or (iii) FivePrime is pursuing an internal discovery program in the area for which it intends to retain rights at that time. Any Other Indication Research Plan agreed upon by the Parties shall include, at a minimum, the scope of the Expanded Research Program for such other Indication (including the types of Screening Assays to be conducted), the Expanded Research Program Term for such Expanded Research Program, and the research funding to be paid by GSK to FivePrime under Section 6.2.2(b) for such Expanded Research Program. Such Other Indication Research Plan, once agreed upon by the Parties, shall become part of this Agreement and the research program described therein shall become the Expanded Research Program for such other Indication, in each case after FivePrime’s actual receipt of the payment of the Expansion Fee in accordance with Section 6.2.2(a) for such other Indication.

Each Expanded Muscle Diseases Research Plan, *** Research Plan and Other Indication Research Plan shall be deemed an “Expanded Research Plan.” For clarity, if the Parties cannot agree on the terms and conditions pertaining to a particular Expanded Research Plan (for example, the research funding amounts), the matter shall be referred to the *** or other senior management representative (or their respective designees who are members of senior management with the power and authority to resolve such matters) for resolution and shall not be subject to the dispute resolution mechanism set forth in Section 12.6. If such executives and senior management representatives of the Parties cannot reach agreement on such matter within *** days despite good faith negotiation, then such Expanded Research Program shall not become part of this Agreement. The Parties acknowledge that work under an Expanded Research Plan may not begin immediately upon execution of an agreement or amendment containing the Expanded Research Plan, as there may be time needed for increasing or reallocating staff to begin the additional work, and such timing shall be described in the applicable Expanded Research Plan.

For clarity, GSK’s expansion of the Research Program for *** or more Research Indications shall not expand the Research Program or Research Program Term for any other Research Indication(s) for which GSK has not made such election.

In the event that GSK elects to exercise its option to expand the Research Program to include one or more Expanded Muscle Diseases Research Plans, one or more *** Research Plans, or one or more Other Indication Research Plans, then the Parties agree to discuss in good faith the terms of each such Expanded Research Plan, as follows:

The Parties agree to negotiate in good faith the costs of any Expanded Research Plan, provided that the Parties agree in principle that, for the Expanded Research Plan pertaining to the ***, GSK shall pay FivePrime *** percent (***%) ***. GSK shall have the right to audit such costs in accordance with Section 6.7, applied mutatis mutandis, except that the documentation to be reviewed to audit such costs shall also include such documentation and other information as is reasonably necessary to determine the accuracy of any invoices submitted with respect to the above-referenced costs.

The Parties anticipate that both FivePrime and GSK will participate in conducting the research under the Expanded Research Plan, such specific activities to be allocated to each Party via the JSC.

The Parties will discuss in good faith and will agree upon the most cost effective approach to completing the proposed research under the Expanded Research Plan, particularly with respect to the purchase and care of any animals to be used in the conduct of such research pursuant to the Expanded Research Plan.

Activities under the Research Program.

Hits; Sharing of Data; Offered Hits.

Hits; Sharing of Data. FivePrime shall conduct screening of the FivePrime Library (or a portion thereof, as determined by unanimous agreement of the Working Group) using the Screening Assays in accordance with the Research Plan to identify Hits. FivePrime shall share the molecular identity of the Hits from each Screening Assay with GSK. For clarity, a Target resulting from a Screening Assay shall not be deemed a Hit if it is a Reserved Target (subject to Section 3.4.1(d)(i)(6)) or a Third Party Target.

Offered Hits. FivePrime shall offer to GSK any and all Hits from a Screening Assay that have been further confirmed, to the extent confirmation is feasible and reasonable, to exhibit in vivo activity or

Hits that, by virtue of activity in medically relevant, secondary in vitro assays, are thought to have reasonable and realistic potential as therapeutics or targets of therapeutics for a Research Indication (each such Hit, an “Offered Hit”). The appropriate Working Group will determine which Hits will be subject to further assays and will determine which secondary in vitro assays and/or in vivo assays, using the FivePrime Platform Technology (including the *** technology), will be used, to the extent such assays are feasible and available as determined by the appropriate Working Group. In the event the Working Group determines (either at the time of its designation as a Hit or subsequently during the Research Program Term) that a Hit shall not be subject to further evaluation under the Research Program, except as set forth in Section 4.4.5(d)(i), such Hit shall become a Reverted Target, unless, within *** Business Days after such determination by the Working Group, GSK notwithstanding the Working Group’s decision decides, in its sole discretion, to designate such Hit as an Offered Hit, regardless of the amount of evaluation (if any) that has been performed on such Hit after its designation as a Hit and so notifies FivePrime in writing. At the end of the Research Program Term for a particular Research Indication: (i) all Hits that have not become Reverted Targets as determined by the Working Group as set forth above or Non-Selected Targets pursuant to Section 4.4.5(d)(i) shall be deemed Offered Hits; (ii) unless otherwise agreed to by the Parties, FivePrime shall have no further obligation to conduct any activities under the Research Plan for such Research Indication; (iii) GSK’s right to exercise its Claiming Option for any Target that, at the end of the Research Program Term, has been offered to GSK as an Offered Hit, or has been deemed an Offered Hit, in each case pursuant to this Section 3.4.1(b), shall continue after the expiration of such Research Program Term for the full Claiming Option Period of time; and (iv) GSK’s Selection Option for any Target that is a Claimed Target at the end of the Research Program Term (or becomes a Claimed Target after the end of the Research Program Term by reason of GSK’s exercise of its Claiming Option pursuant to subsection (iii) above), shall continue after the expiration of such Research Program Term for the full Selection Option Period of time.

FivePrime’s Disclosure of Offered Hits. FivePrime will disclose to GSK all Offered Hits as soon as practicable but in any event at the next JSC meeting immediately following the identification or selection, as applicable, of such Offered Hits, together with the following information with respect to such Offered Hits (the “Offered Hit Data”):

*** provided that FivePrime shall not be required to disclose to GSK: (A) ***; (B) ***; (C) ***; or (D) ***

*** provided, however, nothing in this Section 3.4.1(c)(ii) shall be construed as obligating FivePrime to ***. GSK shall be free to *** during this time, as well, at its own expense.

Third Party Target List. FivePrime shall maintain a current Third Party Target List and shall update GSK within *** days of making any changes to the Third Party Target List. FivePrime may add one or more Targets to the Third Party List from time to time, provided that such Target is not, at the time FivePrime seeks to add it to the Third Party List, a Hit, Offered Hit, Claimed Target or a Committed Lead Target, unless such Hit, Offered Hit, Claimed Target or Committed Lead, as applicable, has become a Reverted Target or Terminated Target. In the event the right to any Third Party Target reverts to FivePrime under such Third Party collaboration so that FivePrime is no longer required

to reserve such Target for such Third Party, then, such Target shall no longer be deemed a Third Party Target and if such Third Party Target qualifies as an Advanced Reserved Target at the time of reversion by the Third Party to FivePrime, then FivePrime shall have the right to add such Target to the Reserved Target List in accordance with the provisions of Section 3.4.1(d). If such Third Party Target does not qualify as an Advanced Reserved Target at the time of reversion of the Third Party Target by the Third Party to FivePrime (or if FivePrime elects not to include such Third Party Target on the Reserved Target List, notwithstanding the fact that such Third Party Target qualifies as an Advanced Reserved Target at the time of reversion), then in the event: (i) such reversion occurs during the Research Program Term for a particular Research Indication, and (ii) such Target would have otherwise been designated a Hit at the time it was identified in a Screening Assay for such Research Indication under the Research Program but for its inclusion on the Third Party Target List at the time, FivePrime shall inform GSK of the availability of such Target and designate such Target as a Hit for such Research Indication, provided that GSK’s right to such Target shall be subject to any and all contractual obligations FivePrime may have to such Third Party collaborator from whom the right of such Target was reverted. Nothing herein shall be construed as preventing FivePrime from having the right to designate such reverted Third Party Target as a Reserved Target if FivePrime offers GSK such Target as a Hit as set forth in the immediately preceding sentence, and such Hit becomes a Reverted Hit as set forth in this Agreement.

***.  

The provisions regarding each Party’s rights and obligations to Targets as set forth in this Agreement shall also apply to each ***, subject to the following clarifications and further subject to Section 3.4.1(e)(ii) below: (A) if any *** (e.g., ***) becomes a Hit, Offered Hit, Claimed Target or Committed Lead Target under this Agreement, then *** of such *** (in this example, ***) shall also be included within such corresponding designation (i.e., *** shall be deemed a *** Hit, Offered Hit, Claimed Target or Committed Lead Target, as the case may be), without counting any such ***

or *** thereof as *** Targets, without exercising a separate Claiming Option or Selection Option (or paying a separate Claiming Fee or Selection Fee) for *** and *** ***, and without counting *** and ***, in each case to the extent included on the Reserved Target List, as *** Targets (as applicable); (B) if any *** is a Reserved Target, *** shall also be deemed, collectively with the ***, a Reserved Target, without counting any such *** as *** Reserved Targets; (C) if any *** is a Third Party Target, then *** of such *** (in this example, ***) shall also be deemed, ***, a Third Party Target, without counting any such *** thereof as separate Third Party Targets; and (D) a *** shall be deemed a Reserved Target or Third Party Target if such ***, is a Reserved Target or Third Party Target (including by operation of subsection (B) above).

In the event that any *** (whether or not such *** is a Reserved Target and whether or not *** has been deemed to be an Advanced Research Target as provided in Section 3.4.1(d)(i)(6)(aa)) is also a *** of two (2) or more other *** (such *** is referred to as a ***), then each Party’s rights to such *** under Sections 3.4.1(e)(i)(A) and (B) above shall be non-exclusive as between the Parties. The determination of whether a *** is a *** shall be made based on existing data in the possession of either Party or in the existing literature. For the purposes of example only, if *** is a Reserved Target and the *** is a ***, then: (A) *** shall *** be deemed *** Reserved Target; (B) FivePrime shall have the right to research, develop and/or commercialize Biologics and Compounds to *** as if it were a Reserved Target; (C) in the event such *** (i.e., ***), or a *** comprising such *** (i.e., ***), qualifies as a Hit in a Screening Assay conducted under the Research Program, such *** shall not be excluded as a Hit by reason of the existence of *** on the Reserved Target List; and (D) GSK’s license under Section 4.1.1 and Section 4.1.2 with respect to such *** (i.e., ***) (either as a Target by itself or as a *** (i.e., ***)) shall be non-exclusive. Similarly, if *** is not a Reserved Target, but is a Hit, and the *** is a ***, then: (A) *** shall *** be deemed *** Offered Hit, Claimed Target or Committed Lead Target, as applicable; (B) the licenses granted to GSK under Section 4.1.1 and Section 4.1.2 with respect to such *** shall be exclusive and GSK shall have

the exclusive right to research, develop and/or commercialize Biologics and Compounds to such ***; and (C) the licenses granted to GSK under Section 4.1.1 and Section 4.1.2 shall be non-exclusive with respect to such *** (either by itself or as *** of another *** (i.e., ***).

Review of Offered Hit Data; Claimed Targets.

Review of Offered Hit Data. GSK shall review the Offered Hit Data for each Offered Hit and make its decision whether to exercise its Claiming Option with respect to such Offered Hit pursuant to Section 3.4.2(b) below.

Selection of Claimed Targets.

During the period commencing on the date on which FivePrime has delivered all Offered Hit Data with respect to an Offered Hit and continuing for *** days thereafter (the “Claiming Option Period”), GSK shall have an exclusive option (even as to FivePrime) to select such Offered Hit for evaluation and further development (each such option, a “Claiming Option”). GSK shall have the right, but not the obligation, to exercise its Claiming Option prior to the expiration of the Claiming Option Period by providing written notice to FivePrime. Upon FivePrime’s receipt of such written notice from GSK that it is exercising its Claiming Option for such Offered Hit, such Offered Hit shall be deemed to be and designated as a Claimed Target under this Agreement. GSK shall, in the event it exercises the Claiming Option with respect to such Offered Hit, pay FivePrime the Claiming Fee as set forth in Section 6.3.1. If (A) prior to the expiration of the Claiming Option Period, GSK notifies FivePrime that it is not exercising its Claiming Option with respect to a particular Offered Hit, or (B) GSK does not exercise its Claiming Option with respect to a particular Offered Hit by providing FivePrime with written notification prior to the expiration of the Claiming Option Period, then in each case of (A) and (B), such Offered Hit shall cease to be an Offered Hit and shall become a Reverted Target. If an Offered Hit becomes a Claimed Target in accordance with this Section 3.4.2(b)(i) but later GSK fails to pay FivePrime any Claiming Fee due with respect to such Claimed Target in accordance with Section 6.3.1, then such

Claimed Target shall thereupon cease to be a Claimed Target and shall be deemed to be a Reverted Target effective retroactively as of the date of GSK’s exercise of the Claiming Option with respect to such Claimed Target. The collection of all Claimed Targets at any given time from a particular Screening Assay shall be deemed the “Claimed Targets Basket” for such Screening Assay.

The Parties anticipate that the *** of the Offered Hits will be Targets for which Biologics may be developed as suitable pharmaceutical agents (such Offered Hits, the “Biologics Targets”). The Parties also acknowledge that it is possible that the only conceivable therapeutic agents for certain Offered Hits are Compounds (such Offered Hits, the “Compound Targets”). For each Offered Hit that GSK informs FivePrime that it wishes to elect as a Claimed Target, the JSC shall make the determination as to whether such Offered Hit is a Biologics Target or Compound Target. In the event the JSC cannot agree on whether an Offered Hit is a Biologics Target or Compound Target, GSK’s representatives on the JSC shall have the final authority to make such determination, provided that such GSK representatives shall make such final determination in good faith, and in any event not solely on the basis of differences in the length of the Option Periods and/or the amount of Election Fees between Biologics Targets and Compound Targets.

GSK will bear all costs associated with its internal evaluation of the Offered Hits Data with respect to any Offered Hits and the Claimed Targets, and FivePrime will bear its costs associated with work on Claimed Targets as defined under the Research Plan and/or as approved by the JSC, subject to Section 6.2.

Within *** days after an Offered Hit is deemed to be a Claimed Target as provided in Section 3.4.2(b)(i), and subject to Section 3.5.7, FivePrime shall transfer to GSK, at no additional cost to GSK, the Materials, FivePrime Background Know-How and FivePrime Collaboration Know-How solely to the extent necessary to enable GSK to evaluate such Claimed Target under the license granted to it under Section 4.1.1 (the “Claimed Target Data”), which Claimed Target Data may include: ***.

If GSK desires for FivePrime to produce additional recombinant protein sample of such Claimed Target, the Parties shall discuss in good faith the feasibility and cost of such production, and shall negotiate in good faith the terms of any such production. For clarity, FivePrime shall not be required to produce such additional sample unless the Parties agree on the feasibility and the terms and conditions under which such sample will be produced by FivePrime.

Option to Select Committed Lead Targets.

During the Selection Option Period (as defined in Section 3.4.4(b)) for each Claimed Target, GSK shall have an exclusive option (even as to FivePrime) with respect to each such Claimed Target, exercisable as set forth below, to select such Claimed Target for the purpose of developing, using, manufacturing and commercializing any product comprising a Biologic and/or Compound that is directed to or against (or, in the case of a *** Target, in the ***), or incorporates or is derived from, such Claimed Target (each such option, the “Selection Option”). GSK shall have the right, but not the obligation, prior to the expiration of the Selection Option Period, to exercise the Selection Option by providing FivePrime with written notice. Upon FivePrime’s receipt of such written notice from GSK that it is exercising its Selection Option with respect to a particular Claimed Target, such Claimed Target shall be deemed to be and designated as a Committed Lead Target. In the event GSK exercises its Selection Option with respect to a particular Claimed Target as provided herein, GSK shall pay FivePrime the Selection Fee as set forth in Section 6.3.2.

Subject to Section 3.4.5, the “Selection Option Period” shall mean (a) with respect to each Claimed Target that is a Biologics Target, the period commencing on the date on which GSK receives all of the Claimed Target Data for such Claimed Target, as provided in Section 3.4.3, and continuing for *** days thereafter, or for such greater period of time as mutually agreed by the Parties under an Expanded Research Plan, and (b) with respect to such Claimed Target that is a Compound Target, the period commencing on the date on which GSK receives all of the Claimed Target Data for such Claimed Target, as provided in Section 3.4.3, and continuing for *** days thereafter, or for such greater period of time as mutually agreed by the Parties under an Expanded Research Plan.

If (A) prior to the expiration of the applicable Selection Option Period, GSK notifies FivePrime that GSK will not exercise its Selection Option with respect to a particular Claimed Target, or (B) prior to the expiration of the applicable Selection Option Period, FivePrime has not received from GSK such notification of its exercise of the Selection Option with respect to a particular Claimed Target, then in either case of (A) or (B), such Claimed Target shall cease to be a Claimed Target and shall become a Reverted Target. If a Claimed Target becomes a Committed Lead Target in accordance with Section 3.4.4(a) but later GSK fails to pay FivePrime the Selection Fee due with respect to such Committed Lead Target as set forth in Section 6.3.2, then such Committed Lead Target shall thereupon cease to be a Committed Lead Target and shall be deemed a Reverted Target effective retroactively as of the date that GSK exercises its Selection Option with respect to such Committed Lead Target.

As soon as reasonably practicable, but in any event within *** Days after GSK exercises its Claiming Option with respect to a particular Claimed Target, FivePrime shall transfer to GSK, to the extent not previously provided, all FivePrime Collaboration Know-How with respect to such Target, and all additional information and data Controlled by FivePrime and related to such Committed Lead Target.

HSR Clearance. If GSK reasonably determines in good faith prior to the expiration of the applicable Selection Option Period for a particular Claimed Target that the exercise of Selection Option with respect to such Claimed Target is required to be filed with the United States Department of Justice (the “DOJ”) or the United States Federal Trade Commission (the “FTC”), as applicable, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (15 U.S.C. §18a) (“HSR”) or with equivalent foreign governmental authorities under any similar foreign law, GSK shall provide written notice of its desire to exercise such Selection Option and of the perceived HSR filing requirement to FivePrime prior to the expiration of the applicable Selection Option Period, and the applicable Selection Option Period shall be automatically extended for *** days. GSK will be obligated to submit any such filings that are required, as promptly as practicable but, in any event, within *** Business Days of FivePrime’s receipt of this written notice of a GSK perceived need to file. GSK shall provide FivePrime with a copy of the portion of GSK’s initial filing pertaining to FivePrime’s technology for FivePrime’s comment prior to its filing. In addition, GSK shall update FivePrime with any response from the FTC promptly after GSK receives such response, and shall provide

FivePrime with a copy of the portion of the proposed response thereto pertaining to FivePrime’s technology for FivePrime’s comment. If the HSR or other clearance is not granted prior to the expiration of the Selection Option Period (as extended herein), or if GSK receives a “Second Request” from the DOJ or FTC or receives a similar request for additional information and/or materials from another governmental authority in connection with such filing, the once extended Selection Option Period shall be extended again for such additional period of time as reasonably necessary (which additional period of time is not expected to exceed an additional *** days unless reasonably required to obtain clearance) to permit the Parties to obtain HSR or other governmental clearances and to respond to requests to provide additional information and/or materials to the governmental authority (or authorities). If HSR or other governmental clearance has not been granted by the expiration of the Selection Option Period (as extended herein), FivePrime and GSK shall promptly meet to discuss in good faith whether an additional extension of the Selection Option Period is reasonable under the circumstances. Notwithstanding the foregoing, nothing in this Section shall require either Party to divest any assets in such Party’s ownership or Control as of the Effective Date or during the Term. GSK shall be solely responsible for all reasonable costs and expenses of either Party in connection with the grant of any exclusive license to GSK hereunder (including all governmental filing or other fees, and any other costs and expenses) arising from pursuing or obtaining any HSR or other governmental approval addressed in this Section 3.4.5.

Tolling of Payment Obligations and Effectiveness of License. If the exercise by GSK of the Selection Option with respect to any Claimed Target requires the making of filings under HSR, then all rights and obligations related to the exercise of such Selection Option (including payment of the Selection Fee and the effectiveness of the license granted to GSK under Section 4.1.2) shall be tolled until the first to occur of: (a) expiration or termination of the Selection Option Period, as extended pursuant to Section 3.4.5 above, or (b) receipt of approval or clearance from the reviewing authority.

Exchange of Information on Reverted Targets; Re-selection of Reverted Targets. GSK shall transfer to FivePrime, within *** Business Days after an Offered Hit or Claimed Target, as applicable, becomes a Reverted Target, the GSK Evaluation Know-How arising during the evaluation of such Reverted Target, including the materials, assays, methods, data and results, if any, generated by GSK in connection with GSK’s evaluation of such Reverted Target. Notwithstanding the foregoing, if a Reverted Target from one particular Screening Assay becomes a Hit (or

Offered Hit) in a subsequent Screening Assay, then FivePrime shall present such Hit (or Offered Hit) to GSK in accordance with Section 3.4.1(a) (or Section 3.4.1(b)) above, but in any event subject to Sections 3.4.1(d)(i) and 3.4.1(d)(ii).

Conduct of Research; Sharing of Data.

Resource Commitment. Each Party shall use Commercially Reasonable Efforts to conduct, in accordance with the terms of this Agreement, the work allocated to such Party in the Research Plan. During the Research Program Term, FivePrime and GSK shall each commit sufficient resources and staffing to perform all the activities allocated to it under the Research Plan. Specifically:

FivePrime shall determine appropriate FivePrime staffing levels from time to time to resource the Research Programs sufficiently. Except for the payments by GSK as set forth in Article 6, FivePrime shall be fully responsible for its research efforts and shall bear all corresponding costs; and

GSK shall determine appropriate GSK staffing levels from time to time to resource the Research Programs sufficiently. GSK shall be fully responsible for its research efforts and shall bear all corresponding costs.

During the Research Program Term, each Party shall provide the JSC with a written update summarizing its respective activities under the Research Program, in advance of each scheduled JSC meeting. If there are any Claimed Targets, the update must describe GSK’s research with such Claimed Targets conducted in the time since the prior report to the JSC.

Sharing of Data. Subject to the specific limitations in Section 3.4, the Parties shall share the results of all research performed by or on behalf of either Party under the Research Plan or by GSK on Claimed Targets prior to the time when GSK exercises its Selection Option with respect to such Claimed Target or when such Claimed Target becomes a Reverted Target, as the case may be, provided that, nothing in this Agreement, including in this Article 3, shall be interpreted as obligating FivePrime to disclose to GSK: (a) any data obtained by FivePrime in testing any Target in any Third Party Assay; or (b) the specific identity of any Target that is a Reserved Target or a Third Party Target.

Third Party Contractors. Subject to Section 3.5.4, each Party shall be entitled, upon approval from the Working Group or JSC, to utilize the service of Third Parties (the “Contractors”) to perform its obligations under the Research Plan. Each Party shall remain at all times fully responsible for the activities allocated to it under the Research Plan.

Compliance. Each Party shall require by written agreement that all of its employees, agents, consultants and representatives, including any Contractors, involved in the Research Program are bound by obligations of confidentiality and non-use similar to those set forth in Article 7 (with a shorter duration for such obligations if appropriate which in no event shall be shorter than *** years after the receipt of the applicable confidential information by such personnel from such Party) and obligations of invention assignment sufficient for such Party to obtain rights from such personnel to meet its obligation to grant licenses to the other Party under this Agreement.

Records. Each Party shall maintain records, in sufficient detail and in good scientific manner in accordance with the standards used in its industry for drug discovery and development and appropriate for patent and regulatory purposes, which shall fully and properly reflect all work done and results achieved in the performance of the Research Program by or on behalf of such Party.

Data Integrity. Each Party agrees that it shall, and shall cause its Affiliates and Contractors to, carry out the Research Program and collect and record any data generated therefrom in a manner consistent with the following good data management practices (“Good Data Management Practices”):

Data are being generated using sound scientific techniques and processes;

Data are being accurately recorded in accordance with good scientific practices by persons conducting the Research Program hereunder;

Data are being analyzed appropriately without bias in accordance with good scientific practices;

Data and results are being stored securely and can be easily retrieved; and

Data trails exist to easily demonstrate and/or reconstruct key decisions made during the conduct of the Research Program, presentations made about the Research Program, and conclusions reached with respect to the Research Program.

Materials Transfer.

During the course of the Research Program, each Party may transfer (the “Materials Transferring Party”) to the other Party (the “Materials Receiving Party”) certain biological materials or chemical compounds pursuant to this Agreement (collectively, the “Materials”). Such Materials will be provided under the terms of this Agreement and in such amount as described in the material transfer record for the particular transfer (“MTR”), which MTR shall set forth the type and name of the Materials transferred, the amount of the Materials transferred, the date of the transfer of such Materials and the proposed use of such Materials by the Material Receiving Party.

At the time the Materials Transferring Party provides Materials to the Materials Receiving Party pursuant to this Section 3.5.7, the Materials Transferring Party shall grant, and hereby does grant to the Materials Receiving Party, a non-exclusive license under the Materials IP to use such Materials solely for the purpose set forth in the MTR.

MATERIALS SUPPLIED BY THE MATERIALS TRANSFERRING PARTY PURSUANT TO THIS SECTION 3.5.7 ARE SUPPLIED IN “AS IS” CONDITION WITH NO WARRANTY, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, TITLE, NON-INFRINGEMENT, EXCLUSIVITY, OR FITNESS FOR A PARTICULAR PURPOSE. THE MATERIALS RECEIVING PARTY SHALL NOT AND SHALL NOT PERMIT ANY PERSON TO ADMINISTER ANY SUCH MATERIALS TO HUMANS UNDER ANY CIRCUMSTANCES. ANY MATERIAL DELIVERED PURSUANT TO THIS AGREEMENT IS UNDERSTOOD TO BE EXPERIMENTAL IN NATURE AND MAY HAVE HAZARDOUS PROPERTIES. THE MATERIALS RECEIVING PARTY WILL HANDLE THE MATERIAL ACCORDINGLY AND WILL INFORM THE MATERIALS TRANSFERRING PARTY IN WRITING OF ANY ADVERSE EFFECTS EXPERIENCED BY PERSONS HANDLING THE MATERIAL. THE RECEIVING PARTY ASSUMES ALL LIABILITY FOR DAMAGES WHICH MAY ARISE FROM ITS USE, STORAGE OR DISPOSAL OF THE MATERIAL.

The Materials Receiving Party acknowledges that it does not have any claim to the Materials supplied by the Materials Transferring Party and that the Materials shall remain the sole and exclusive property of the Materials Transferring Party.

The Materials Receiving Party agrees that the Material:

will be used solely for, and in compliance with, the Research Program for the purpose identified in the MTR;

will be used in compliance with all applicable national, state and local laws, rules and regulations;

will not be used in human subjects, in clinical trials, or for diagnostic purposes involving human subjects without the written consent of the Materials Transferring Party;

will not be used in animals intended to be kept as domestic pets;

will be used only by the Materials Receiving Party’s and only in the Materials Receiving Party’s laboratory;

will not be transferred to a Third Party without the prior written consent of the Materials Transferring Party; and

will not be reverse engineered or chemically analyzed except as expressly provided by the Materials Transferring Party.

The Materials Transferring Party shall have sole control over all matters pertaining to the prosecution of Materials IP and the defense and enforcement of any Patents included in the Materials IP, in each case which Materials IP is Controlled by such Transferring Party or its Affiliates. In the event that the Materials Receiving Party conceives an invention based on any Materials from the Materials Transferring Party as provided in the MTR and obtains Patent protection therefor, the Materials Receiving Party shall own such Patents and such Patents shall not fall within the Materials IP Controlled by the Materials Transferring Party or its Affiliates. However, the Materials Receiving Party shall and hereby grants to the Materials Transferring Party a non-exclusive, non-sublicenseable (except as to the Transferring Party’s Affiliates or with the consent of the Materials Transferring Party), perpetual, worldwide, fully-paid and royalty-free license, under all of the Materials Receiving Party’s rights in and to such Patents and specifically related Know-How, to conduct any research, development or commercial activities (either alone or with a Third Party outside the scope of this Agreement).

The Materials Receiving Party assumes all liability for damages which may arise from its use, storage or disposal of the Materials. The Materials Transferring Party shall not be liable to the Materials

Receiving Party for any loss, claim or demand made by the Materials Receiving Party, or made against the Materials Receiving Party by any Third Party, due to or arising from the use of the Materials, except to the extent permitted by applicable law, when caused by the gross negligence or wilful misconduct of the Materials Transferring Party.

Upon expiration or the earlier termination of the Research Program, the Materials Receiving Party shall discontinue its use of any Materials and shall, upon direction of the Materials Transferring Party, return or destroy (and certify destruction of) any remaining Material.

Ethical Standards And Human Rights. Each Party certifies that it shall encourage compliance by itself, its Affiliates, and its and their respective personnel and Contractors with ethical standards and human rights relating to discrimination, safe and healthy work environment, fair wages and other employee rights, when performing its obligations under this Agreement.

Use of Animals in Laboratory Testing. Each Party agrees, and shall cause its Affiliates and Contractors to agree, to comply with the “3R” Principles with respect to the use of animals in the Research Program—reducing the number of animals used, replacing animals with non-animal methods whenever possible and refining the research techniques used. All work must be conducted in accordance with the core principles identified below, in addition to all relevant statutes, legislation, regulations and guidelines for the care, welfare and ethical treatment of animals used in research in the country where the Research Program is being performed. The principles set forth below describe minimum standards; local customs, norms, practices or laws may be additive to such principles.

Access to species appropriate food and water;

Access to species specific housing, including species appropriate temperature and humidity levels;

Access to humane care and a program of veterinary care;

Ability to demonstrate species specific behavior;

Study design reviewed by institutional ethical review panel;

Commitment to minimizing pain and distress during in vivo studies, and

Work performed by appropriately trained staff.

Debarment Certification. Each Party certifies that it has not been, nor will use any Person in performing this agreement that have been, debarred under the provisions of the U.S. Generic Drug Enforcement Act of 1992, 21 U.S.C. § 335a(a) and (b), or disqualified as a clinical investigator under the provisions of 21 C.F.R. § 312.70. If during the Term, either Party, or any Person engaged in performing this Agreement (i) becomes debarred or disqualified or (ii) receives notice of an action or threat of an action with respect to its debarment or disqualification, such Party shall notify the other Party immediately.

Medical Privacy. Each Party represents and certifies that any use or disclosure by such Party of identifiable information of a donor of biological materials in connection with this Agreement complies with all applicable medical privacy laws or regulations, including without limitation, any requirement to obtain the donor’s written authorization to use or disclose identifiable health information for research purposes.

License Grants to GSK.

Research License. Subject to the terms and conditions of this Agreement, during the Research Program Term (and, to the extent applicable, continuing for the period of time after the Research Program Term in which GSK continues to evaluate any Hit, Offered Hit or Claimed Target after the expiration of the Research Program Term as permitted under this Agreement but prior to the time when GSK exercises its Selection Option pursuant to Section 3.4.4(a) with respect to such Target or when such Target becomes a Reverted Target pursuant to Section 3.4.1(b), 3.4.2(b)(i), 3.4.4(c) or 4.4.5(d)(ii), as the case may be), FivePrime hereby grants to GSK a fully-paid, royalty-free, non-exclusive, right and license, with the right to grant sublicenses (as provided herein) under the FivePrime Background Patent Rights, FivePrime Background Know-How, FivePrime Collaboration Patent Rights and FivePrime Collaboration Know-How solely to the extent necessary for GSK to conduct the obligations and

responsibilities allocated to GSK under the Research Plan and to evaluate each Claimed Target to determine whether to exercise its Selection Option with respect to such Claimed Target (for any ***, solely in the ***) in the Territory. GSK may sublicense the foregoing license solely to its Affiliates and Contractors for the sole purpose of conducting GSK’s obligations and responsibilities under this Agreement on GSK’s behalf and such sublicensing right includes the right of GSK’s sublicensees to grant further sublicenses.

Development and Commercialization Licenses. Subject to the terms and conditions of this Agreement, commencing upon the designation of a Claimed Target as a Committed Lead Target pursuant to Section 3.4.4, FivePrime hereby grants to GSK an exclusive, royalty-bearing license (as set forth in Article 6), with the right to grant sublicenses (including the right to further sublicense) pursuant to Section 4.1.3, under the FivePrime Collaboration Patent Rights, FivePrime Collaboration Know-How, and FivePrime’s interest in the Joint Patent Rights and Joint Know-How, to make, have made, use, sell, offer for sale and import Licensed Product(s) (for any ***, solely in the ***) with respect to such Committed Lead Target in the Field in the Territory, and a non-exclusive, royalty-free license, with the right to grant sublicenses (including the right to further sublicense) pursuant to Section 4.1.3, under the FivePrime Background Know-How and FivePrime Background Patents, solely to the extent necessary to exercise the exclusive license granted in this Section 4.1.2 to GSK. The license granted in this Section 4.1.2 shall not be construed as granting GSK the right under any FivePrime Background Know-How, FivePrime Background Patents, FivePrime Collaboration Patent Rights, or FivePrime Collaboration Know-How, to research, develop, make, use or commercialize a Licensed Product that is directed to, derived from, or incorporates a Target other than a Committed Lead Target.

Right to Sublicense. GSK may grant sublicenses (including the right to grant further sublicenses) under the exclusive license it receives under Section 4.1.2 to any of its Affiliates or any Third Party without the prior written consent of FivePrime, provided that the agreement between GSK and such sublicensee shall be consistent with the terms and conditions of this Agreement.GSK shall remain responsible for its obligations, including payment obligations pursuant to Article 6 herein, under this Agreement that have been delegated, subcontracted or sublicensed to any of its Affiliates, sublicensees and/or subcontractors. GSK must promptly notify FivePrime of any sublicenses that it grants, including but not limited to the name and description of the sublicense, the scope of rights granted, the territory, the field and the terms of such sublicense, such terms to be disclosed solely to the extent necessary for FivePrime to determine that such sublicense complies with the terms of this Agreement.

Retained Rights.

Rights Not Granted to GSK. All rights not expressly granted herein to GSK shall be retained by FivePrime.

Right to Maintain Library. Notwithstanding the provisions of this Section 4.1, FivePrime shall retain the right to maintain any and all Hits, Offered Hits, Claimed Targets and Committed Lead Targets in FivePrime’s proprietary libraries, and, subject to the restrictions set forth in Sections 4.4.3 and 4.4.5, to use such libraries for any purpose (including conducting collaborations with Third Parties), provided that such use by FivePrime does not conflict with GSK’s rights and FivePrime’s obligations as set forth in this Agreement.

Rights to Reserved Targets. Notwithstanding anything to the contrary herein but subject to Sections 3.4.1(d)(i)(6), 4.4.3, 4.4.5(a)(i), and 4.4.5(b), FivePrime shall retain the rights to develop, manufacture and commercialize all products comprising Biologics and/or Compounds incorporating, derived from and/or directed to or against each of the Reserved Targets (including *** in the *** and Advanced Reserved Targets) and Third Party Targets, for all uses at all times, either by itself or in collaboration with a Third Party.

Subject to Section 4.4.5(d)(ii), nothing contained in this Section 4.1.4 shall be construed as preventing GSK or any of its Affiliates, either alone or with a Third Party, from researching, developing and/or commercializing a Biologic and/or Compound incorporating, derived from and/or directed to or against any Target that is not a Committed Lead Target, other than as expressly set forth in this Agreement, provided that such activity by GSK does not require a license from FivePrime under the FivePrime Background Know-How, FivePrime Background Patents, FivePrime Collaboration Know-How or FivePrime Collaboration Patents.

License Grants to FivePrime.

Research License. Subject to the terms and conditions of this Agreement, GSK hereby grants to FivePrime a fully-paid, royalty-free, non-exclusive license, effective only during the Research Program Term, under GSK Background Patent Rights, GSK Background Know-How, GSK Evaluation Patent Rights and GSK Evaluation Know-How, solely to the extent

necessary for FivePrime to conduct the obligations and responsibilities allocated to FivePrime under the Research Plan. FivePrime may grant sublicenses (with the right to grant further sublicenses) under the foregoing license solely to its Affiliates and Contractors solely to conduct such obligations and responsibilities on its behalf.

Reverted Targets. Subject to the terms and conditions of this Agreement including without limitation Section 4.4, for each Reverted Target, GSK hereby grants to FivePrime a perpetual, irrevocable, fully-paid, royalty-free, non-exclusive license, with the right to grant sublicenses (including the right to grant further sublicenses), under the GSK Evaluation Patent Rights, GSK Evaluation Know-How, Joint Patent Rights and Joint Know-How, to make, have made, use, sell, offer to sale, and import products that comprise: (a) such Reverted Target or a fragment or derivative thereof; (b) a sequence variant of such Reverted Target, or a fragment or derivative of such sequence variant; (c) a Compound or Biologic in any form that inhibits, activates or otherwise modulates the activity of such Reverted Target or its sequence variant, fragment and/or derivative; or (d) a nucleic acid-containing molecule comprising a nucleotide sequence that encodes any of the molecules described in (a)-(c) above. Promptly after a Target becomes a Reverted Target, GSK shall return or destroy, at FivePrime’s election, all FivePrime Background Know-How and FivePrime Collaboration Know-How transferred by FivePrime to GSK with respect to such Reverted Target and shall immediately cease to use such FivePrime Background Know-How and FivePrime Collaboration Know-How for any and all purposes.

For *** Targets.

To the extent not already included in Section 4.1.1 or 4.1.2, FivePrime hereby grants GSK a perpetual, irrevocable, fully-paid, non-exclusive, royalty-free license, with the right to grant sublicenses (including the right to grant further sublicenses), under the FivePrime *** Technology solely to the extent such FivePrime *** Technology licensed to GSK pursuant to this Section 4.2.3(b) would otherwise be infringed by the manufacture, use, sell, offer to sale, or import of Licensed Products *** with respect to such *** Target. “FivePrime *** Technology” shall mean, with respect to a *** Target, any and all Patents and Know-How that are Controlled by FivePrime and/or its Affiliates during the Term and arose from the research, development, manufacture and/or commercialization of Compounds and Biologics (in ***) with respect to such *** Target by or on behalf of FivePrime.

No 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 Know-How disclosed to it under this Agreement or under any Patents owned or Controlled by the other Party or its Affiliates.

Negative Covenants.

GSK hereby covenants that it shall not use any FivePrime Background Know-How, FivePrime Background Patent Rights, FivePrime Collaboration Know-How or FivePrime Collaboration Patent Rights for any purposes other than those expressly permitted in Section 4.1 or as otherwise expressly permitted in this Agreement, and GSK specifically covenants that it shall not use any FivePrime Background Know-How, FivePrime Background Patent Rights, FivePrime Collaboration Know-How, or FivePrime Collaboration Patent Rights to design or conduct screening assays, or to identify additional Targets, outside of the Research Program.

FivePrime hereby covenants that it shall not use any GSK Background Know-How, GSK Background Patent Rights, GSK Evaluation Patents, GSK Evaluation Know-How, GSK Evaluation Know-How, GSK Evaluation Patent Rights, GSK Licensed Product Patent Rights or GSK Licensed Product Know-How for any purposes other than those expressly permitted in Section 4.2 or Section 10.5 or as otherwise expressly permitted in this Agreement, and FivePrime specifically covenants that it shall not use

any GSK Background Know-How, GSK Background Patent Rights, GSK Evaluation Patents, GSK Evaluation Know-How, GSK Evaluation Know-How, GSK Evaluation Patent Rights, GSK Licensed Product Patent Rights or GSK Licensed Product Know-How to design or conduct screening assays, or to identify additional Targets, outside of the Research Program.

FivePrime hereby covenants that FivePrime shall not:

during the Research Program Term, conduct (or grant licenses to Third Parties to conduct) the Screening Assays performed under the Research Program outside the scope of the Research Program, either for itself or on behalf of any Third Party;

develop on its own or with a Third Party any product that is intended to, or does in fact, inhibit, activate or modulate the activity of any Offered Hit or Claimed Target (except in each case with respect to any *** Target in the ***) as its principal mode of action other than pursuant to this Agreement, unless such Offered Hit or Claimed Target becomes a Reverted Target;

after the Research Program Term, with respect to each Committed Lead Target, develop on its own or with a Third Party any product that is intended to, or does in fact, inhibit, activate or modulate the activity of any Committed Lead Target (except with respect to any *** in ***) as its principal mode of action other than pursuant to this Agreement, unless such Committed Lead Target becomes a Terminated Target; or

as long as GSK continues to have rights to develop or commercialize any Committed Lead Target or Licensed Products derived from such Committed Lead Target and for as long as the following information remains non-public and proprietary, disclose to any Third Party, which of the Claimed Targets have been selected by GSK as Committed Lead Targets, or the behavior of any Committed Lead Target in other screening assays without redacting the identity of such Committed Lead Target, in each case without GSK’s prior written consent.

The Parties acknowledge and agree that FivePrime’s rights with respect to the Reserved Clinical Biologics, either alone or in collaboration with a Third Party, shall not be subject to this Section 4.4.3 or Section 4.4.5. “Reserved Clinical Biologics” shall mean the products identified by FivePrime as ***.

GSK hereby covenants that GSK and its Contractors or Affiliates shall not:

subject to Section 4.4.5(a)(ii) and (b), perform, or have performed on its behalf, for the Research Indication(s) for which an Offered Hit was identified by FivePrime under a Research Plan, any research upon any such Offered Hit, or on any molecule that is intended to, or does in fact, inhibit, activate or modulate the activity of any such Offered Hit as its principal mode of action, without first designating such Target as a Claimed Target, unless such Offered Hit or molecule that inhibits, activates or modulates the activity of any such Offered Hit was included within a program being conducted by GSK on its own or with a Third Party as of the date that such Offered Hit became designated as an Offered Hit;

subject to Section 4.4.5(a)(ii) and (b), perform, or have performed on its behalf, for the Research Indication(s) for which a Claimed Target was identified by FivePrime under a Research Plan, any development or commercial activities upon any such Claimed Target, or on any molecule that is intended to, or does in fact, inhibit, activate or modulate the activity of any such Claimed Target as its principal mode of action, without first selecting such Claimed Target as a Committed Lead Target, unless such Claimed Target or molecule that inhibits, activates, incorporates, derives from or otherwise modulates the activity of any such Claimed Target or fragment or variant thereof was included within a program being conducted by GSK on its own or with a Third Party as of date that such Claimed Target became designated as a Claimed Target; or

subject to Section 4.4.5(d)(ii), perform, or have performed on its behalf, for the Research Indication(s) for which a Reverted Target or Terminated Target was identified by FivePrime under a Research Plan, any research, development or commercial activities upon any such Reverted Target or Terminated Target, or on any molecule that is intended to, or does in fact, inhibit, activate or modulate the activity of any such Reverted Target or Terminated Target as its principal mode of action, or a fragment or variant thereof, unless such Reverted Target or Terminated Target ceases to be a Reverted Target or Terminated Target.

Exclusivity.

Muscle Diseases.

FivePrime Exclusivity. Subject to Section 4.4.5(d), during the ***, FivePrime shall not, and shall cause its Affiliates not to, (alone or with or for a Third Party) research, develop, or conduct any screening assays, and shall not offer or grant rights to any Third Party under which such Third Party would research, develop or conduct any screening assays to discover, identify and/or validate Targets or associated compounds or derivatives or analogs thereof in order to develop pharmaceuticals or therapeutics to ***, and shall not research, develop or commercialize any Targets or associated compounds or derivatives or analogs thereof in order to develop pharmaceuticals or therapeutics to *** other than as set forth herein. For the avoidance of doubt, nothing herein shall be construed to impose any field limitation on any of FivePrime’s existing or future Third Party collaborations so long as the primary objective of such collaboration is not ***.

GSK Exclusivity. Subject to Section 4.4.5(d), during the ***, GSK shall not, and shall cause its Affiliates not to, (alone or with or for a Third Party) conduct any Screening Assays, and shall not offer or grant rights to any Third Party under which such Third Party would conduct any Screening Assays to discover, identify and/or validate Targets in order to develop pharmaceuticals or therapeutics to *** other than as set forth herein. For the avoidance of doubt and subject to Section 4.4.5(d), nothing herein shall be construed to prohibit GSK or its Affiliates from pursuing, or continuing to pursue any other internal GSK programs or Third Party programs ***.

***. The exclusivity terms of Section 4.4.5(a) above shall apply mutatis mutandis to FivePrime’s and its Affiliates’ activities with respect to *** during the period commencing on the Effective Date and continuing until the *** anniversary of the Effective Date, even if there are no activities during such period under the Research Program relating to ***. Such exclusivity relating to *** shall expire on the *** of the Effective Date in the event that GSK does not expand the Research Program for *** as provided in Section 3.3.2(b); provided, however, that if GSK expands the *** provided in Section 3.3.2(b), Section 4.4.4(a) above shall apply mutatis mutandis with respect to

FivePrime’s and its Affiliates and GSK’s and its Affiliates’ activities with respect to *** during the Expanded Research Program Term for ***. For clarity, nothing herein shall be construed to impose any field limitation on any of FivePrime’s or GSK’s existing or future Third Party collaborations so long as the primary objective of such collaboration is not ***. Nothing in this Section 4.4.5(b) shall be construed as any limitation of FivePrime’s right to research, develop, make, use and commercialize any Biologic and/or Compound with respect to the Reserved *** Targets, either alone or in collaboration with a Third Party. “Reserved *** Targets” shall mean the Reserved Targets identified as *** on the Reserved Target List.

No Other Limitations. Other than expressly set forth in Sections 4.4.5(a) and (b) above, FivePrime shall have the right to discuss with any Third Party the opportunity to collaborate on any indication without any obligation to GSK, and to enter into the agreement(s) to do so.

Non-Selected Targets; Reverted Targets.

Non-Selected Targets. In the event that FivePrime presents a Target as a Hit to GSK that, at the time such Hit was presented to GSK, GSK either: (a) was conducting research, development and/or commercialization activities with respect to such Target on its own as part of an internal program or as part of a program in collaboration with a Third Party in the same Research Indication for which such Hit was identified by FivePrime under the Research Program, or (b) had actual knowledge that such Target is a therapeutic target or potential therapeutic agent for the Research Indication for which such Hit was presented, in each of (a) and (b) above as evidenced by GSK’s written records (the “Non-Selected Target Criteria”), then GSK will inform FivePrime within *** Business Days after such Hit has been presented to GSK that such Hit meets the Non-Selected Target Criteria as set forth in this Section 4.4.5(d)(i). Notwithstanding the foregoing, GSK may nevertheless elect to exercise its Claiming Option with respect to such Hit as if it were an Offered Hit. If, however, GSK elects not to exercise its Claiming Option with respect to such Hit, then such Hit shall not be deemed a Reverted Target as that term is defined herein but rather shall thereafter be referred to as a “Non-Selected Target” and such Non-Selected Target shall

be considered outside of the scope of this Agreement and the Research Program with respect to the particular Research Indication for which the Hit was identified by FivePrime. For clarity, subject to the restrictions set forth in Sections 4.4.5(a)-(c), each Party may research, develop, validate, commercialize, or undertake any other activities in their sole discretion with respect to such Non-Selected Target without any further obligations, including payment obligations, of any kind to the other Party.

Reverted Targets; Reverted Target Exclusivity.

Notwithstanding anything contained in Section 4.4, nothing herein shall, expressly or impliedly, preclude or restrict either Party or their respective Affiliates in any way from: (a) acquiring a majority of the voting stock, or all or substantially all of the assets of, a Business Entity; (b) being acquired by a Business Entity; or (c) merging, amalgamating, taking over, consolidating with or engaging in any similar transaction with a Business Entity (such Party undergoing such transaction, the “Merging Party” and such transaction, a “Merger”). The term “Business Entity” means any Person, which, at the time of such Merger, is engaged in an activity that is prohibited for the Merging Party as set forth in Section 4.4 (the “Competing Activity”). Such Merger shall not constitute a breach of Section 4.4 by the Merging Party by reason of such Competing Activity, provided that such Merging Party, to the extent necessary, segregates the Competing Activity from the activities being conducted under the Research Program.

Responsibility of GSK. GSK shall have the sole control and final decision-making authority and responsibility for, at its own expense, research (beyond that undertaken in the Research Program and including conduct of further lead optimization including, but not limited to, the humanization of mouse monoclonal antibodies, the generation of domain antibodies protein or antibody engineering, small molecule screening, formulation, and other activities to improve the drug-like properties of Biologics or Compounds), preclinical development, clinical development, manufacturing (including formulation), obtaining Marketing Authorizations and commercialization of Licensed Product(s) in the Territory in the Field, subject to its diligence obligations set forth in Section 5.2 below.

Diligence and Reporting. GSK shall use Commercially Reasonable Efforts to develop and commercialize ***. Within *** days after the end of each ***, GSK shall provide FivePrime with a written report summarizing its development and commercialization activities with respect to each Committed Lead Target and its related Licensed Product(s) in such ***, which shall include, without limitation, the modality (i.e., Compound or Biologic) of the Licensed Product(s) then under development by GSK (or its Affiliates or sublicensees) for each Committed Lead Target as well as the level of staffing and resources committed by GSK for such Committed Lead Target and/or Licensed Products,

and shall be sufficiently detailed for FivePrime or its auditors to determine whether GSK has met its diligence obligations under this Agreement. GSK shall provide such additional information and documentation as is reasonably requested by FivePrime or its auditors for the purposes of verifying GSK’s satisfaction of the diligence obligation set forth in this Section 5.2.

Clinical Trial Registry. GSK shall have the right to post the results, summaries and protocols of clinical trials conducted by GSK, its Affiliates or sublicensees on Licensed Products on GSK’s clinical trial registry.

Safety Data Exchange. Within ***, or such other period of time as agreed by the Parties, after GSK exercises its option for the first Committed Lead Target hereunder, the Parties shall discuss in good faith and enter into a safety data exchange agreement to govern the management of safety of Biologics incorporating or derived from a Target (or a fragment thereof) in a manner that will allow each Party to meet the requirements for the safety and reporting of such Biologics under applicable laws.

Initial Consideration.

Technology Assessment Fee. FivePrime shall invoice GSK, and GSK shall make a one-time cash payment by wire transfer of immediately available funds to FivePrime of seven million dollars ($7,000,000) within *** Business Days after receipt by GSK of an Invoice from FivePrime.

Equity Investment. In addition, GSK shall purchase preferred equity securities of FivePrime in the amount of seven and one half million dollars ($7,500,000) at $1.85/share pursuant to the Equity Agreements to be executed by the Parties on even date herewith, with GSK’s payment to FivePrime for such securities payable upon the closing of the Equity Agreements.

Research Program Funding.

Initial Research Program. In consideration for FivePrime’s activities under the Initial Research Plan, FivePrime shall invoice GSK and GSK shall pay FivePrime *** payments on the first day of each *** starting with the *** (and for the *** during which this Agreement becomes effective, within *** Business Days after the Effective Date), in the amount of *** dollars ($***) per ***. GSK’s total payment obligation under this Section 6.2.1 shall be capped at *** dollars ($***).

Expanded Research Program.

Expansion Fee. FivePrime shall invoice GSK and GSK shall pay FivePrime the following fees (each, an “Expansion Fee”) upon its election to expand the Research Program for the applicable Research Indication pursuant to Section 3.3.2:

No expansion fee upon GSK’s election to expand the Research Program for Muscle Diseases;

*** dollars ($***) upon GSK’s election to expand the Research Program to include ***; and

An expansion fee to be agreed upon by the Parties upon GSK’s election to expand the Research Program for any other Research Indication.

Expanded Research Program Funding. In consideration for FivePrime’s activities under each applicable Expanded Research Plan, GSK shall pay FivePrime the research funding for each Expanded Research Program for the applicable Research Indication in amounts and based on a schedule to be agreed upon by the Parties at the time of such expansion. Milestone and royalty payments shall be as described in Sections 6.3 and 6.4 below.

Milestone Payments. FivePrime shall invoice GSK, and after receipt by GSK of an Invoice, GSK shall pay to FivePrime the milestone payments set forth in this Section 6.3 within the period of time set forth herein.

Claimed Target Claiming Fee. GSK shall pay to FivePrime within *** days or *** days if the Claimed Target is for an Other Indication) after receipt by GSK of an Invoice following exercise by GSK of its Claiming Option as follows: (a) in consideration for up to the first *** Offered Hits resulting from a particular Screening Assay that GSK exercises its Claiming Option to select as Claimed Targets, GSK shall pay a non-creditable, non-refundable payment in a lump sum amount of *** dollars (US$***), payable in full upon GSK’s exercise of its Claiming Option with respect to the first Claimed Target; and (b) in consideration for each subsequent Offered Hit that GSK exercises its Claiming Option to select as a Claimed Target (i.e., the sixth Claimed Target and all subsequent Claimed Targets), a non-creditable, non-refundable payment in the amount of *** dollars (US$***) for each Claimed Target (in each case, the “Claiming Fee”).

Committed Lead Target Selection Fee. For each Committed Lead Target, following exercise by GSK of its Selection Option and within *** days (or *** days in the event that either (i) GSK has notified FivePrime that the Committed Lead Target has been transferred to a drug development unit within GSK (e.g., GSK’s Medicines Development Centers), or (ii) the Committed Lead Target was selected for an Other Indication) after receipt by GSK of an Invoice, GSK shall pay to FivePrime, as follows: a non-creditable, non-refundable payment for each Claimed Target for which GSK exercises the Selection Option under Section 3.4.4 to select as a Committed Lead Target, in the amount of *** dollars (US$***) for each Biologics Target and *** dollars (US$***) for each Compound Target (the “Selection Fee”). For clarity, if both Biologics and Compounds may be suitable pharmaceutical agents for a particular Target, such Target shall be deemed a Biologics Target for purposes of payment of the Selection Fee, and the higher Selection Fee shall apply. In the event a Target that was deemed a Compound Target at the time GSK pays such Selection Fee is later deemed a Biologics Target by reason of the activities of GSK, its Affiliates, sublicensees or subcontractors as described in Section 3.4.2(b)(ii) and GSK had previously paid a Selection Fee in the amount of *** dollars (US$***) for such Target, then GSK shall pay to FivePrime a makeup Selection Fee of *** dollars (US$***) as soon as such Target becomes a Biologics Target under Section 3.4.2(b)(ii).

Development and Regulatory Milestones. On a Licensed Product-by-Licensed Product basis, GSK shall pay FivePrime the following milestone payments in accordance with the procedure set forth in Section 6.3.4. Each such payment shall be non-refundable and non-creditable. No milestone payments will be paid for milestone events that are not achieved. Different Licensed Product modalities (e.g., antibody Biologic and small molecule Compound) directed to the same Committed Lead Target shall trigger separate, non-creditable milestone payment obligations; provided, however, that the milestones will be payable only once with respect to a Biologic or Compound, regardless of how many times the milestone is achieved by such Biologic or Compound, except as expressly set forth in Section 3.4.1(d)(i)(6)(dd). For clarity, Licensed Products for each Committed Lead Target generated pursuant to any Expanded Research Program for Muscle Diseases, *** and/or Other Indication shall be subject to the same milestone payments as Licensed Products for the Committed Lead Target generated pursuant to the Initial Research Program.

For ECD Products. GSK shall pay to FivePrime the amount set forth below for the achievement of the corresponding milestone for each ECD Product:

For Licensed Product Comprising Biologics that are not ECD Products. GSK shall pay to FivePrime the amount set forth below for the achievement of the corresponding milestone for each Licensed Product that comprises a Biologic (and that is not an ECD Product or a Compound):

Licensed Product Comprising a Compound. GSK shall pay to FivePrime the amount set forth below for the achievement of the corresponding milestone for each Licensed Product that comprises a Compound:

Notice of Milestone Achievement.

Within *** days following the achievement of each milestone set forth in Section 6.3.3, GSK shall notify FivePrime in writing of the achievement of such milestone, after which FivePrime shall invoice

GSK for the applicable milestone payment. GSK shall pay the appropriate milestone payment within *** days *** days in the event that GSK has notified FivePrime in writing that the Licensed Product has been transferred to a drug development unit within GSK (e.g., GSK’s Medicines Development Centers), or if the Licensed Product is being developed for an Other Indication) after receipt by GSK of an Invoice. The milestone payments set forth in Section 6.3.3 shall be payable only upon the initial achievement of the particular milestone for each Licensed Product, and no amounts shall be due hereunder for subsequent or repeated achievement of the same milestone by the same Licensed Product.

If any preclinical or clinical development milestone triggering event in Section 6.3.3 is skipped for a particular Licensed Product, the milestone payment that would otherwise have been due for such skipped milestone triggering event shall be due and payable on the occurrence of the next to occur milestone triggering event for such Licensed Product. For example, if GSK conducts a Phase 1 study of Licensed Product, and then chooses not to conduct a Phase 2 study and instead begins a Phase 3 study, both payments associated with the initiation of a Phase 2 and a Phase 3 trial would be due at the initiation of the Phase 3 trial.

Royalties.

Royalties for Licensed Products. GSK shall pay FivePrime royalties on a Calendar Quarterly basis, calculated on a Licensed Product-by-Licensed Product and country-by-country basis, as set forth in this Section 6.4. For clarity, Licensed Products for each Committed Lead Target generated pursuant to any Expanded Research Program for Muscle Diseases, *** and/or Other Indication shall be subject to the same royalty payment obligations as Licensed Products for the Committed Lead Target generated pursuant to the Initial Research Program.

Licensed Products Comprising a Biologic. GSK shall pay to FivePrime royalties at the rate set forth below on Net Sales of each Licensed Product that comprises a Biologic:

Licensed Product Comprising a Compound. GSK shall pay to FivePrime royalties at the rate set forth below on Net Sales of each Licensed Product that comprises a Compound:

Reduction in Royalty for Generic Products. Subject to Section 6.4.4 below, in the event that one or more Generic Product(s) (defined below) are sold in a country and such Generic Product(s) account for at least ***% of the aggregate unit sales of such Generic Product(s) and the Licensed Product in such country, the applicable patent royalty rates set forth in Section 6.4.1(a) and/or (b) above shall be reduced by *** percent (***%) for such Licensed Product sold in such country. The term “Generic Product” means: (i) with respect to a Licensed Product comprising a Compound sold in a country and approved for a particular indication, an AB-rated Generic Product that: (A) is owned by a Third Party that has not obtained the rights to such product as a sublicensee or distributor of GSK or any of its Affiliates; (B) contains as an active ingredient the same Licensed Product (or salt, metabolite, prodrug or other physical form thereof, or equivalent as determined by the relevant regulatory authority) as contained in such Licensed Product; and (C) is approved for use in the same country as such Licensed Product pursuant to 21 U.S.C. 355(b)(2), an abbreviated new drug

application, a separate NDA (excluding any NDA owned by GSK or any of its Affiliates), compendia listing, or other drug approval application (excluding any NDA owned by GSK or any of its Affiliates), including any and all foreign equivalents of the foregoing; and (ii) with respect to a Licensed Product comprising a Biologic, a product that: (A) is owned by a Third Party that has not obtained the rights to such product as a sublicensee or distributor of GSK or any of its Affiliates; (B) contains as an active ingredient the same biologic (i.e., identical relevant amino acid sequence) as contained in such Licensed Product; and (C) is approved for use in the same country as such Licensed Product.

Royalty Term. Subject to 6.4.1(c), 6.4.3, 6.4.4 and any other expressly stated reductions in royalty obligations set forth in this Agreement:

Patent Royalty. GSK’s royalty payment obligation shall expire, on a Licensed Product-by-Licensed Product and country-by-country basis, on the later of: (a) the twelfth (12^th) anniversary of the First Commercial Sale of such Licensed Product in such country; or (b) the expiration of the last-to-expire Valid Claim of any FivePrime Collaboration Patent Rights or Joint Patent Rights that Covers such Licensed Product in such country (the “Royalty Term”), provided that, in countries where all Valid Claims Covering a Licensed Product have expired prior to the twelfth (12^th) anniversary of the First Commercial Sale of Licensed Product in such country, the royalty rates set forth in Section 6.4.1 for such Licensed Product for such country shall be reduced by *** percent (***%) for the remainder of the Royalty Term, after which GSK shall have no further obligation to pay any royalties for Net Sales of Licensed Product accruing in a particular country.

Know-How Royalty. In the event that a Licensed Product, on a Licensed Product-by-Licensed Product and country-by-country basis, is not Covered by a Valid Claim included within the FivePrime Collaboration Patent Rights or Joint Patent Rights in such country as of the date of the First Commercial Sale of Licensed Product in such country, then GSK shall pay to FivePrime a royalty equal to *** percent (***%) of the royalty rates set forth in Section 6.4.1 (the “Know-How Royalty”) until the twelfth (12^th) anniversary of the First Commercial Sale of such Licensed Product in such country, after which GSK shall have no further obligation to pay a Know-How Royalty for Net Sales of Licensed Product accruing in a particular country. If, however, during such twelve years during which GSK

is paying to FivePrime a Know-How Royalty for a Licensed Product in a country as set forth in this Section 6.4.2(b), such Licensed Product becomes covered by a Valid Claim of any FivePrime Collaboration Patent Rights or Joint Patent Rights in such country, then GSK shall thereafter pay royalties to FivePrime as set forth in Section 6.4.2(a) above for the remainder of the Royalty Term. For the avoidance of doubt, in the event that GSK is paying a royalty to FivePrime pursuant to Section 6.4.2(a) above for a Licensed Product in a particular country, then GSK shall not also pay to FivePrime the Know-How Royalty as set forth in this Section 6.4.2(b).

Third Party Obligations.

In the event it was or becomes necessary for FivePrime to obtain a license under any intellectual property owned by a Third Party in order for FivePrime to practice its Platform Technology in conducting the Screening Assays, FivePrime shall be solely responsible for the costs incurred by FivePrime in connection with having obtained or obtaining such license.

On a country-by-country and Licensed Product-by-Licensed Product basis, in the event it is necessary for GSK to obtain a license under a Patent owned or controlled by a Third Party Covering ***, such that such Licensed Product, absent such license would otherwise infringe such Third Party Patent, then GSK shall be solely responsible for obtaining such license and shall be responsible for payment of all the costs incurred in connection with obtaining such license, provided that, subject to Section 6.4.4 below, GSK shall have the right to credit *** percent (***%) of any patent royalty paid by GSK to such Third Party for the license under such Valid Claim towards GSK’s royalty payment obligation to FivePrime under Section 6.4.1(a) or (b), as applicable, provided that in no event shall the quarterly royalty rates set forth in Sections 6.4.1(a) and (b) be reduced by more than an amount equal to *** percent (***%) of the otherwise applicable royalty due. In the event FivePrime disputes as to whether such Third Party license is necessary and/or whether any offset under this Section 6.4.3(b) shall apply to such Third Party license, the matter shall be referred to the JPC for resolution. In the event the JPC members from both Parties cannot agree on the matter, then either Party may refer such matter for resolution to an independent patent attorney mutually agreed upon by the Parties who has at least *** years of experience in the biologics field (or who has such other similar credentials as mutually agreed by the Parties), and such attorney’s decision on the matter shall be binding upon the Parties.

Royalty Reductions. The Parties agree that, notwithstanding the royalty rate reduction mechanisms set forth in this Section 6.4, in no event shall the royalty rate for a particular Licensed Product be reduced below the rate for the Know-How Royalty, by operation of Sections 6.4.1(c), 6.4.2 and/or 6.4.3.

Reports; Payment of Royalty. During the Term, and following the First Commercial Sale of any Licensed Product, GSK shall furnish to FivePrime a written report for the Calendar Quarter showing (i) for each of the Major Markets, on a Licensed Product-by-Licensed Product basis and for all Licensed Product(s) sold in the Territory during the reporting period and the royalties payable under this Agreement, the gross sales, all deductions and adjustments in the calculation of Net Sales, Net Sales and royalties due, and (ii) for all other sales outside of the Major Markets, on a Licensed Product-by-Licensed Product basis and for all Licensed Product(s) sold in the Territory during the reporting period and the royalties payable under this Agreement, the gross sales, basic reconciliation with Net Sales, and royalties due. Reports shall be due on the *** day following the close of each Calendar Quarter. Royalties shown to have accrued by each royalty report shall be due and payable on the date such royalty report is due.

Payment Date. If GSK fails to pay any such undisputed milestones, royalties or any other payments according to this Agreement in full on or before such date, interest on such amount shall accrue at a rate of interest of *** percent (***%) above the average rate of the *** LIBOR as published in the Wall Street Journal, Eastern U.S. Edition (“LIBOR Rate”), effective for the applicable days of the period of default. GSK shall keep complete and accurate records in sufficient detail to enable the royalties payable hereunder to be determined.

Audits.

Upon *** days prior written request of FivePrime and not more than once in each Calendar Year, GSK shall permit an independent certified public accounting firm of nationally recognized standing selected by FivePrime, at FivePrime’s expense, to have access during normal business hours to such of the records of GSK as may be reasonably necessary to verify the accuracy of the royalty reports hereunder for any year ending not more than *** months prior to the date of such request; provided that if FivePrime has timely commenced an audit with respect to any earlier time period and such

audit shall be pending or its results disputed, FivePrime shall have continued access to the records of such earlier time period. The accounting firm shall disclose to FivePrime whether the royalty reports are correct or incorrect, the amount of any royalty discrepancy, as well as the calculation of the foregoing.

If such accounting firm correctly identifies an underpayment made by GSK during such period, GSK shall pay FivePrime *** percent (***%) of the amount of the underpayment, plus applicable interest as set forth in Section 6.6 above, within *** days of the date FivePrime delivers to GSK such accounting firm’s written report so concluding, or as otherwise agreed upon in writing by the Parties. The fees charged by such accounting firm shall be paid by FivePrime; provided, however, if such audit uncovers an underpayment by GSK that exceeds *** percent (***%) of the total payment due for the period under audit, then the fees of such accounting firm shall be paid by GSK. In the event that the accounting firm uncovers an overpayment by GSK, then such overpayment by GSK shall be credited against any royalty payments owing in the Calendar Quarter following the Calendar Quarter in which such audit was completed, such future royalty payments to be adjusted accordingly on a carry-forward basis until such overpayment amount has been fully credited against future royalties owing to FivePrime.

GSK shall include in each sublicense granted by it pursuant to this Agreement a provision requiring the sublicensee to make reports to GSK, to keep and maintain records of sales made pursuant to such sublicense and to grant access to such records by FivePrime’s independent accountant to the same extent required of GSK under this Agreement.

FivePrime shall treat all financial information subject to review under this Section 6.7 or under any sublicense agreement in accordance with the confidentiality and non-use provisions of this Agreement, and shall cause its accounting firm to enter into an acceptable confidentiality agreement with GSK and/or its Affiliates obligating it to retain all such information in confidence pursuant to such confidentiality agreement.

Payment Method and Exchange Rate. All payments to be made by GSK to FivePrime under this Agreement shall be made in United States dollars and shall be paid by wire transfer to the FivePrime bank account designated in writing by FivePrime from time to time. In the case of any amounts payable or receivable in a foreign currency, the Parties shall apply the spot rate of exchange in effect on the last day of business for a given calendar quarter in which such amounts becomes payable or receivable, as published by Reuters.

In the event that GSK changes the exchange rate reference used in its internal accounting procedures generally applicable to GSK’s accounting practice during the Term of the Agreement, GSK shall so notify FivePrime and the Parties shall use such new reference for calculating the rate of exchange thereafter for the remainder of the Term.

Withholding Tax. If laws or regulations require withholding of any taxes imposed upon FivePrime on account of any royalties and advance payments paid under this Agreement, such taxes shall be deducted by GSK as required by law from such remittable royalty and advance payment and shall be paid by GSK to the proper tax authorities. Official receipts of payment of any withholding tax shall be promptly secured by GSK and sent to FivePrime as evidence of such payment. GSK shall cooperate with FivePrime in the event FivePrime claims exemption from such withholding or seeks deductions under any double taxation or other similar treaty or agreement from time to time in force.

Confidential Information. “Confidential Information” shall mean all Information disclosed by one Party (the “Disclosing Party”) in writing, visually, orally or in electronic medium to the other Party (the “Receiving Party”) and clearly marked or identified as confidential at the time of disclosure. In addition, Know-How generated under this Agreement by one Party and as to which the other Party holds an exclusive license or has a right to receive an exclusive license shall be treated as Confidential Information of both Parties so long as such license or right remains in effect. Once such exclusive license or right to receive an exclusive license terminates (or the scope of an exclusive license is reduced), the related Know-How shall be treated as the Confidential Information of the Party that generated such Know-How. Except as expressly set forth herein, the terms of this Agreement and the Know-How generated under this Agreement shall be the Confidential Information of both Parties and both Parties shall have the obligations set forth in this Article 7 with respect thereto.

Nondisclosure Obligation. Subject to Sections 7.3 and 7.4, unless the Disclosing Party provides prior written consent, all Confidential Information of the Disclosing Party shall be maintained in confidence by the Receiving Party, shall not be disclosed by the Receiving Party to any Third Party and shall not be used by the Receiving Party for any purpose except in connection with the exploitation of its rights or fulfillment of its obligations under this Agreement.

Exceptions. Each Party’s confidentiality and non-use obligations under this Agreement shall not apply to any portion of the Confidential Information of the Disclosing Party that the Receiving Party can demonstrate with competent written proof:

Is known by the Receiving Party at the time of its receipt, without obligation of confidentiality or non-use, and not through a prior disclosure by the Disclosing Party, as documented by the Receiving Party’s written records;

Is in the public domain before its receipt from the Disclosing Party, or thereafter enters the public domain through no fault of the Receiving Party;

Is subsequently disclosed to the Receiving Party, without obligation of confidentiality or non-use, by a Third Party who may lawfully do so and who is not under an obligation of confidentiality to the Disclosing Party; or

Is developed by the Receiving Party independently of Information received from the Disclosing Party without reference to such Disclosing Party Information, as documented by the Receiving Party’s business records.

Permitted Disclosure. Nothing in this Article 7 shall be construed to restrict the Receiving Party from disclosing Confidential Information to the extent that such disclosure:

Is made to governmental or other regulatory agencies in order to obtain patents addressed in this Agreement or to gain or maintain authorizations to conduct Clinical Trials or to market Licensed Products, but such disclosure may be only to the extent reasonably necessary to obtain such patents or authorizations and reasonable measures shall be taken to obtain confidential treatment from regulatory agencies for such information;

Is made to the Receiving Party’s Affiliates, potential and actual sublicensees, employees, officers, directors, agents, consultants, and/or other Third Parties for purposes the Receiving Party reasonably deems necessary or advisable for the exploitation of its rights or fulfillment of its obligations under this Agreement, provided that all such recipients agree to be bound by, or are otherwise bound by, confidentiality and non-use

obligations that are no less stringent than those confidentiality and non-use provisions contained in this Agreement (with potentially a shorter duration no less than *** years from the date such Information is disclosed to such recipients);

Is deemed necessary by the Receiving Party to be disclosed to attorneys, independent accountants, potential or actual acquirers, merger candidates or investors or venture capital firms, investment bankers or other financial institutions or investors, provided that, except with respect to the disclosure of pro forma financial projections, all such recipients agree to be bound by confidentiality and non-use obligations; or

Is required by applicable law, valid order of a court of competent jurisdiction, or judicial or administrative process, provided that the Receiving Party shall promptly inform the Disclosing Party of the disclosure that is being sought in order to provide the Disclosing Party, where possible, an opportunity to challenge, limit or receive confidential treatment for the required disclosure, and further provided that the Receiving Party shall take all steps reasonably necessary to challenge, limit or receive confidential treatment for, the required disclosure.

Publicity. The Parties agree that the public announcement of the execution of this Agreement shall be substantially in the form of the press release attached as Exhibit 3. Any other publication, news release or other public announcement relating to this Agreement or to the performance hereunder that would disclose information other than that already in the public domain, shall first be reviewed and approved by both Parties. For clarity, neither Party shall be obligated to obtain consent to re-issue or reiterate information previously disclosed with the consent of, or disclosed by, the other Party. Notwithstanding the foregoing, FivePrime shall have the right to disclose publicly: (a) the fact that it is engaged in a research collaboration with GSK; (b) GSK’s exercise of its Selection Option for a Committed Lead Target (in each case without disclosing the identity of such Target(s)); (c) GSK’s decision to expand the Research Program for any Research Indication under Section 3.3.2; (d) FivePrime’s receipt of any development and/or regulatory milestone payment under Section 6.3, (e) the First Commercial Sale of any Licensed Product under this Agreement; and (f) royalties received from GSK by FivePrime (without disclosing the royalty rate or the Net Sales reported by GSK). For each such disclosure outlined in subsections (b) through (f) above, unless FivePrime otherwise has the right to make such disclosure under this Article 7, FivePrime shall provide GSK with a draft of such disclosure at least *** Business Days prior to its intended release for GSK’s review and comment, and shall consider in good faith incorporation any such comment from GSK. If FivePrime does not receive comments from

GSK within *** Business Days after FivePrime provides such draft to GSK, then FivePrime shall have the right to make such disclosure without further delay. FivePrime shall have the right to disclose to current or prospective investors, the amount of GSK’s equity purchase, ownership, and per share purchase price. In addition, FivePrime shall have the right to list all Licensed Products on its website and in presentations of its product pipeline, identifying such Licensed Products with FivePrime’s or GSK’s internal reference number only and use GSK’s logos and name in connection therewith to indicate that such Products are products under a collaboration with GSK.

Publications. GSK shall have the right to publish manuscripts, abstracts, or other articles in scientific journals relating to any Committed Lead Targets or Licensed Products without obtaining the prior written consent of FivePrime; provided, however, that FivePrime shall have the right to review and comment upon, such comments to be considered by GSK in good faith, such manuscripts, abstracts, or other articles in which a FivePrime employee is also named as an author. Either Party may publish manuscripts, abstracts, or other articles in scientific journals relating to any Hit, Offered Hit, Claimed Target, Reverted Target, or Terminated Target, upon the prior written consent of the other Party, such consent not to be unreasonably withheld. In the event that either Party desires to make a publication pursuant to this Section 7.6, such Party shall provide a copy of the proposed manuscript (including abstracts, or presentation to a journal, editor, meeting, seminar or other third party) to the other Party for comment at least *** days (or *** days for any abstract submitted to a conference) prior to submission of such proposed manuscript for publication; the object being to prevent either the endangerment of applications for the protection of property rights by premature publications detrimental to their novelty or the disclosure of Confidential Information. If, during the *** days (or *** days, as applicable) specified above the non-publishing Party notifies the other Party that a proposed manuscript contains patentable subject matter which requires protection, the non-publishing Party may require the delay of the publication for a period of time not to exceed *** days (or *** days, for any abstract submitted to a conference) for the purpose of allowing the pursuit of such protection. The publishing Party shall delete from the proposed manuscript prior to submission all Confidential Information of the non-publishing Party that the non-publishing Party identifies in good faith and requests to be deleted. If no response is received from the non-publishing Party within *** days (or *** days, as applicable) of the date the proposed manuscript was submitted to the non-publishing Party, it may be conclusively presumed that the publication may proceed without delay.

Ownership of Inventions.

Inventorship for patentable inventions conceived or reduced to practice on a worldwide basis during the course of the performance of activities pursuant to this Agreement shall be determined in accordance with United States patent laws and, except as otherwise expressly set forth herein, ownership of any Patent rights arising under this Agreement shall be determined by inventorship.

FivePrime and GSK shall each own an undivided one-half right, title and interest in and to the Joint Know-How and Joint Patent Rights. Except to the extent that Joint Know-How or Joint Patent Rights are exclusively licensed to the other Party under this Agreement, each Party may exploit, license, or sublicense (with the right to further sublicense) the Joint Know-How and Joint Patent Rights without the consent of, or a duty of accounting to, the other Party.

Filing, Prosecution and Maintenance of Patents.

Rights and Responsibilities with Respect to Certain Patents.

As between the Parties, FivePrime shall have the sole right, at its discretion and expense and outside of the scope of review by the JPC, to file, prosecute and maintain Patents that are directed to: (i) any FivePrime Background Know-How; (ii) any FivePrime Collaboration Know-How to the extent such FivePrime Collaboration Know-How is an improvement of or relates solely to FivePrime Platform Technology (Patents directed to subsection (i) and/or (ii) above, collectively, the “FivePrime Platform Patents”); or (iii) any Reserved Target, Third Party Target, Reverted Target or Terminated Target, or any Biologic or Compound with respect to any such Target.

As between the Parties, GSK shall have the sole right, at its discretion and expense and outside of the scope of review by the JPC, to file, prosecute and maintain the GSK Background Patent Rights and GSK Licensed Product Patent Rights.

As between the Parties, the Parties’ rights and responsibilities with respect to Target Patents shall be as follows:

Prior to GSK’s exercise of its Selection Option with respect to any Target and such Target becoming a Committed Lead

Target, FivePrime will be responsible for, and will have final decision making authority with respect to, filing, prosecuting and maintaining all Target Patents pertaining to such Target, and GSK shall reimburse FivePrime for all reasonable and documented third-party costs and expenses incurred by FivePrime and approved by the JPC after the Effective Date in connection with such activities. FivePrime shall act diligently to secure the most favorable patent protection reasonably available for such Patents in countries where it is commercially reasonable to do so and shall not narrow or abandon any claims without the prior written notice to GSK through the JPC.

After GSK exercises its Selection Option with respect to a particular Target and such Target becomes a Committed Lead Target, GSK shall have the option, in its sole discretion and at its costs and expense, to elect to file, prosecute and/or maintain, as applicable, Target Patents that are specific to such Committed Lead Target or Licensed Products corresponding to such Committed Lead Target, by providing FivePrime, through the JPC, written notification of such election. GSK shall make such election within *** Business Days after such Target becomes a Committed Lead Target, and in the event GSK does not make such election, GSK shall be deemed to have made the election not to file, prosecute and maintain such Target Patents. Upon receiving notification of GSK’s election to file, prosecute and/or maintain such Target Patents, FivePrime shall timely and orderly transfer the filing, prosecution and maintenance of such Target Patents to GSK in a manner that would not cause material disruption thereto. In the event GSK makes such election, GSK will have final decision making authority with respect to the filing, prosecution and/or maintenance of such Target Patents. Further, GSK shall act diligently to secure the most favorable patent protection reasonably available for such Target Patents in countries where it is commercially reasonable to do so and shall not narrow or abandon any claims without the prior written notice to FivePrime through the JPC. In the event GSK does not make such an election at this time, responsibility for non-elected Target Patents will continue as described in 8.2.1(c)(i) above. GSK will maintain the right to elect such Target Patents as necessary provided that the Target that is

the subject of such Target Patents has not become a Terminated Target (e.g., upon exercising its Selection Option for future Targets or upon the expansion of scope of a Target Patent such that it is directed to a Committed Lead Target or Licensed Product). For clarity, in no event shall GSK obtain the rights to file, prosecute and/or maintain Patents owned by FivePrime that are directed to FivePrime Platform Technology and/or any Reserved Target or Third Party Target.

Promptly after any Committed Lead Target becomes a Terminated Target pursuant to Section 10.5.1, FivePrime shall have the right (but not the obligation) to, at FivePrime’s cost and expense and outside the scope of review by the JPC, resume the responsibility to file, prosecute and maintain the Target Patents with respect to such Terminated Target, by providing GSK through the JPC written notification of its intent to do so. Upon receiving such notification, GSK shall timely and orderly transfer the filing, prosecution and maintenance of such Target Patents to FivePrime in a manner that would not cause material disruption thereto.

Other Patents. For Collaboration Patents that are not FivePrime Platform Patents or Target Patents, each Party will be responsible for, and will have final decision making authority with respect to, filing, prosecuting and maintaining all such Patents solely owned by such Party, at such Party’s cost and expense, and the Parties will cooperate to file, prosecute and maintain such Patents jointly owned by the Parties through the JPC (with each Party bearing *** percent (***%) of the reasonable out-of-pocket costs incurred by the Parties in connection with such filing, prosecution and maintenance), provided that, if one Party desires not to pursue patent protection with respect to certain Joint Know-How, and the other Party desires to pursue such protection, as determined and documented by the JPC, then such other Party shall have the right to pursue file, prosecute and maintain Patents directed to such Joint Know-How at its sole expense and sole discretion.

Comment Rights. In connection with the filing, prosecution and maintenance of Collaboration Patents set forth in Section 8.2.1(c) and (d), the filing Party shall give the non-filing Party an opportunity to review, prior to filing, the draft text of each Collaboration Patent application, and

the draft text of each office action or substantive prosecution document (after the initial application is filed) for each such Collaboration Patent, shall consult with non-filing Party with respect thereto, shall take the non-filing Party’s reasonable written comments into account when finalizing such document, provided the non-filing Party promptly submits its written comments to allow the filing Party sufficient time to prepare and file its response and not lose its rights or reduce any patent term adjustment and shall supply the non-filing Party with a copy of the document as filed and with all substantive notices received from the relevant patent office with respect to such Collaboration Patent. The non-filing Party for such Collaboration Patent shall cooperate with the filing Party in filing and prosecuting such Collaboration Patent, including without limitation, providing the filing Party with data and other information as appropriate and executing all necessary paperwork. The filing Party shall keep the non-filing Party advised of the status of such Collaboration Patent. The filing Party shall promptly give notice to non-filing Party of the grant, lapse, revocation, surrender, invalidation, or abandonment of such Collaboration Patent.

Certain Actions. All interferences, oppositions, appeals or petitions to any Board of Appeals in the patent office, appeals to any court for any patent office decisions, reissue proceedings and re-examination proceedings with respect to a Collaboration Patent shall be considered patent prosecution matters and shall be handled in accordance with this Section 8.2.

Enforcement and Defense

Each Party shall give the other Party written notice of any infringement of FivePrime Collaboration Patent Rights (other than FivePrime Platform Patents) or Joint Patent Rights by a Third Party through the making or selling of any Licensed Product (a “Product Infringement”), within *** days after such Product Infringement comes to such Party’s attention. GSK and FivePrime shall thereafter consult and cooperate fully to determine a course of action, including but not limited to the commencement of legal action by either or both GSK and FivePrime, to terminate any such Product Infringement. However, GSK, upon notice to FivePrime, shall have the first right to initiate and prosecute such legal action at its expense and in the name of FivePrime and GSK, or to control the defense of any declaratory judgment action relating to such Product Infringement, provided that GSK shall not enter into any settlement or compromise that would materially diminish or adversely affect the scope, exclusivity or duration of any FivePrime Collaboration Patent Rights or Joint Patent Rights or FivePrime’s rights under this Agreement, without FivePrime’s prior written consent.

In the event that GSK elects not to initiate and prosecute an action pertaining to a Product Infringement, and FivePrime elects to do so, the costs of any agreed-upon course of action to terminate such Product Infringement, including without limitation the costs of any legal action commenced or the defense of any declaratory judgment, shall be borne by FivePrime, except that FivePrime shall not be responsible for any costs incurred by GSK unless such costs were incurred at FivePrime’s written request. FivePrime shall have the right to join GSK as a party to such action if GSK is a necessary party to such action.

In connection with any action under this Section 8.3, GSK and FivePrime will reasonably cooperate and will provide each other with any information or assistance that either may reasonably request. Each Party shall keep the other informed of developments in any such action or proceeding, including, to the extent permissible by law, consultation on and approval of any settlement, the status of any settlement negotiations and the terms of any offer related thereto. Each Party shall have the right to be represented by counsel of its own choice at its own expense for any action set forth in this Section 8.3.

If a Party desires to bring an enforcement action under a Collaboration Patent, but is unable to do so solely in its own name, the other Party will, at the request of the enforcing Party, join such action as a party and will reasonably cooperate and cause its Affiliates to reasonably cooperate to execute all documents necessary for the enforcing Party to initiate litigation to prosecute and maintain such action.

Any recovery obtained by either or both GSK and FivePrime in connection with or as a result of any action contemplated by this Section 8.3, whether by settlement or otherwise, shall be shared in order as follows:

The Party which initiated and prosecuted the action shall recoup all of its costs and expenses incurred in connection with the action;

The other Party shall then, to the extent possible, recover its costs and expenses incurred in connection with the action; and

Any remainder shall be retained by the Party initiating such action, and in the event GSK is such Party, such remainder shall be deemed Net Sales and subject to the royalty payments to FivePrime under Section 6.4.

The provisions under Sections 8.3.1 through 8.3.5 shall apply, mutatis mutandis, in the event a Licensed Product becomes a Terminated Product pursuant to Section 10.2 or 10.3 and GSK grants a license to FivePrime under the GSK Evaluation Patents and GSK Licensed Product Patents for the development, manufacture and commercialization of such Terminated Product.

Representations and Warranties of Each Party. Each Party represents and warrants to the other Party that as of the Effective Date:

It has the full right, power and authority to enter into this Agreement and to perform its obligations hereunder; and

This Agreement has been duly executed by it and is legally binding upon it, enforceable in accordance with its terms, and does not conflict in any material fashion with the terms of any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it.

FivePrime Representation and Warranties. FivePrime represents and warrants to GSK that as of the Effective Date:

It has the full right, power and authority to grant the licenses granted under this Agreement and to conduct the activities to be conducted by FivePrime under this Agreement as contemplated by the Initial Research Plan existing as of the Effective Date;

It has not previously assigned, transferred, conveyed, exclusively licensed, or otherwise encumbered its right, title and interest in FivePrime Background Know-How or FivePrime Background Patent Rights, if any, in any manner that would prevent it from granting the licenses set forth in Section 4.1;

FivePrime (a) has not received any notice from a Third Party asserting any ownership rights to any Know-How Controlled by FivePrime, and (b) is not aware of any pending or threatened action, suit, proceeding or claim by a Third Party asserting that FivePrime is infringing or has misappropriated or otherwise is violating any patent, trade secret or other proprietary right of any Third Party; and

GSK Representation and Warranties. GSK represents and warrants to FivePrime that as of the Effective Date:

It has the full right, power and authority to grant the licenses in Section 4.2 and to conduct the activities to be conducted by GSK under this Agreement as contemplated by the Initial Research Plan existing as of the Effective Date; and

It has not previously assigned, transferred, conveyed or otherwise encumbered its right, title and interest in GSK Background Know-How or GSK Background Patent Rights, if any, in any manner that would prevent it from granting the licenses set forth in Section 4.2.

Covenant. During the Research Program Term, neither Party will knowingly use any material, technology, or intellectual property rights in the conduct of the Research Plan that, to its knowledge, is encumbered by any Third Party restriction or any Third Party right or obligation that would conflict or interfere with any of the rights or licenses granted to, or to be granted to, the other Party hereunder. As part of any modification or expansion of any Research Plan by the JSC, the JSC members of each Party shall inform the JSC members of the other Party of any potential Third Party Patents or proprietary Know-How that may be required to perform the activities to be added to the Research Plan as a result of such modification or expansion, and the Parties shall discuss in good faith, and take into consideration and agree on a strategy on such Third Party Patents and/or proprietary Know-How in finalizing the modified or expanded Research Plan.

Warranty Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS ARTICLE 9, NEITHER PARTY MAKES ANY WARRANTY WITH RESPECT TO ANY PATENTS, KNOW-HOW, LICENSES, TECHNOLOGY, TARGETS, GOODS, SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT WITH RESPECT TO ANY AND ALL OF THE FOREGOING.

Term and Expiration. The term of this Agreement (the “Term”) shall commence on the Effective Date and, unless terminated earlier pursuant to this Article 10, shall expire on a Licensed Product-by-Licensed Product and country-by-country basis upon the expiration of all payment obligations under Article 6, after which the licenses granted by FivePrime to GSK in Article 4 with respect to such Licensed Product in such country shall become fully paid-up, perpetual and non-exclusive.

Termination at Will. GSK shall have the right, in its sole discretion, to terminate (a) this Agreement in its entirety, (b) a Research Program on a Research Indication-by-Research Indication basis, and/or (c) this Agreement on a Licensed Product-by-Licensed Product basis, in each case of (a) through (c) without cause at any time during the Term, by giving FivePrime *** days’ prior written notice; provided that, in the event GSK provides FivePrime with such written notice of termination for a Research Program with respect to a particular Research Indication while FivePrime is in the process of conducting a Screening Assay for such Research Indication, such termination shall not be effective until the later of (a) the completion of such Screening Assay; or (b) *** days after FivePrime receives such notification. Upon receipt of such notice of termination for any Research Program for any Research Indication, FivePrime shall use reasonable efforts to wind down the efforts expended by FivePrime on such Research Program for such Research Indication, and GSK shall remain responsible for all liabilities and obligations incurred or accrued as provided in Section 6.2 for a terminated Research Program with respect to a particular Research Indication prior to the effective date of such termination.

Termination for Cause. In addition to any other remedies conferred by this Agreement or by law, either Party may terminate this Agreement in its entirety, or terminate on a Target-by-Target or Research Indication-by-Research Indication basis (at the terminating Party’s election), at any time during the Term: (a) upon written notice by either Party if the other Party is in breach of its material obligations hereunder and has not cured such breach within ***days after such notice for any payment breach, or, as the case may be, *** days after such notice for any breach other than a payment breach, or if such other breach is of the nature that cannot reasonably be cured within *** days, within such reasonable period thereafter as agreed by the Parties; provided however, in the event of a good faith dispute with respect to the existence of a material breach, the *** day or *** day cure period, as applicable, shall be tolled until such time as the dispute is resolved pursuant to Section 12.6 hereof. If such alleged breach is contested in good faith by the breaching Party in writing within the applicable cure period, then the dispute resolution procedure pursuant to Section 12.6 may be initiated by either Party to determine whether a material breach has actually occurred. If such breach is confirmed in accordance with the procedure set forth in Section 12.6 and not cured within *** days after the receipt of a decision by the arbitrators confirming such breach, the non-breaching Party shall have the right, on written notice to the breaching Party, to terminate this Agreement effective immediately.

Termination 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 or country, a petition in bankruptcy or insolvency or for reorganization or for an arrangement or for the appointment of a receiver or trustee of the Party or of substantially all of its assets, or if the other Party proposes a written agreement of composition or extension of substantially all 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 within *** calendar days after the filing thereof, or if the other Party shall propose or be a party to any dissolution or liquidation, or if the other Party shall make an assignment of substantially all of its assets for the benefit of creditors. All rights and licenses granted under or pursuant to any section of this Agreement are and shall otherwise be deemed to be for purposes of Section 365(n) of Title 11, United States Code (the “Bankruptcy Code”) licenses of rights to “intellectual property” as defined in Section 101(56) of the Bankruptcy Code. The Parties shall retain and may fully exercise all of their respective rights and elections under the Bankruptcy Code. Upon the bankruptcy of any Party, the non-bankrupt Party shall further be entitled to a complete duplicate of, or complete access to, any such intellectual property, and such, if not already in its possession, shall be promptly delivered to the non-bankrupt Party, unless the bankrupt Party elects to continue, and continues, to perform all of its obligations under this Agreement.

Consequence of Termination.

In the event GSK terminates this Agreement under Section 10.2 at will or FivePrime terminates this Agreement under Section 10.3 for GSK’s uncured material breach (in the event the termination is only effective for a particular Licensed Product, Target or Research Indication, then the following shall apply solely with respect to such Licensed Product, Target or Research Indication, as the case may be):

Within *** days after the termination effective date, GSK shall pay all amounts payable to FivePrime hereunder that have accrued but have not been paid as of the effective date of termination with respect to each Terminated Target and Terminated Product, as applicable, and with respect to Quarterly Research Payments pursuant to Section 6.2, pro rated as of the effective date of termination.

If the Agreement is terminated for a particular Research Indication, then all Hits, Offered Hits and Claimed Targets with respect to such Research Indication shall be deemed Reverted Targets under this Agreement. Without limiting the foregoing, FivePrime shall have the right to, in its sole discretion, research, develop and commercialize all

such Reverted Targets and any Compounds and/or Biologics with respect thereto, either by itself or with any Third Party, without regard to Section 4.4. Further, GSK shall have rights to such Reverted Targets and any Compounds and/or Biologics with respect thereto as set forth in Sections 4.4 and 4.5.

If the Agreement is terminated for a particular Research Indication, then all Committed Lead Targets with respect to such Research Indication shall be deemed Terminated Targets. GSK shall have no further rights to such Terminated Targets, and FivePrime shall have the rights to, in its sole discretion, research, develop and commercialize all such Terminated Targets and any Compounds and/or Biologics with respect thereto, either by itself or with any Third Party, without regard to Section 4.4.

GSK hereby grants to FivePrime, and FivePrime accepts an exclusive (except as set forth below) license and/or sublicense, as applicable, with the right to grant sublicenses (with the right to further sublicense), under the GSK Evaluation Patents, GSK Evaluation Know-How, GSK Licensed Product Patent Rights and GSK Licensed Product Know-How (including GSK’s interest in Joint Patent Rights and Joint Know-How, in each case solely to the extent pertaining to the Terminated Target), to develop, use, make (subject to Sections 10.5.1 (e) and (h)), have made (subject to Sections 10.5.1(e) and (h)), offer to sell, sell, import or otherwise commercialize products that comprises: (i) a Terminated Target or a fragment or derivative thereof; (ii) a sequence variant of a Terminated Target, or a fragment or derivative of such sequence variant; (iii) a compound, protein, antibody or peptide in any form that inhibits, activates or otherwise modulates the activity of a Terminated Target or its sequence variant, fragment and/or derivative; or (iv) a nucleic acid-containing molecule comprising a nucleotide sequence that encodes any of the molecules described in (i)-(iii) above. To the extent the GSK Licensed Product Know-How relates to the manufacture of any of the foregoing, the license granted herein to such GSK Licensed Product Know-How shall be non-exclusive. To the extent that there are inventions that are not claimed in a Patent at the time of termination and that GSK determines, in its sole discretion, not to protect as a trade secret or Know-How and that are directed to the Terminated Product, GSK will file or allow FivePrime to file a Patent directed to such inventions at FivePrime’s sole expense. GSK will, at the request of FivePrime, reasonably cooperate to execute and cause its Affiliates to execute all documents necessary for the FivePrime to file such Patent.

In the event that FivePrime develops and commercializes a product with respect to a Terminated Target and such product comprises a Biologic or Compound first developed or Controlled by GSK for which GSK has transferred GSK Evaluation Know-How or GSK Licensed Product Know-How to FivePrime pursuant to Section 10.5.1(f) (a “Terminated Product”), then FivePrime shall pay to GSK a royalty on the Net Sales (as such term is applied to FivePrime mutatis mutandis) of such Terminated Product at the following rates:

Baseline Terminated Product Royalty Rates:

Completion of Phase 1 Clinical Trial

***%

Completion of Phase 2 Clinical Trial

***%

Completion of Phase 3 Clinical Trial

***%

Patent Royalty Addition. At any time when the ***, a particular Terminated Product in a particular country is claimed by a Valid Claim in the GSK Evaluation Patents or GSK Licensed Product Patents in such country, FivePrime shall pay to GSK royalties on the Net Sales of such Terminated Product in such country at the rates set forth in Section 6.4.1 in addition to the baseline rates set forth in subsection (i) above.

Offsets. FivePrime’s royalty payment obligation to GSK shall be subject to the application of the provisions of Section 6.4 (including the royalty term, offsets and know-how royalty stepdown) mutatis mutandis to such payment obligation of FivePrime.

Royalty Reduction. In the event that FivePrime terminates this Agreement under Section 10.3 for GSK’s uncured material breach, FivePrime’s royalty payment obligation to GSK under Section 10.5.1(e)(i) above shall be reduced by *** percent (***%).

GSK shall, as soon as reasonably practical and to the extent GSK is legally or contractually permitted to do so, transfer to FivePrime all GSK Evaluation Know-How and GSK Licensed Product Know-How with respect to such Terminated Target, including any and all stocks of Licensed Product (at FivePrime’s expense equal to GSK’s fully burdened manufacturing costs for such Licensed Product), clinical data and reports, INDs, NDAs, BLAs, manufacturing protocols (subject to Section 10.5.1(h)), PK, PD, ADME, and toxicology data, quality assurance and quality control assays, contracts with contract research or manufacturing organizations, materials, assays, methods, data and results generated by GSK in connection with GSK’s development, manufacture and/or commercialization of such Terminated Target or Licensed Product(s), as applicable.

No later than *** days after the effective date of any termination of this Agreement, each Party shall return or cause to be returned to the other Party (or, at such other Party’s request, destroy) all Information received from the other Party and all copies thereof that are in such Party’s possession, as well as all biological or chemical materials delivered or provided by the other Party; provided, however, that each Party may retain one copy of Information received from the other Party in its confidential files for record purposes and FivePrime may keep and use any and all Know-How and all research reagents received from GSK with respect to Reverted Targets or Terminated Targets. To the extent a Party has a continuing license after the termination of this Agreement, such Party may retain the Information received from the other Party that is necessary for the practice of such license and use such Information solely for the practice of such continuing license.

To the extent GSK has incorporated any bona fide trade secret Controlled by GSK or its Affiliates in the manufacturing process of a particular Terminated Product and GSK desires not to transfer such trade secret to FivePrime for the manufacturing of such Terminated Product by FivePrime or FivePrime’s Third Party contract manufacturer, then GSK shall have the option to manufacture such Terminated Product and supply such Terminated Product to FivePrime at GSK’s fully burdened manufacturing costs plus *** percent (***%) in sufficient quantities to meet FivePrime’s forecasted needs for clinical and commercial supply of such Terminated Product, and the Parties shall negotiate in good faith and agree upon the terms and conditions governing such supply.

In the event that GSK terminates this Agreement under Section 10.3 for FivePrime’s uncured material breach, GSK’s license according to Section 4.1 shall remain in full force and effect on its own terms, provided that GSK fulfills its payment obligations and other obligations under Article 6. In the event GSK terminates this Agreement for a particular Research Indication (or a particular Committed Lead Target) for FivePrime’s uncured material breach of its obligations under Section 4.4.2, 4.4.3, 4.4.5(a), 4.4.5(b) or 4.4.5(d)(ii)(2) with respect to such Research Indication (or such Committed Target), GSK’s obligations to pay royalties to FivePrime under Section 6.4 for Licensed Products with respect to any Committed Lead Targets selected by GSK for such Research Indication (or for Licensed Products with respect to such Committed Lead Target, as applicable), and milestones pursuant to Section 6.3, shall be reduced by *** percent (***%).

Effect of Expiration or Termination Generally; Survival. Expiration or termination of this Agreement shall not relieve the Parties of any obligation accruing prior to such expiration or termination. Any expiration or termination of this Agreement shall be without prejudice to the rights of either Party against the other accrued or accruing under this Agreement prior to expiration or termination, including without limitation the obligation to pay royalties for Licensed Product(s) sold prior to such expiration or termination. Termination of this Agreement is without prejudice to any of the other rights and remedies conferred on the non-breaching Party by this Agreement or under law or equity, including without limitation, with respect to payment of any amounts by the non-breaching Party to the breaching Party after termination by the non-breaching Party pursuant to this Article 10. The provisions set forth in Articles 1, 11 and 12, and Sections 3.3.2(f)(1) (with respect to GSK’s audit rights only), 3.5.7(c), (d), (f), (g) and (h), 4.1.4, 4.2.2, 4.2.3, 4.3, 4.4.1, 4.4.2, 4.4.3(c), (d) and (e), 4.4.4(c) and the last paragraph after (c), 4.4.5(d)(ii)(3), 4.5, 5.3, 6.7, 7.1, 7.2, 7.3, 7.4, 7.5, 8.1, 8.2.1(c)(ii) and (iii), 8.2.1(d), 8.2.2, 8.2.3, 8.3, 9.5, 10.4, 10.5, and 10.6 shall survive any expiration or termination of this Agreement for the time periods set forth therein and if no time period is specified, then indefinitely.

Indemnification by FivePrime. FivePrime shall indemnify, defend and hold GSK, its Affiliates and their respective agents, employees, officers, directors and stockholders (each a “GSK Indemnitee”) harmless from and against any and all Third Party claims, suits, actions, demands, liabilities, expenses and/or loss, including reasonable legal expense and attorneys’ fees (collectively, “GSK Losses”), to which any GSK Indemnitee may become subject as a result of any claim, demand, action or other proceeding by any person or entity other

than a Party or its Affiliates or sublicensees to the extent such GSK Losses arise out of: (a) FivePrime’s, its Affiliates’, sublicensees’, or subcontractors’ performance of FivePrime’s obligations under this Agreement (except to the extent directed by GSK or the JSC); (b) the material breach by FivePrime, its Affiliates, its sublicensees or subcontractors of any covenant, representation or warranty or other agreement made by FivePrime in this Agreement; or (c) the negligence or willful misconduct of FivePrime or its Affiliates; except, in each case, to the extent such GSK Losses result from: (i) the material breach by GSK, its Affiliates, sublicensees, subcontractors or distributors of any covenant, representation, warranty or other agreement made by GSK in this Agreement; or (ii) the negligence or willful misconduct of any GSK Indemnitee.

Indemnification by GSK. GSK shall indemnify, defend, and hold FivePrime, its Affiliates and their respective agents, employees, officers, directors and stockholders (each a “FivePrime Indemnitee”) harmless from and against any and all Third Party claims, suits, actions, demands, liabilities, expenses, and/or loss, including reasonable legal expense and attorneys’ fees (collectively, “FivePrime Losses”) to which any FivePrime Indemnitee may become subject as a result of any claim, demand, action, or other proceeding by any person or entity other than a Party or its Affiliates to the extent such FivePrime Losses arise directly or indirectly out of: (i) GSK’s, its Affiliates’, sublicensees’, or subcontractors’ performance of GSK’s obligations under this Agreement; (ii) the practice by GSK, its sublicensees, or its Affiliates of any license or sublicense granted to GSK hereunder, through the manufacture, use, sale, offer for sale or importation of a Target or Licensed Product or otherwise; (iii) the manufacture, use, handling, storage, importation, exportation, sale, or other disposition by GSK, its Affiliates, sublicensees, subcontractors or distributors of Licensed Product(s); (iv) the use by a Third Party of any Licensed Product sold or otherwise provided by GSK, its Affiliates, sublicensees, subcontractors or distributors; (v) a material breach by GSK or its Affiliates of any covenant, representation, warranty or other agreement made by GSK in this Agreement; or (vi) the negligence or willful misconduct by GSK, its Affiliates, sublicensees, subcontractors or distributors; except, in each case, to the extent such FivePrime Losses result from: (i) the breach by FivePrime, its Affiliates, sublicensees or subcontractors of any covenant, representation, warranty or other agreement made by FivePrime in this Agreement, or (ii) the negligence or intentional misconduct of any FivePrime Indemnitee.

Notice of Indemnification Obligation and Defense. Any Party entitled to indemnification under Section 11.1 or 11.2 shall give notice to the indemnifying Party of any Losses that may be subject to indemnification, promptly after learning of such Losses, but the omission to so notify the

indemnifying Party promptly shall not relieve the indemnifying Party from any liability under Section 11.1 or 11.2 except to the extent that the indemnifying Party shall have been actually prejudiced as a result of the failure or delay in providing such notice. The indemnifying Party shall assume the defense of such Losses with counsel reasonably satisfactory to the indemnified Party. If such defense is assumed by the indemnifying Party, the indemnifying Party shall not be subject to any liability for any settlement of such Losses made by the indemnified Party without its consent (but such consent shall not be unreasonably withheld or delayed), and shall not be obligated to pay the fees and expenses of any separate counsel retained by the indemnified Party with respect to such Losses. The indemnified Party shall provide the indemnifying Party with all information in its possession and all assistance reasonably necessary to enable the indemnifying Party to carry on the defense of any such Losses. Neither Party shall settle any claim, suit, action, or demand without the prior written consent of the other party, unless such settlement does not (a) result in the admission of any liability or fault of the other party, (b) result in any payment by the other party, (c) or otherwise bind the other party to take any actions or refrain from taking any actions.

LIMITATION OF LIABILITY. EXCEPT FOR: (1) A CLAIM SUBJECT TO EITHER PARTY’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 11.1 OR 11.2, OR (2) EITHER PARTY’S RIGHT TO RECOVER ALL DAMAGES (EXCLUDING EXEMPLARY DAMAGES) ARISING FROM THE OTHER PARTY’S BREACH OF THE NEGATIVE COVENANT UNDER SECTION 4.4 OR CONFIDENTIALITY OBLIGATIONS SET FORTH IN ARTICLE 7, NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY FOR SPECIAL, INDIRECT, INCIDENTAL OR EXEMPLARY DAMAGES TO THE OTHER PARTY ARISING OUT OF THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, INCLUDING WITHOUT LIMITATION, LOST PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES.

Force Majeure. Neither Party shall be held liable to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in performing any obligation under this Agreement to the extent such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party, potentially including, but not limited to, embargoes, war, acts of war (whether war be declared or not), acts of terrorism, insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, fire, floods, earthquake, or other acts of God, or acts, omissions or delays in acting by any

governmental authority or the other Party. The affected Party shall notify the other Party of such Force Majeure circumstances as soon as reasonably practical, and shall promptly undertake all reasonable efforts necessary to cure such Force Majeure circumstances.

Assignment; Change of Control.

Except as provided in this Section 12.2, this Agreement may not be assigned or otherwise transferred, nor may any right or obligation hereunder be assigned or transferred, by either Party without the written consent of the other Party.

Each Party may, without the written consent of but upon written notice to the other Party, assign this Agreement and its rights and obligations hereunder in whole or in part (a) to a Party’s Affiliate capable of performing its obligations hereunder, or (b) to a successor-in-interest as a result of a merger or acquisition of a Party, or in connection with the sale of all of substantially all of the assets or stock of such Party to which this Agreement pertains. Any attempted assignment not in accordance with this Section 12.2 shall be void.

If, during the Term, FivePrime is acquired by, or merges with, a Third Party that is, at the time of the consummation of such acquisition or merger, a top *** pharmaceutical company (as measured by annual revenue) that is a direct competitor of GSK (such acquiror or merger partner, an “Acquiror”, and such event, a “Change of Control”), then: (a) in the event such Change of Control occurs during the Research Program Term, the Parties shall complete the Research Program as described in this Agreement and FivePrime shall establish appropriate firewalls to prohibit the sharing of any FivePrime Collaboration Know-How (including the nature and scope of any Research Program conducted by FivePrime under this Agreement), with any other individual within the Acquiror that is involved in any manner in a research or development program that is directly competitive to the Research Program hereunder; and (b) in the event GSK has already exercised its Selection Option with respect to any Target, the Agreement shall remain effective on its original terms with respect to such Committed Lead Target, except for the following: (i) GSK’s reporting obligations under Section 5.2 shall be reduced, such that GSK’s sole reporting obligation shall be to state the level of staffing and resources committed by GSK for such Committed Lead Target and/or Licensed Products during the Calendar Quarter for which such report applies and to confirm that GSK has used Commercially Reasonable Efforts during the Calendar Quarter as required pursuant to this Agreement; and (ii) in the event FivePrime

exercises its audit rights under Section 6.7, the accounting firm engaged by FivePrime shall only disclose to FivePrime whether the royalty reports are correct or incorrect and the amount of any discrepancy.

Severability. If any one or more of the provisions contained in this Agreement is held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, unless the absence of the invalidated provision(s) adversely affects the substantive rights of the Parties. The Parties shall in such an instance cooperate to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) which, insofar as practical, implement the purposes of this Agreement.

Notices. All notices which are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier), sent by nationally-recognized overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

FIVE PRIME THERAPEUTICS, INC.

1650 Owens Street, Suite 200

San Francisco, CA 94158

Attention: President & CEO

Facsimile No.: 415 ###-###-####

FIVE PRIME THERAPEUTICS, INC.

1650 Owens Street, Suite 200

San Francisco, CA 94158

Attention: Legal Department

Facsimile No.: 415 ###-###-####

GLAXOSMITHKLINE

709 Swedeland Road

King of Prussia, PA ###-###-####

Facsimile: (610) 270-5880

Attention: Senior Vice President, Worldwide Bussiness

Development

GLAXOSMITHKLINE

2301 Renaissance Boulevard

King of Prussia, PA ###-###-####

Facsimile: (610) 787-7084

Attention: Vice President and Associate General

Counsel, Business Development Transactions

Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware (and the patent laws of the United States) without reference to any rules of conflict of laws.

Dispute Resolution. [Subject to litigation counsel review.]

Referral to Executive Officers. With respect to any disputes that are not within the authority of the JSC, in the event of a dispute arising under this Agreement between the Parties, either Party shall have the right to refer such dispute to the *** or other senior management (or their respective designee who are members of senior management with the power and authority to resolve such dispute), and such senior management members shall attempt in good faith to resolve such dispute. If the Parties are unable to resolve a given dispute pursuant to this Section 12.6.1 within *** days of referring such dispute to the executive officers, either Party may refer the dispute for mediation pursuant to Section 12.6.2 below.

Mediation. If either Party refers a dispute to mediation pursuant to Section 12.6.1 above, the Parties will endeavor to settle the dispute by mediation under the International Institute for Conflict Prevention and Resolution (“CPR”) Mediation Procedure then currently in effect. If one Party fails to participate in the negotiation as provided in Section 12.6.1 above, the other Party can initiate mediation prior to the expiration of the *** day period referenced in Section 12.6.1. Unless otherwise agreed, the Parties will attempt to select a mediator from the CPR Panels of Distinguished Neutrals. If the Parties cannot agree on a mediator, they will defer to the CPR, which shall select a mediator for them. The cost of the mediator shall be divided equally between the Parties. If the Parties cannot reach agreement within

*** days after the appointment of a mediator, either Party may demand by providing written notice to the other that the matter be resolved by binding arbitration as set forth in Section 12.6.3 below (the “Arbitration Demand”).

Arbitration. From the date of the Arbitration Demand and until such time as the dispute has become finally settled, the running of the time periods as to which Party must cure a breach of this Agreement shall become suspended as to any breach that is the subject matter of the dispute. Within *** Business Days after the receipt of the Arbitration Demand, the other Party may, by written notice, add additional issues for resolution. The arbitration will be conducted in accordance with the CPR Rules for Non-Administered Arbitration then currently in effect, by a panel of three (3) arbitrators. Each Party shall have the right to appoint one (1) such arbitrator in accordance with the ‘screened’ appointment procedure provided in Rule 5.4, and the Parties shall attempt to agree on the third (3^rd) arbitrator. If the Parties cannot agree on the third (3^rd) arbitrator within *** days of the Arbitration Demand, then the third (3^rd) arbitrator shall be selected by the first two (2) arbitrators. If one Party fails to participate in the mediation as set forth in Section 12.6.2, the other Party can commence arbitration prior to the expiration of the time period set forth in Section 12.6.2 above. The arbitration will be governed by the Federal Arbitration Act, 9 U.S.C. §§1 et seq., any award of the arbitrators will be final and binding upon the Parties and judgment upon the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof. The place of arbitration will be (a) *** or (b) *** The costs of all three arbitrators shall be divided equally between the Parties. Discovery shall be allowed, provided it is consistent with the CPR Rules for Non-Administered Arbitration. Such discovery shall be subject to all applicable privileges and other immunities and shall be admitted within the limitations and according to the IBA Rules on Taking Evidence in International Commercial Arbitration as adopted by a resolution of the IBA Council 1 June 1999 (the “IBA Rules”). The Parties agree that there shall be no more than *** depositions per Party for each arbitration proceeding, unless the arbitrators decide otherwise. The arbitral tribunal shall, in consultation with the Parties and in timely fashion, consider the requests for depositions and interrogatories, and any objections thereto, in accordance with the standards set forth in Article 3.6 of the IBA Rules.

Notwithstanding anything in this Article 12 to the contrary, each Party will have the right to apply to any court of competent jurisdiction for injunctive relief, as necessary to protect the rights or property of that Party or for enforcement of any arbitration award. The prevailing Party shall be entitled

to recover from the other all costs, including attorney’s fees, related to the action for injunctive relief. All proceedings and decisions of the arbitrators shall be deemed Confidential Information of each of the Parties, and shall be subject to Article 7.

Entire Agreement; Amendments. This Agreement, together with the Exhibits hereto, constitutes the entire understanding of the Parties with respect to the subject matter hereof and supersedes and cancels all previous express or implied agreements (including the certain confidentiality agreements between the Parties and its Affiliates effective as of May 27, 2009 and March 9, 2010 (the “Pre-Existing NDAs”) and understandings, negotiations, writings and commitments, either oral or written, in respect to the subject matter hereof. For clarity, all information for which either Party had non-disclosure and non-use obligations pursuant to the Pre-Existing NDAs shall be considered Confidential Information under this Agreement and such obligated Party shall be considered the Receiving Party under this Agreement with respect to such Confidential Information, and any inventions (if any) made by the Parties in the course of evaluating and/or discussing the collaboration hereunder prior to the Effective Date (including in the course of generating the Initial Research Plan) shall be deemed inventions arising from the conduct of the Research Program. The Exhibits to this Agreement are incorporated herein by reference and shall be deemed a part of this Agreement. This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by authorized representatives of both Parties hereto.

Headings. The captions to the several Articles, Sections and subsections hereof are not a part of this Agreement, but are merely for convenience to assist in locating and reading the several Articles and Sections hereof.

Independent Contractors. It is expressly agreed that FivePrime and GSK shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture or agency. Neither FivePrime nor GSK shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior written consent of the other Party.

Performance by Affiliates. Each Party may discharge any obligations and exercise any right hereunder through any of its Affiliates. Each Party hereby guarantees the performance by its Affiliates of such Party’s obligations under this Agreement, and shall cause its Affiliates to comply with the provisions of this Agreement in connection with such performance. Any breach by a Party’s Affiliate of any of such Party’s obligations under this Agreement shall be deemed a breach by such Party, and the other Party may proceed directly against such Party without any obligation to first proceed against such Party’s Affiliate.

Further Actions. Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

Severability. If any one or more of the provisions of this Agreement is held to be invalid or unenforceable by any court of competent jurisdiction from which no appeal can be or is taken, the provision shall be considered severed from this Agreement and shall not serve to invalidate any remaining provisions hereof. The Parties shall make a good faith effort to replace any invalid or unenforceable provision with a valid and enforceable one such that the objectives contemplated by the Parties when entering this Agreement may be realized.

Waiver. The waiver by either Party hereto of any right hereunder, or of any failure of the other Party to perform, or of any breach by the other Party, shall not be deemed a waiver of any other right hereunder or of any other breach by or failure of such other Party whether of a similar nature or otherwise.

Cumulative Remedies. Unless as specified, no remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.

Waiver of Rule of Construction. Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply.

Certain Conventions. Any reference in this Agreement to an Article, Section, subsection, paragraph, clause or Exhibit shall be deemed to be a reference to an Article, Section, subsection, paragraph, clause or Exhibit, of or to, as the case may be, this Agreement, unless otherwise indicated. Unless the context of this Agreement otherwise requires, (a) words of any gender include each other gender, (b) words such as “herein”, “hereof”, and “hereunder” refer to this Agreement as a whole and not merely to the particular provision in which such words appear, (c) words using the singular shall include the plural, and vice versa, (d) references to “day” shall mean calendar days, and (e) the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “but not limited to,” “without limitation,” “inter alia” or words of similar import.

Counterparts. This Agreement may be executed in one (1) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

No Third Party Beneficiaries. It is acknowledged and agreed that no provision of this Agreement shall be for the benefit of, or shall be enforceable by any Third Party, including without limitation, any creditor of either Party.

/s/ Justin Huang

/s/ Julia P. Gregory

Name: Justin Huang

Title: Assistant Secretary

Name: Julia P. Gregory

Title: President and Chief Executive Officer

AGREEMENT TO SELL AND PURCHASE.

CLOSING, DELIVERY AND PAYMENT.

REPRESENTATIONS AND WARRANTIES OF THE COMPANY.