Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Double asterisks denote omissions.

Exhibit 10.2

1.

DEFINITIONS AND INTERPRETATION

1.1

Definitions.  Unless the context otherwise requires, the terms in this Agreement with initial letters capitalized, will have the meanings set forth below, or the meaning as designated in the indicated places throughout this Agreement.

(i)

License Agreement, by and between AVEO and St. Vincent’s Hospital Sydney Limited (“SVH”), dated as of July 2, 2012, as amended as of the Effective Date, a copy of which is set forth on Schedule 1 (the “St. Vincent’s Agreement”);

(ii)

Research and Commercialisation License Agreement, by and between AVEO and Evogenix Pty Limited, dated September 25, 2007, as amended by First Amendment to the Research & Commercialisation Agreement, dated September 26, 2012, and as amended by Second Amendment to the Research and Commercialisation Agreement dated September 26, 2013, a copy of which is set forth on Schedule 2; and

(iii)

the Commercial License Agreement, effective July 17, 2014, by and between AVEO and Selexis SA, a copy of which is set forth on Schedule 3.

(i)

normal trade and cash discounts;

(ii)

amounts repaid or credited by reasons of defects, rejections, recalls or returns;

(iii)

rebates and chargebacks to customers and third parties (including, without limitation, Medicare, Medicaid, Managed Healthcare and similar types of rebates);

(iv)

any amounts recorded in gross revenue associated with goods provided to customers for free;

(v)

amounts provided or credited to customers through coupons and other discount programs;

(vi)

delayed ship order credits, discounts or payments related to the impact of price increases between purchase and shipping dates or retroactive price reductions; and 

(vii)

fee for service payments to customers for any non-separable services (including compensation for maintaining agreed inventory levels and providing information); and

(viii)

other reductions or specifically identifiable amounts deducted for reasons similar to those listed above, in accordance with the Accounting Standards.

(i)

Net Sales only include the value charged or invoiced on the first arm’s length sale to a Third Party, and sales between or among Novartis and its Affiliates and sublicensees will be disregarded for purposes of calculating Net Sales;

(ii)

If a Product is delivered to the Third Party before being invoiced (or is not invoiced), Net Sales will be calculated at the time all the revenue recognition criteria under Accounting Standards are met;

(iii)

In the event that the Product is sold in a finished dosage form containing the AVEO Antibodies in combination with one or more other active ingredients (a “Combination Product”), the Net Sales will be calculated by multiplying the Net Sales of the Combination Product by the fraction, A/(A+B) where A is the weighted (by sales volume) average sale price in the relevant country of the Product containing the AVEO Antibodies as the sole active ingredient in finished form, and B is the weighted average sale price (by sales volume) in that country of the product(s) containing the other component(s) as the sole active ingredient(s) in finished form. Regarding prices comprised in the weighted average price when sold separately referred to above, if these are available for different dosages from the dosages of AVEO Antibodies and other active ingredient components that are included in the Combination Product, then Novartis will be entitled to make a proportional adjustment to such prices in calculating the royalty-bearing Net Sales of the Combination Product. If the weighted average sale price cannot be determined for the Product or other product(s) containing the single AVEO Antibodies or component(s), the calculation of Net Sales for Combination Products will be agreed by the Parties based on the relative value contributed by each component (each Party’s agreement not to be unreasonably withheld or delayed).

1.2

Interpretation.  In this agreement unless otherwise specified:

(a)

“includes” and “including” will mean respectively includes and including without limitation;

(b)

a Party includes its permitted assignees and/or the respective successors in title to substantially the whole of its undertaking;

(c)

a statute or statutory instrument or any of their provisions is to be construed as a reference to that statute or statutory instrument or such provision as the same may have been or may from time to time hereafter be amended or re-enacted;

(d)

words denoting the singular will include the plural and vice versa and words denoting any gender will include all genders;

(e)

the Exhibits and other attachments form part of the operative provision of this Agreement and references to this Agreement shall, unless the context otherwise requires, include references to the Exhibits and attachments;

(f)

the headings in this Agreement are for information only and will not be considered in the interpretation of this Agreement;

(g)

general words will not be given a restrictive interpretation by reason of their being preceded or followed by words indicating a particular class of acts, matters or things; and

(h)

the terms and conditions of this Agreement are the result of negotiations between the Parties and that this Agreement will not be construed in favor of or against any Party by reason of the extent to which any Party participated in the preparation of this Agreement. 

2.

LICENSE

2.1

License Grant.  Subject to the terms and conditions of this Agreement, AVEO hereby grants to Novartis an exclusive (even as to AVEO and its Affiliates), sub-licensable (pursuant to Section 2.2) license or sublicense, as applicable, under AVEO’s interest in the AVEO Technology to research, Develop, make, have made, use, import, offer for sale, sell, have sold and otherwise Commercialize the AVEO Antibodies and Product in the Field worldwide.  For the avoidance of doubt, the foregoing license is exclusive to Novartis and AVEO has no retained rights (and will not attempt to license any rights, directly or indirectly, to any Third Party) with respect to the AVEO Antibodies and Products in the Field or with respect to the AVEO Patents or AVEO Know-How in the Field, except for the activities undertaken pursuant to the terms of this Agreement; provided, however, that Novartis acknowledges that AVEO’s licensors under the In-licensed AVEO Technology Agreements retain certain rights to AVEO Technology as provided in the applicable In-licensed AVEO Technology Agreement.  

2.2

Sublicense Rights.  Novartis may sublicense the rights granted to it by AVEO under this Agreement at any time at its sole discretion, but subject to the applicable terms of this Agreement. Novartis may exercise its rights and perform its rights and obligations under this Agreement itself or through any of its Affiliates.  In addition, Novartis may subcontract to Third Parties the performance of tasks and obligations with respect to the Development and Commercialization of the Product as Novartis deems appropriate, subject to the applicable terms and conditions of this Agreement.  Novartis shall provide AVEO with a copy of any sublicense agreement it enters with respect to the AVEO Technology within [**] days after the execution thereof.  Each sublicense of the AVEO Technology shall be consistent with the terms and conditions of this Agreement and, if applicable, the In-licensed AVEO Technology Agreements, and Novartis shall guarantee the performance of its Affiliates and permitted sublicensees with respect to any sublicense granted pursuant to this Section 2.2.  Upon the termination of this Agreement by AVEO pursuant to Section 11.2 or Section 11.3 or by Novartis pursuant to Section 11.2 or 11.5, any sublicense granted by Novartis under the AVEO Technology will terminate upon the effective date of termination of this Agreement.

2.3

Non-compete.

(a)

During the term of this Agreement and subject to Section 16.1(b), neither AVEO nor any of its Affiliates, will, anywhere in the world, directly or indirectly, Develop, manufacture or Commercialize any Competing Product in the Field (or license or collaborate with a Third Party to do any of the foregoing); provided, however, the foregoing covenant will under no circumstances restrict any activity required to be performed by AVEO or any of its Affiliates pursuant to the terms of an In-licensed AVEO Technology Agreement.

(b)

In the event AVEO or any its Affiliates acquires control (as “control” is defined in the definition of Affiliate) of any Third Party, the activities of such Third Party shall not constitute a breach of this Agreement; provided that (i) no later than [**] months following consummation of the transaction in which AVEO or its Affiliate acquires control of such Third Party, AVEO or its Affiliate takes appropriate action, through divestiture of assets or otherwise, to cause such Party to come into compliance with Section 2.3(a), (ii) during such [**] month period, AVEO or its Affiliate keeps such acquired Third Party’s activities with respect to the Competing Product separate from the Development and Commercialization of AVEO Antibodies and Products, and (iii) no Information of Novartis is utilized in such activities. 

(c)

In the event that AVEO undergoes a Change of Control, then the research, development, manufacture or commercialization of a Competing Product in the Field that, as of the date of such Change of Control, is being researched, developed, manufactured or commercialized by the assignee or acquirer of AVEO, or any Person which, immediately prior to such Change of Control, is an Affiliate of such assignee or acquirer, shall not constitute a breach of Section 2.3(a); provided that (i) such assignee or acquirer or Affiliate keeps such research, development, manufacturing or commercialization for a Competing Product separate from the Development and Commercialization of AVEO Antibodies and Products, and (ii) no Information of Novartis is utilized in such program.  

2.4

In-licensed AVEO Technology.  

(a)

Novartis acknowledges that the In-licensed AVEO Technology has been licensed to AVEO by Third Parties pursuant to various In-licensed AVEO Technology Agreements and is sublicensed to Novartis pursuant to, and subject to the terms and conditions of, this Agreement and the applicable In-licensed AVEO Technology Agreement.  Novartis will comply with, and will cause its Affiliates and sublicensees to comply with, all obligations of a sublicensee of the AVEO Technology under the applicable In-licensed AVEO Technology Agreement during the term of such In-licensed AVEO Technology Agreement, including without limitation the provisions of In-licensed AVEO Technology Agreements and further including without limitation the provisions of Section 3.7 of the St. Vincent’s Agreement.  If any conflict between Novartis’ obligations under this Agreement and an In-licensed AVEO Technology Agreement arises with respect to In-licensed AVEO Technology, Novartis will comply with the provisions of the In-licensed AVEO Technology Agreement.  For clarity, a breach by Novartis or any of its Affiliates or sublicensees of any applicable provision of an In-licensed AVEO Technology Agreement will be considered a material breach of this Agreement.

(b)

AVEO will maintain the In-licensed AVEO Technology Agreements in full force and effect and, unless Novartis’ has otherwise consented to such action in writing, (i) will not amend or modify any provision of any of the In-licensed AVEO Technology Agreements, (ii) will not waive any right

arising under any of the In-licensed AVEO Technology Agreements, and (iii) will not terminate or amend any of the In-licensed AVEO Technology Agreements (in whole or in part) in a manner that would affect Novartis’ sublicensed rights thereunder. 

(c)

AVEO will give Novartis prompt written notice (not more than [**] days after becoming aware of such matter) of (i) any material breach of or default of any of the In-licensed AVEO Technology Agreements by AVEO or the relevant Third Party; or (ii) any actual knowledge of circumstances that are reasonably likely to result in a material breach of or default of any In-licensed AVEO Technology Agreements by AVEO.  In the event of a material breach or receipt of written notice of an alleged material breach or default of the In-licensed AVEO Technology Agreements, which material breach remains uncured by AVEO for a period of [**] days and was not the result of an act or omission by Novartis or any of its Affiliates or sublicensees, AVEO will reasonably cooperate with Novartis with respect to efforts to remedy such actual or threatened material breach or default or to negotiate with the relevant Third Party to arrange for Novartis to assume all rights and obligations under the relevant agreement with respect to Licensed Products.

2.5

Rights in Bankruptcy. The Parties acknowledge that this Agreement constitutes an executory contract under Section 365 of the Code for the license of “intellectual property” as defined under Section 101 of the Code and constitutes a license of “intellectual property” for purposes of any similar laws in any other country.  The Parties further acknowledge that Novartis, as licensee of such rights under this Agreement, will retain and may fully exercise all of its protections, rights and elections under the Code, including, but not limited to, Section 365(n) of the Code, and any similar laws in any other country.  In the event of the commencement of a bankruptcy proceeding by or against AVEO under the Code and any similar laws in any other country, Novartis will be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property, and the same, if not already in its possession, will be promptly delivered to it (a) upon any such commencement of a bankruptcy proceeding upon its written request therefor, unless AVEO elects to continue to perform all of its obligations under this Agreement, or (b) if not delivered under (a) above, following the rejection of this Agreement by or on behalf of AVEO upon written request therefor by Novartis.  All rights, powers and remedies of Novartis provided for in this Section 2.5 are in addition to and not in substitution for any and all other rights, powers and remedies now or hereafter existing at law or in equity (including, without limitation, under the Code and any similar laws in any other country).

3.

GOVERNANCE

3.1

Alliance Managers.  Within [**] days following the Effective Date, each Party will appoint (and notify the other Party of the identity of) a senior representative having a general understanding of biopharmaceutical development and commercialization issues to act as its alliance manager under this Agreement (“Alliance Manager”).  The Alliance Managers will (a) serve as the contact point between the Parties for the purpose of providing AVEO with information on the progress of Novartis’ Development and Commercialization of the Product; (b) be primarily responsible for

facilitating the flow of information and otherwise promoting communication, coordination and collaboration between the Parties; (c) provide a single point of communication for seeking consensus both internally within the respective Party’s organization and facilitating review of external corporate communications; and (d) raise cross-Party and/or cross-functional disputes in a timely manner.  Each Party may replace its Alliance Manager on written notice to the other Party. 

3.2

Development Information.  Within [**] days of the Effective Date, Novartis will provide AVEO with a high level summary development plan setting forth the anticipated Development activities to be conducted by Novartis and its Affiliates and sublicensees related to AVEO Antibodies and Products during the following [**] month period (the “Development Plan”).  No later [**] days after each anniversary of the Effective Date, until the approval of the first BLA or MAA for a Product, Novartis will provide AVEO an updated Development Plan providing, in reasonable detail, the Development activities conducted by Novartis and its Affiliates and sublicensees related to AVEO Antibodies and Products during the immediately preceding year and its anticipated plans for Development of AVEO Antibodies and Products for next [**] month period.  Novartis may revise the Development Plan or any update thereto in its sole discretion, subject to satisfaction of its obligations under Section 5.2.

3.3

Meetings.  During the period from the Effective Date until the first BLA or MAA filing for the Product, the Alliance Managers will meet (either in person or by teleconference) at least [**],to review and discuss progress made under, and any changes to, the Development, Plan, including the Development work performed, clinical trials, Milestones, any key issues and the overall status of Development.  At least [**], senior representatives of each Party involved in the Development of the Product will attend such meeting; provided, that if AVEO intends to have any consultant attend such a meeting, such consultant will be subject to the prior approval of Novartis (such approval not to be unreasonably withheld or delayed) and bound by confidentiality obligations consistent with the terms of this Agreement.  Novartis will consider in good faith comments or proposals made by AVEO during such meetings; provided that Novartis will have sole control over all Development activities and full decision-making authority with respect to the Development of the Product, subject to satisfaction of its obligations under Section 5.2.

3.4

Commercialization Information.  Within [**] months after the first BLA or MAA filing for a Product, the Novartis Alliance Manager will provide the AVEO Alliance Manager with a high level written summary of the Commercialization strategy of Novartis with respect to such Product.  No later than [**] of each Calendar Year thereafter, Novartis will provide AVEO with a high level written summary of its then-current Commercialization strategy.

3.5

Change of Control.  In the event of a Change of Control of AVEO in which the successor entity is engaged in the research, development, manufacture or commercialization of a Competing Product in the Field, Novartis may provide written notice to AVEO (or its successor entity) terminating the provisions of Sections 3.3 and 3.4 and, upon such notice, Novartis will not be obligated under Section 3.3 or 3.4 for the remaining term of this Agreement.

4.

DISCLOSURE OF LICENSOR KNOW-HOW & COOPERATION 

4.1

Disclosure of AVEO Know-How.  Within [**] days after the Effective Date, AVEO, without additional consideration, will use Commercially Reasonable Efforts to disclose to Novartis or its designated Affiliate the AVEO Know-How in its possession as of the Effective Date, including AVEO Know-How pertaining to the formulation, manufacture and Development of the AVEO Antibodies and/or Product and any other pre-clinical, toxicology and other data available to AVEO that are reasonably relevant to the Development of the AVEO Antibodies and/or Product.  Without limiting the foregoing, AVEO will deliver to Novartis (or its designee) copies of all manufacturing batch records, Development reports, analytical results, filings and correspondence with any Regulatory Authority (including notes or minutes of any meetings with any Regulatory Authority), raw material and excipient sourcing information, quality audit findings and any other relevant technical information relating to the AVEO Antibodies and/or the Product.  Notwithstanding the foregoing, AVEO will have no obligation to disclose to Novartis any portion of AVEO Know-How consisting of Information pertaining to AVEO’s proprietary products other than the AVEO Antibodies and/or the Product.

4.2

Material Transfer.  Upon the written request of Novartis, which shall be delivered prior to the [**] day following the Effective Date, AVEO will provide to Novartis or its designated Affiliate all (and not, for clarity, a portion of the) AVEO Antibodies and/or Product in AVEO’s possession, for use by Novartis and its Affiliates in connection with Development and Commercialization activities under this Agreement.  Novartis will have no obligation to reimburse AVEO for the cost of manufacture of any research-grade material; delivery of quantities of AVEO Antibodies and/or Product manufactured in accordance with cGMP will be subject to the payment by Novartis of the amount set forth in Section 8.1(b).  All materials will be provided to Novartis or its designee, and title and risk of loss will pass, DDP Novartis’ facility in Cambridge, Massachusetts (Incoterms 2010).

4.3

Cooperation.  During the [**] day period immediately following the Effective Date, AVEO will use Commercially Reasonable Efforts to provide reasonable assistance, or cause its vendors to provide reasonable assistance, to Novartis or its designated Affiliate in connection with understanding and using the AVEO Know-How for purposes consistent with licenses and rights granted to Novartis hereunder, including by:

(a)

providing information to assist Novartis or its designated Affiliate in developing formulations of the Product and its related activities, facilitating introductions to its vendors and service providers, and directing its vendors and service providers to transfer any relevant Know-How specific to the Product that is in their control;

(b)

executing any required documents, providing access to personnel and providing Novartis with copies of all reasonably required documentation, and causing its vendors and service providers to transfer any Regulatory Filings that are in their control;

(c)

cooperating with and providing assistance to Novartis or its designee, through documentation, consultation, training and face-to-face meetings,

to familiarize the personnel of Novartis or its designee with AVEO Know-How specifically relating to the manufacture of the AVEO Antibodies and/or Products and the application of the same in order to facilitate the ability of Novartis or its designee to proceed with manufacturing of the AVEO Antibodies and/or Product; and 

(d)

providing such other mutually agreed-upon support activities to Novartis.

5.

DEVELOPMENT AND MANUFACTURING

5.1

Development.  Subject to Section 5.2, Novartis will be responsible for conducting, at its sole expense, such research and preclinical, clinical and other Development of the AVEO Antibodies and/or Product as it determines appropriate in its sole discretion.  

5.2

Development Diligence.  Novartis will itself, or through its Affiliates or sublicensees, use Commercially Reasonable Efforts to Develop at least one Product in the Field.  Subject to compliance with the foregoing, the Development of the Product will be in Novartis’ sole discretion.

5.3

Regulatory.  

(a)

Novartis will (i) determine the regulatory plans and strategies for the AVEO Antibodies and/or Product, (ii) (either itself or through its Affiliates or sublicensees) make all Regulatory Filings with respect to the Product, and (iii) be responsible for obtaining and maintaining Regulatory Approvals throughout the world in the name of Novartis or its Affiliates or sublicensees.  

(b)

Novartis will have the right to disclose the existence of, and the results from, any clinical trials conducted under this Agreement in accordance with its standard policies.

5.4

Manufacturing.  Novartis or its designated subcontractor(s) will be solely responsible for the manufacture and supply of the AVEO Antibodies and Products being Developed or Commercialized under this Agreement.

5.5

Compliance.  Novartis will, and will cause its Affiliates and sublicensees to, (a) comply with all applicable current international regulatory standards, including cGMP, cGLP, cGCP and other rules, regulations and requirements, and (b) not employ or use any person that has been debarred under Section 306(a) or 306(b) of the U.S. Federal Food, Drug and Cosmetic Act.  

6.

[RESERVED] 

7.

COMMERCIALIZATION

7.1

Commercialization.  Novartis will be solely responsible for all aspects of Commercialization of the Product, including planning and implementation, distribution, booking of sales, pricing and reimbursement.  Novartis will itself, or through its Affiliates or sublicensees, use Commercially Reasonable Efforts to Commercialize at least one Product in each of the Major Markets.  Notwithstanding the foregoing, Novartis’ application of Commercially Reasonable Efforts will not require Novartis to Commercialize a Product in any particular country or territory other than a Major Market if Novartis reasonably determines that it is not commercially reasonable to do so for such Product.  Subject to compliance with the foregoing, the Commercialization of the Product will be in Novartis’ sole discretion.

8.

FINANCIAL PROVISIONS

8.1

Upfront Payment; Reimbursement for Materials.  

(a)

In consideration of the licenses and rights granted to Novartis hereunder, Novartis will pay to AVEO a one-time, non-refundable, non-creditable upfront payment of fifteen million USD (US$15,000,000) within fifteen (15) days after receipt by Novartis of an Invoice for the same, which AVEO will issue on the Effective Date.

(b)

Novartis will reimburse AVEO for the actual amounts invoiced to AVEO by AbbVie Inc. associated with the manufacture of the AVEO Antibodies and Product that are supplied to Novartis pursuant to Section 4.2, without mark-up.  Such amount will not exceed three million four hundred fifty thousand USD (US$3,450,000).  Novartis will make this payment within [**] days after receipt by Novartis of an Invoice, which AVEO will issue upon delivery the relevant material, and which will include reasonable detail supporting the foregoing costs.  

8.2

Milestone Payments.  

(a)

In further consideration of the licenses and rights granted to Novartis hereunder, upon achievement of each of the following Milestones for a Product set forth below, the corresponding Milestone Payments will be payable by Novartis to AVEO:  

Milestone

Milestone Payment (USD)

Clinical Milestones

[**]

[**]

[**]

[**]

[**]

[**]

Regulatory Milestones

[**]

[**]

[**]

[**]

[**]

[**]

(b)

Each Milestone Payment will be deemed earned as of the first achievement of the corresponding Milestone, as determined by Novartis. Novartis will provide AVEO with written notice of the achievement of each Milestone within [**] days after such Milestone is determined to have been achieved and will make the corresponding Milestone Payment within [**] days after the date of receipt by Novartis of an Invoice for the indicated amount.  

(c)

Except for the [**] (which will be payable only once), each Milestone in the table above will be paid (i) 100% for the first Indication, and (ii) [**]% for the second Indication.  For the avoidance of doubt: (x) each Milestone Payment will be payable only on the first occurrence of the Milestone per Indication; (y) none of the Milestone Payments will be payable more than [**]% of what is set forth in the table above (i.e., 100% for the first Indication, [**]% for the second Indication, and no further payments for the third and any subsequent Indication); and (z) no additional Milestone Payments will be due for Milestones completed for the Development and Commercialization of Products that were previously achieved by a different Product for the same Indication, for any additional Indications (after the first two), or for any different AVEO Antibodies or Combination Products.

(d)

In the event that a milestone is skipped for any reason and a subsequent milestone is achieved with respect to any Product (e.g., [**]), then Novartis shall pay the amount of the skipped Milestone upon achievement of the subsequent Milestone.

8.3

Sales Milestones. 

(a)

Novartis will make each of the following one time payments when worldwide Annual Net Sales of a Product in a given Calendar Year first meets the corresponding thresholds:

Aggregate Net Sales of Product in any Calendar Year
during the Royalty Term

Sales Milestone Payment

Annual Net Sales exceeds US$[**]

[**]

Annual Net Sales exceeds US$[**]

[**]

Annual Net Sales exceeds US$[**]

[**]

(b)

Novartis will provide written notice to AVEO within [**] days of its determination that a Sales Milestone as contemplated by this Section 8.3 has been achieved, and will make the corresponding Sales Milestone Payment within [**] days after the date of receipt by Novartis of an Invoice for the indicated amount.

8.4

Royalty Payments.

(a)

In consideration of the licenses and rights to Novartis hereunder, during the Royalty Term, Novartis will make royalty payments to AVEO on Net Sales of Products by Novartis, its Affiliates and sublicensees, at the rates set forth below:  

Aggregate Net Sales of Product in any Calendar Year
during the Royalty Term

Royalty Rate

Portion of Net Sales less than US$[**]

[**]

Portion of Net Sales greater than or equal to US$[**] and less than US$[**]

[**]

Portion of Net Sales greater than or equal to US$[**]

[**]

(b)

For example, if Net Sales in a Calendar Year are $[**], the royalty on such Net Sales will be equal to [**]% of US$[**].

(c)

Royalties will be payable on a Product-by-Product and country-by-country basis during the Royalty Term for such Product in such country.  Following the expiration of the applicable Royalty Term for a Product in a country, Novartis’ licenses under this Agreement with respect to such Product in such country will continue in effect, but will become fully paid-up, royalty-free, transferable, perpetual and irrevocable.  For the avoidance of doubt, royalties will be payable only once with respect to the same unit of Product.

(d)

Within [**] days after each Calendar Quarter during the term of this Agreement following the First Commercial Sale of a Product, Novartis will provide to AVEO a Sales & Royalty Report.  AVEO will submit an Invoice to Novartis with respect to the royalty amount shown therein.  Novartis will pay such royalty amount within [**] days after receipt of the Invoice.

(e)

Notwithstanding anything to the contrary herein, in the event that, with respect to a Product in a country, (i) the Royalty Term for such Product in such country continues solely due to clause (b) of the definition of Royalty Term, or (ii) Generic Competition exists with respect to such Product in the Field in such country in a Calendar Year, then the royalty rates in such country for such Product will thereafter be reduced to [**] percent ([**]%) of the amounts set forth in the table above.  

8.5

Third Party Obligations; Set Off.

(a)

Except as set forth in Sections 8.5(b) and (c), AVEO will be responsible for and will pay all payments under the In-licensed AVEO Technology Agreements existing as of the Effective Date other than royalty payments attributable to sales of Products.  Novartis will provide AVEO written notice of the achievement of any milestone that would trigger a payment obligation by AVEO under an In-licensed AVEO Technology Agreement in sufficient time for AVEO to be able to fulfill its payment obligation to the applicable licensor, and AVEO will have no liability to Novartis, its Affiliates or sublicensees for any failure by AVEO to make a required milestone payment to the extent such failure was attributable to the failure by Novartis to provide sufficient notice hereunder.  

(b)

The Parties will share, on a 50:50 basis, any royalties due to AVEO’s licensors under the In-licensed AVEO Technology Agreements arising from the sale of Products by Novartis, its Affiliates, or its or their sublicensees.  AVEO will make all such royalty payments owed to the applicable licensor under each of the In-licensed AVEO Technology Agreements, and will invoice Novartis for fifty percent (50%) of such amounts.  Novartis shall pay to AVEO the amounts set forth in such Invoice within [**] days of receipt.

(c)

With respect to any Net Sales of a Product by Novartis, its Affiliates or its or their sublicensees for which there are no royalty payments due under Section 8.4, but there are royalty payments owed to AVEO’s licensors under the In-licensed AVEO Technology Agreements, AVEO shall invoice Novartis for one hundred percent (100%) of such amounts owed to such licensor pursuant to the terms of such In-licensed AVEO Technology Agreement associated with the Net Sales of such Product, and Novartis will be responsible for making such payments on or before the date on which such payments are due under the applicable In-licensed AVEO Technology Agreement; provided that such Invoice is delievered at least [**] days prior to the date on which such payment is due.

(d)

If Novartis reasonably determines that, in order to avoid infringement of any Patent Right not licensed hereunder that covers the composition of matter or method of use of an AVEO Antibody, it is required to obtain a license under such Patent Right from a Third Party in order to Commercialize a Product in the Field in a country and is required under a license agreement entered after the Effective Date to pay a royalty to such Third Party under such license (including in connection with the settlement of a patent infringement claim), Novartis will have the right to

deduct from the payments due to AVEO [**] percent ([**]%) of the royalties actually paid by Novartis to such Third Party under such license; provided, however, that in no event will any royalty payment due to AVEO from Novartis be reduced by more than [**]%) any Calendar Quarter through this Section 8.5(d). Any amount that Novartis is entitled to deduct that is reduced by this limitation will be carried forward and Novartis may deduct such amount from subsequent royalty payments due to AVEO until the full amount that Novartis was entitled to deduct is deducted. 

8.6

Payments.

(a)

All payments from Novartis to AVEO will be made by wire transfer in US Dollars to the credit of such bank account as may be designated by AVEO in this Agreement or in writing to Novartis.  Any payment which falls due on a date which is not a business day in the location from which the payment will be made may be made on the next succeeding business day in such location.

(b)

All payments under this Agreement will be payable in USD.  When conversion of payments from any foreign currency is required to be undertaken by Novartis, the USD equivalent will be calculated using Novartis’ then-current standard exchange rate methodology as applied in its external reporting.  If there is no standard exchange rate methodology applied by Novartis in its external reporting in accordance with Accounting Standards, then any amount in a currency other than USD shall be converted to USD using the exchange rate most recently quoted in the Wall Street Journal in New York as of the last business day of the applicable Calendar Quarter.

(c)

AVEO will pay any and all taxes levied on account of any payments made to it under this Agreement.  If any taxes are required to be withheld by Novartis, Novartis will: (i) deduct such taxes from the payment made to AVEO; (ii) timely pay the taxes to the proper taxing authority; (iii) send proof of payment to AVEO; and (iv) reasonably assist AVEO in its efforts to obtain a credit for such tax payment.  Each Party will reasonably assist the other Party in lawfully claiming exemptions from and/or minimizing such deductions or withholdings under double taxation laws or similar circumstances.

(d)

Without limiting any other rights or remedies available to AVEO hereunder, if Novartis does not pay any amount due on or before the due date, any such payment shall bear interest at a rate of [**] on the date the payment was due or the highest rate permitted by law (whichever is lower), computed from the date such payment was due until the date Novartis makes the payment.

8.7

Records and Audit Rights.

(a)

Novartis will keep, and will cause its Affiliates and sublicensees to keep, complete, true and accurate books and records in accordance with its

Accounting Standards in relation to Net Sales and royalties payable to AVEO hereunder.  Novartis will keep, and will cause its Affiliates and sublicensees to keep, such books and records for at least [**] years following the Calendar Quarter to which they pertain.  

(b)

AVEO may, upon written notice to Novartis, appoint an internationally-recognized independent accounting firm (which is reasonably acceptable to Novartis) (the “Auditor”) to inspect the relevant reports, statements, records or books of accounts (as applicable) of Novartis or its Affiliates or sublicensees to verify the accuracy of any Sales & Royalty Report.  Before beginning its audit, the Auditor will execute an undertaking reasonably acceptable to Novartis by which the Auditor will keep confidential all Information reviewed during such audit.  The Auditor will have the right to disclose to AVEO its conclusions regarding any payment owed under this Agreement.

(c)

Novartis and its Affiliates and sublicensees will make their records available for inspection by such Auditor during regular business hours at such place or places where such records are customarily kept, upon receipt of reasonable advance notice from AVEO.  The records will be reviewed solely to verify the accuracy of the Sales & Royalty Reports.  Such inspection right will not be exercised more than [**] and not more frequently than [**] with respect to records covering any specific period of time.  In addition, AVEO will only be entitled to audit the relevant books and records of Novartis relating to a Sales & Royalty Report for a period of [**] Calendar Years after receipt of the applicable Sales & Royalty Report.  AVEO will hold in confidence all Information received and all Information learned in the course of any audit or inspection, except to the extent necessary to enforce its rights under this Agreement or if disclosure is required by law, regulation or judicial order.

(d)

The Auditor will provide its audit report and basis for any determination to Novartis at the time such report is provided to AVEO, before it is considered final. Novartis will have the right to request a further determination by such Auditor as to matters which Novartis disputes within [**] days following receipt of such report. Novartis will provide the AVEO and the Auditor with a reasonably detailed statement of the grounds upon which it disputes any findings in the audit report and the Auditor will undertake to complete such further determination within [**] days after the dispute notice is provided, which determination will be limited to the disputed matters. Any matter that remains unresolved will be resolved in accordance with the dispute resolution procedures contained in Section 16.5.

(e)

In the event that the final result of the inspection reveals an undisputed underpayment or overpayment by Novartis, the underpaid or overpaid amount will be settled promptly.

(f)

AVEO will pay for such audits, as well as its own expenses associated with enforcing its rights with respect to any payments hereunder, except that in the event there is any upward adjustment in aggregate amounts

payable for any Calendar Quarter shown by such audit of more than [**] percent ([**]%) of the amount paid, Novartis will pay for such audit.  

8.8

No Projections.  AVEO and Novartis acknowledge that nothing in this Agreement will be construed as representing an estimate or projection of anticipated sales of any Product, and that the Milestones and Net Sales levels set forth above or elsewhere in this Agreement or that have otherwise been discussed by the Parties are merely intended to define the Milestone Payments and royalty obligations to AVEO in the event such Milestones or Net Sales levels are achieved.  NOVARTIS MAKES NO REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, THAT IT WILL BE ABLE TO SUCCESSFULLY COMMERCIALIZE ANY PRODUCT OR, IF COMMERCIALIZED, THAT ANY PARTICULAR NET SALES LEVEL OF SUCH PRODUCT WILL BE ACHIEVED.

9.

Intellectual property.

9.1

Inventions and Know-How.  All inventions and Know-How arising from Novartis’ activities under this Agreement, including any Patent Rights covering such inventions, will be owned by Novartis.

9.2

Ownership of Results and Data.  All data and results arising from Novartis’ activities under this Agreement, including but not limited to clinical and regulatory data and Information generated for regulatory purposes relating to the Product will be owned by Novartis.

9.3

Patent Prosecution.  

(a)

As between AVEO and Novartis, Novartis will assume and be responsible for all of the rights and obligations of AVEO under the St. Vincent’s Agreement with respect to prosecuting, maintaining, enforcing and defending those AVEO Patents that are licensed to AVEO pursuant to the St. Vincent’s Agreement that cover the AVEO Antibodies or Products or their use, composition, formulation, preparation or manufacture in the Field (the “SVH Patents”) at Novartis’  own cost and expense, subject to the applicable provisions of the St. Vincent’s Agreement (including, for clarity, reimbursement of patent costs). SVH will continue under the St. Vincent’s Agreement to prosecute and maintain the SVH Patents, and the Parties  will furnish to  each other copies of documents relevant to the prosecution and maintenance of the SVH Patents in sufficient time prior to the filing of such document to allow for review and comment by both AVEO andNovartis.  Novartis will notify and consult with AVEO if it forms an opinion that the prosecution and/or maintenance of any SVH Patents in any jurisdiction should not be continued, and Novartis will seek the agreement of SVH to such determination, consistent with the terms of the St. Vincent’s Agreement.

(b)

Novartis will have the sole right to prosecute and maintain all AVEO Patents for which AVEO is the assignee (the “Owned Patents”) at Novartis’ expense, using counsel reasonably acceptable to AVEO.  Novartis will consult with and keep AVEO informed of important issues relating to the prosecution of the Owned Patents, and will furnish to

AVEO copies of documents relevant to such prosecution and maintenance in sufficient time prior to the filing of such document to allow for review and comment by AVEO and, to the extent possible in the reasonable exercise of its discretion, Novartis will incorporate all of such comments. Novartis will reimburse AVEO, within [**] days of receipt of an Invoice therefor, for up to [**] USD ($[**]) in expenses incurred by AVEO prior to the Effective Date for the prosecution and maintenance of Owned Patents in the manner set forth in Exhibit D.  Novartis will notify AVEO of any decision not to continue to pay the expenses of prosecution and/or maintenance of any Owned Patent, which notice must be delivered at least [**] days prior to any payment due date.  In such event, AVEO, at its sole discretion and expense, shall have the right to continue prosecution or maintenance of such Owned Patent in such country and, thereafter, such Owned Patent shall no longer be considered an AVEO Patent licensed to Novartis in such country. In the event that AVEO undertakes such prosecution and maintenance, Novartis will provide AVEO all reasonable assistance and cooperation in relation thereto, including providing any necessary powers of attorney and executing any other required documents or instruments. 

(c)

Novartis acknowledges and agrees that it has no right to prosecute, maintain, enforce or defend any Patent Rights included in the In-licensed AVEO Technology other than the SVH Patents.  

9.4

Third Party Infringement.  

(a)

Each Party will promptly notify the other of any (i) infringement by a Third Party of any of the AVEO Patents or misappropriation of any AVEO Know-How in the Field of which it becomes aware, including any certification filed in the United States under 42 U.S.C. §262(l) or such similar laws as may exist in jurisdictions other than the United States (a “Biosimilar Notice”) (which Biosimilar Notice shall be provided to the other Party within [**] business days after receipt thereof), or (ii) known or suspected unauthorized use or misappropriation of AVEO Know-How in the Field of which such Party becomes aware.  Each Party shall provide the other Party with all available evidence supporting such infringement, suspected infringement, unauthorized use or misappropriation or suspected unauthorized use or misappropriation (collectively, “Third Party Infringement”).

(b)

Novartis will have the first right to bring and control any legal action in connection with the Third Party Infringement at its own expense as it reasonably determines appropriate, and AVEO will have the right, at its own expense, to be represented in any such action by counsel of its own choice.  If Novartis fails to bring an action or proceeding with respect to, or to terminate, infringement of any AVEO Patent Right (i) within [**] days following the notice of alleged infringement (or [**] days after Novartis receives the relevant Biosimilar Notice), or (ii) prior to [**] days before the time limit, if any, set forth in the appropriate laws and regulations for the filing of such actions, whichever comes first, AVEO will have the right, upon written approval of Novartis (such approval not

to be unreasonably withheld or delayed), to bring and control any such action at its own expense and by counsel of its own choice, and Novartis will have the right, at its own expense, to be represented in any such action by counsel of its own choice; provided, however, that if Novartis notifies AVEO in writing prior to [**] days before such time limit for the filing of any such action that Novartis intends to file such action before the time limit, then Novartis will be obligated to file such action before the time limit, and AVEO will not have the right to bring and control such action. 

(c)

At the request of the Party controlling the Third Party Infringement claim, the other Party will provide assistance in connection therewith, including by executing reasonably appropriate documents, access to such Party’s premises and employees, cooperating reasonably in discovery and joining as a party to the action if required.  

(d)

In connection with any such proceeding, Novartis will not enter into any settlement admitting the invalidity of, or otherwise impairing AVEO’s rights in, the AVEO Technology without the prior written consent of AVEO, which will not be unreasonably withheld or delayed, and provided further that Novartis will not enter into any settlement admitting the invalidity of any claim of the SVH Patents, or otherwise impairing the rights of SVH in the St. Vincent’s Technology, without the prior written consent of SVH.  

(e)

Any recoveries resulting from such an action relating to a Third Party Infringement will be first applied against payment of each Party’s costs and expenses in connection therewith.  In the event that Novartis brought such action, any remainder will be retained by Novartis; provided, however, any such amount will be considered Net Sales hereunder and will be subject to a royalty payment to AVEO under this Agreement.  In the event that AVEO brought such action, any remainder will be retained by AVEO.

9.5

Patent Invalidity Claim.  If a Third Party at any time asserts a claim that any AVEO Patent is invalid or otherwise unenforceable (an “Invalidity Claim”), whether as a defense in an infringement action brought by a Party pursuant to Section 9.4, in a declaratory judgment action or otherwise, Novartis shall have the first right, but not the obligation, to defend such Invalidity Claim and AVEO shall cooperate with Novartis in preparing and formulating a response to such Invalidity Claim.  If Novartis does not defend an Invalidity Claim brought against an AVEO Patent, AVEO may defend such Invalidity Claim and the coordination provisions of Section 9.4(c) will apply to such Invalidity Claim, mutatis mutandis as they apply to Third Party Infringement suits.  Neither Party may, without the consent of the other Party, settle or compromise any Invalidity Claim in any manner which would (a) have an adverse effect on such other Party’s rights or obligations hereunder or (b) be an admission of liability on behalf of the other Party (provided, however, that the Party initiating such suit may settle such suit without such consent if such settlement involves only the receipt of money from, or the payment of money to, such Third Party and the Party initiating such suit makes all such payments to such Third Party).  To the extent such Invalidity Claim is raised as a defense in an infringement action

brought by a Party pursuant to Section 9.4, the expense provisions of Section 9.4 will apply and counsel to the Party controlling the infringement action shall act as the ministerial liaison with the court.   

9.6

Trademarks.  Novartis will have the right to brand the Products using Novartis related trademarks and any other trademarks and trade names it determines appropriate for the Product, which may vary by country or within a country (“Product Marks”).  Novartis will own all rights in the Product Marks and register and maintain the Product Marks in the countries and regions it determines reasonably necessary.  

9.7

Patent Extensions.

(a)

If requested by Novartis, AVEO will cooperate in obtaining patent term restoration (under but not limited to Drug Price Competition and Patent Term Restoration Act), supplemental protection certificates or their equivalents, and patent term extensions with respect to the AVEO Patents in any country and/or region where applicable.  AVEO will provide all reasonable assistance requested by Novartis, including permitting Novartis to proceed with applications for such in the name of AVEO, if deemed appropriate by Novartis, and executing documents and providing any relevant information to Novartis.

(b)

As between the Parties, Novartis will in its sole discretion determine which, if any, AVEO Patents it will apply to extend; provided, however, that Novartis will give AVEO [**] days notice before doing so and reasonably consider any input from AVEO with respect to the extension of any AVEO Patents.

10.

CONFIDENTIALITY

10.1

Duty of Confidence.  

(a)

Subject to the other provisions of this Section 10, all Information disclosed by a Party or its Affiliates under this Agreement will be maintained in confidence and otherwise safeguarded by the recipient Party.  The recipient Party may only use the Information for the purposes of this Agreement and pursuant to the rights granted to the recipient Party under this Agreement.  Subject to the other provisions of this Section 10, each Party will hold as confidential such Information of the other Party or its Affiliates in the same manner and with the same protection as such recipient Party maintains its own confidential information.  Subject to the other provisions of this Section 10, a recipient Party may only disclose Information of the other Party to employees, agents, contractors, consultants and advisers of the Party and its Affiliates and sublicensees and to Third Parties to the extent reasonably necessary for the purposes of, and for those matters undertaken pursuant to, this Agreement; provided that such Persons are bound to maintain the confidentiality of the Information in a manner consistent with the confidentiality provisions of this Agreement.

(b)

With respect to AVEO’s obligations under this Section 10, all AVEO Know-How, to the extent relating to AVEO Antibodies and Products in the Field, will be considered Information of Novartis and AVEO will maintain in confidence and otherwise safeguard such AVEO Know-How as such in accordance with this Section 10 (it being understood that the exceptions in Sections 10.2(b) and (c) will not apply to AVEO with respect to AVEO Know-How). 

10.2

Exceptions.  The obligations under this Section 10 will not apply to any information to the extent the recipient Party can demonstrate by competent evidence that such information:

(a)

is (at the time of disclosure) or becomes (after the time of disclosure) known to the public or part of the public domain through no breach of this Agreement by the recipient Party or its Affiliates;

(b)

was known to, or was otherwise in the possession of, the recipient Party or its Affiliates prior to the time of disclosure by the disclosing Party or any of its Affiliates;

(c)

is disclosed to the recipient Party or an Affiliate on a non-confidential basis by a Third Party who is entitled to disclose it without breaching any confidentiality obligation to the disclosing Party or any of its Affiliates; or

(d)

is independently developed by or on behalf of the recipient Party or its Affiliates, as evidenced by its written records, without reference to the Information disclosed by the disclosing Party or its Affiliates under this Agreement.

10.3

Authorized Disclosures.  

(a)

In addition to disclosures allowed under Section 10.1 and 10.2, either Party may disclose Information belonging to the other Party or its Affiliates to the extent such disclosure is necessary in the following instances: (i) filing or prosecuting Patent Rights as permitted by this Agreement; (ii) in connection with Regulatory Filings for Products; (iii) prosecuting or defending litigation as permitted by this Agreement; (iv) complying with applicable court orders or governmental regulations; (v) fulfilling such Party’s obligations under the In-licensed AVEO Technology Agreements; or (vi) to the extent otherwise necessary or

appropriate in connection with exercising the license and other rights granted to it hereunder.   

(b)

In addition, Novartis and its Affiliates and sublicensees may disclose Information of AVEO to Third Parties as may be necessary or useful in connection with the Development, manufacture or Commercialization of the AVEO Antibodies and/or Product(s) as permitted by this Agreement, including in connection with subcontracting transactions.

(c)

In addition, AVEO may disclose the terms of this Agreement and Information pertaining to Products in connection with an assignment or potential assignment of this Agreement, a loan, financing or investment transaction, or an acquisition, merger, consolidation or similar transaction (or for such Persons to determine their interest in performing such activities or entering into such transactions), in each case on the condition that any Third Parties to whom such disclosures are made agree to be bound by confidentiality and non-use obligations no less rigorous than those contained in this Agreement.

(d)

In the event the recipient Party is required to disclose Information of the disclosing Party by law or in connection with bona fide legal process, such disclosure will not be a breach of this Agreement; provided that the recipient Party (i) informs the disclosing Party as soon as reasonably practicable of the required disclosure; (ii) limits the disclosure to the required purpose; and (iii) at the disclosing Party’s request and expense, assists in an attempt to object to or limit the required disclosure.

10.4

Ongoing Obligation for Confidentiality.  Upon early termination of this Agreement for any reason, each Party and its Affiliates will immediately return to the other Party or destroy any Information disclosed by the other Party, except for one copy which may be retained in its confidential files for archive purposes.

11.

TERM AND TERMINATION

11.1

Term.  The term of this Agreement will commence upon the Effective Date and continue on a country-by-country basis until the expiry of the Royalty Term in such country, unless earlier terminated as permitted by this Agreement.  

11.2

Termination for Cause.  If either Novartis or AVEO is in material breach of any material obligation hereunder, the non-breaching Party may give written notice to the breaching Party specifying the claimed particulars of such breach, and in the event such material breach is not cured within sixty (60) days after such notice, the non-breaching Party will have the right (but not the obligation) thereafter to terminate this Agreement immediately by giving written notice to the breaching Party to such effect; provided, however, that if such breach is capable of being cured but cannot be cured within such sixty (60) day period and the breaching Party initiates actions to cure such breach within such period and thereafter diligently pursues such actions, the breaching Party will have an additional thirty (30) days (or such longer period agreed upon by the Parties) to cure such breach.  In the event that arbitration is commenced with respect to any alleged breach hereunder, no purported termination of this Agreement pursuant to this Section 11.2 will take effect until the resolution of such arbitration.  

Any termination by any Party under this Section and the effects of termination provided herein will be without prejudice to any damages or other legal or equitable remedies to which it may be entitled.   

11.3

Termination of License if Novartis Challenges AVEO Patents.  Except in connection with any infringement action brought by AVEO, its Affiliates or any of its licensors against Novartis, if Novartis or any of its Affiliates’ or sublicensees, directly or indirectly, (i) initiates or requests an interference, opposition or similar proceeding with respect to any AVEO Patent in any jurisdiction; (ii) makes, files or maintains any claim, demand, lawsuit, or cause of action to challenge the validity or enforceability of any AVEO Patent in any jurisdiction; or (iii) opposes any extension of, or the grant of a supplementary protection certificate with respect to, any AVEO Patent in any jurisidction, AVEO shall have the right to terminate this Agreement (and the license and sublicense rights to Novartis and its Affiliates) upon 30 days’ notice to Novartis; provided, however, that if Novartis terminates such action prior to the expiration of the 30 day notice period, the notice of termination shall be void.  

11.4

[Reserved].

11.5

Termination by Novartis Without Cause.  Novartis may terminate this Agreement without cause at any time after the Effective Date in its entirety or on a Product-by-Product or country-by-country basis at any time on sixty (60) days’ prior written notice.  

12.

EFFECT OF TERMINATION

12.1

Termination by Novartis for Cause.  Upon termination of this Agreement by Novartis pursuant to Section 11.2:

(a)

the licenses and other rights granted by AVEO to Novartis under the AVEO Technology will terminate and Novartis shall not have any rights to use or exercise any rights under the AVEO Technology; and

(b)

except as set forth in this Section and in Section 12.3, the rights and obligations of the Parties hereunder will terminate as of the date of such termination.

12.2

Termination by AVEO for Cause or by Novartis Without Cause.  Upon termination of this Agreement by AVEO pursuant to Section 11.2 or Section 11.3 or by Novartis pursuant to Section 11.5:

(a)

all licenses and other rights granted by AVEO to Novartis under the AVEO Technology will terminate and Novartis shall not have any rights to use or exercise any rights under the AVEO Technology;

(b)

the provisions of Article 9 will terminate;

(c)

the provisions of Section 10.4 will not apply to AVEO;

(d)

within [**] days of termination, Novartis will provide to AVEO a fair and accurate summary report of the status of the Development, manufacture

and Commercialization of all AVEO Antibodies and Products in the Field in each country through the effective date of termination; 

(e)

Novartis will grant, and hereby does grant, to AVEO and its Affiliates, solely for the Development, manufacture and Commercialization of Products in the Field, a perpetual, irrevocable, exclusive, worldwide, fully paid-up license, with the right to grant sublicenses, under all Patent Rights and Know-How Controlled by Novartis and its Affiliates and sublicensees as of the effective date of termination, that are specifically related to the Development, manufacture and Commercialization of Products in the Field;

(f)

to the extent permitted by applicable law, Novartis will transfer to AVEO or its designee, solely for the Development, manufacture and Commercialization of Products in the Field, all right, title, and interest in and to all preclinical and clinical data, and all other supporting data, including pharmacology, toxicology, chemistry and biology data, and documented technical and other information or materials Controlled by Novartis and its Affiliates and sublicensees to the extent related to the Development, manufacture and Commercialization of Products in the Field; provided that Novartis may retain a single copy of such items for its records as required by applicable law;

(g)

to the extent permitted by applicable law, Novartis will transfer to AVEO or its designee all Regulatory Filings, Regulatory Approvals (including reimbursement and pricing approvals), the contents of any global safety database, records of all interactions with Regulatory Authorities, in each case to the extent related to Products in the Field, that Novartis and its Affiliates and sublicensees Control as of the effective date of such termination. If Novartis is restricted under applicable law from transferring ownership of any of the foregoing items to AVEO or its designee, Novartis will grant, and hereby does grant, to AVEO (or its designee) a right of reference or use to such item.  Novartis will take all permitted actions reasonably necessary to effect such transfer or grant of right of reference or use to AVEO or its designee;

(h)

to the extent reasonably requested by AVEO, Novartis will transfer to AVEO any license agreements or other contracts between Novartis or any of its Affiliates and any Third Party that are specific to the Products in the Field (including, as applicable, clinical trial and manufacturing agreements), to the extent such agreements are in effect as of the effective date of termination and such assignment or transfer is permitted at no cost or expense to Novartis, and to facilitate introductions of AVEO to the applicable subcontractors, licensors, manufacturing vendors, clinical trial sites, clinical trial investigators and the like;

(i)

AVEO will have the right to purchase from Novartis all of the inventory of the Products held by Novartis and its Affiliates and sublicensees as of the effective date of termination at a price equal to Novartis’ actual manufacturing cost, determined in accordance with Accounting

Standards, but only if such Products meet the applicable release specifications; 

(j)

for a period of [**] months following the effective date of termination, Novartis will provide such assistance as may be reasonably necessary to transfer manufacturing documents and materials that are used by Novartis and its Affiliates and sublicensees (or their subcontractor(s)) in the manufacture of Products, and cooperate with AVEO in reasonable respects to transfer to AVEO, or AVEO’s designated contract manufacturer, the manufacturing technologies (including all relevant Know-How) that are used in the manufacture of the Products;

(k)

AVEO will pay to Novartis, on a Product-by-Product basis for each Product for which a Phase II Clinical Trial had been Initiated prior to the effective date of termination, milestones and royalties on Net Sales of such Product by or under the authority of AVEO, its Affiliates or licensees or sublicensees, at fifty percent (50%) of the rates set forth in Section 8 in accordance with the same schedule and other terms and conditions as Novartis would have otherwise been obligated to pay milestones and royalties to AVEO for Products under Article 8, mutatis mutandis;

(l)

except as set forth in this Section and in Section 12.3, the rights and obligations of the Parties hereunder will terminate as of the date of such termination; and

(m)

AVEO will thereafter indemnify, defend and hold Novartis and the Novartis Indemnitees harmless in the manner forth in Section 14.2(a) as if AVEO were Novartis and the Novartis Indemnitees were the AVEO Indemnittees, mutatis mutandis, and Novartis’ indemnification obligations under that Section 14.2(a) shall thereupon cease.  

12.3

Survival.  Expiration or termination of this Agreement will not relieve the Parties of any obligation accruing prior to such expiration or termination.  Without limiting the foregoing, the provisions of Article 1, 11, 12, 14, and 16 will survive expiration or termination of this Agreement.  The provisions of Article 10 (Confidentiality) will survive the termination or expiration of this Agreement for a period of [**] years.

12.4

Termination Not Sole Remedy.  Termination is not the sole remedy under this Agreement and, whether or not termination is effected and notwithstanding anything contained in this Agreement to the contrary, all other remedies will remain available except as agreed to otherwise herein.  For the avoidance of doubt, nothing in this Agreement shall obligate a Party to terminate this Agreement in the event that the other Party breaches any obligation of this Agreement, and failure to terminate this Agreement shall not prohibit or modify the recovery of damages pursuant to Section 16.5.

13.

REPRESENTATIONS, WARRANTIES AND COVENANTS 

13.1

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

(a)

it is a corporation duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation;

(b)

it has full corporate power and authority to execute, deliver, and perform this Agreement, and has taken all corporate action required by law and its organizational documents to authorize the execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement, or, in the case of Novartis, such actions will be ratified as soon as practicable after the Effective Date by all necessary corporate power or other action;

(c)

this Agreement constitutes a valid and binding agreement enforceable against it in accordance with its terms, except as enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and other laws relating to or affecting creditors’ rights generally and by general equitable principles and public policy constraints (including those pertaining to limitations and/or exclusions of liability, competition laws, penalties and jurisdictional issues including conflicts of laws);

(d)

all consents, approvals and authorizations from all governmental authorities or other Third Parties required to be obtained by such Party in connection with this Agreement have been obtained;

(e)

the execution and delivery of this Agreement and all other instruments and documents required to be executed pursuant to this Agreement, and the consummation of the transactions contemplated hereby do not and will not (i) conflict with or result in a breach of any provision of its organizational documents; (ii) result in a breach of any agreement to which it is a party; or (iii) violate any law; and

(f)

neither such Party nor, to the actual knowledge of such Party, any employee, agent or subcontractor of such Party involved or to be involved in the Development of the AVEO Antibodies or the Product has been debarred under Subsection (a) or (b) of Section 306 of the Federal Food, Drug and Cosmetic Act (21 U.S.C. 335a).

13.2

Covenants by Novartis.  

(a)

No Person who is known by Novartis (a) to have been debarred under Subsection (a) or (b) of Section 306 of said Act, or (b) to be on any of the FDA clinical investigator enforcement lists (including, but not limited to, the (i) Disqualified/Totally Restricted List, (ii) Restricted List and (iii) Adequate Assurances List), will be employed by or on behalf of Novartis or its Affiliates or otherwise participate in the performance of any activities hereunder; and

(b)

Novartis will maintain, in accordance with sound actuarial principles, a program of self-insurance with respect to its activities and obligations under this Agreement in such amounts as are commercially reasonable in the industry for companies conducting similar business and will require any of its Affiliates undertaking activities under this Agreement to do the same.    

13.3

Representations and Warranties by AVEO.  AVEO represents and warrants to Novartis as of the Effective Date that:

(a)

Exhibit B sets forth a complete and accurate list of (i) all AVEO Patents in existence as of the Effective Date having patent claims covering the AVEO Antibodies and/or Product, or their use, composition, formulation, preparation or manufacture, which list indicates the owner, licensor and/or co-owner(s) thereof if such AVEO Patents are not solely owned by AVEO; and (ii) all license, assignment, distribution or other agreements relating to the AVEO Patents and AVEO Know-How;

(b)

AVEO is the sole and exclusive owner, or exclusive licensee of all of the AVEO Patents free from Encumbrances other than Encumbrances arising under the In-licensed AVEO Technology Agreements;

(c)

other than AVEO Technology licensed to AVEO by a Third Party, AVEO has obtained from all individuals who participated in any respect in the invention or authorship of any AVEO Technology effective assignments of all ownership rights of such individuals in such AVEO Technology, either pursuant to written agreement or by operation of law;

(d)

to the actual knowledge of AVEO’s executive officers after reasonable inquiry, all of its employees, officers, and consultants engaged in the Development and manufacture of Products have executed agreements or have existing obligations under applicable laws requiring assignment to AVEO of all inventions made during the course of and as the result of their association with AVEO and obligating the individual to maintain as confidential AVEO’s Information as well as confidential information of other parties (including Novartis and its Affiliates) which such individual has received;

(e)

AVEO has the right to grant to Novartis the licenses under the AVEO Technology that it purports to grant hereunder;

(f)

AVEO has the right to use and disclose and to enable Novartis to use and disclose (in each case under appropriate conditions of confidentiality) the AVEO Know-How free from Encumbrances other than Encumbrances arising under the In-licensed AVEO Technology Agreements;

(g)

to the actual knowledge of AVEO’s executive officers after reasonable inquiry, (i) the issued patents in the Owned Patents are valid and enforceable, and (ii) no Claims, challenges, oppositions, nullity actions, interferences, inter-partes reexaminations, inter-partes reviews, post-grant reviews, derivation proceedings, or other proceedings are pending or

threatened against the Owned Patents and (iii) AVEO has filed and prosecuted patent applications within the Owned Patents in good faith and complied with all duties of disclosure with respect thereto;  

(h)

to the actual knowledge of AVEO’s executive officers after reasonable inquiry, AVEO has not committed any act, or omitted to commit any act, that may cause the Owned Patents to expire prematurely or be declared invalid or unenforceable;

(i)

all application, registration, maintenance and renewal fees in respect of the Owned Patents as of the Effective Date have been paid and all necessary documents and certificates have been filed with the relevant agencies for the purpose of maintaining the Owned Patents;  

(j)

AVEO has not granted to any Third Party, including any academic organization or agency, any rights to the AVEO Antibodies or Product;

(k)

AVEO has not received any written notice alleging that the Development, registration, manufacture, use or Commercialization of the AVEO Antibodies or Product infringes the Patent Rights or misappropriates the Know-How of any Third Party;

(l)

AVEO has not initiated or been involved in any proceedings or Claims in which it alleges that any Third Party is or was infringing or misappropriating any AVEO Technology, nor have any such proceedings been threatened by AVEO, nor do any AVEO’s executive officers have any actual knowledge of a valid basis for any such proceedings;

(m)

no officer or employee of AVEO is subject to any agreement with any other Third Party which requires such officer or employee to assign any interest in any AVEO Technology relating to the AVEO Antibodies or Product to any Third Party;

(n)

AVEO has taken all reasonable precautions to preserve the confidentiality of the AVEO Know-How;

(o)

except as set forth in Schedule 13.3(o), AVEO has not entered into a government funding relationship that would result in rights to any AVEO Antibodies or Product residing in the US Government, National Institutes of Health, National Institute for Drug Abuse or other agency, and the licenses granted hereunder are not subject to overriding obligations to the US Government as set forth in Public Law 96 517 (35 U.S.C. 200-204), as amended, or any similar obligations under the laws of any other country;

(p)

except pursuant to the terms of the In-licensed AVEO Technology Agreements, (i) AVEO has not granted any Third Party rights that would otherwise interfere or be inconsistent with Novartis’ rights hereunder, and (ii) there are no agreements or arrangements to which AVEO or any of its Affiliates is a party relating to the Product, AVEO Antibodies, AVEO Patents, or AVEO Know-How that would materially limit the rights

granted to Novartis under this Agreement or that materially restrict or will result in a material restriction on Novartis’ ability to Develop, manufacture or Commercialize the AVEO Antibodies and the Product;  

(q)

(i) Schedules 1, 2, and 3 consist of true and correct copies of all of the In-licensed AVEO Technology Agreements, including all amendments as of the Effective Date, (ii) the Agreements are in full force and effect, and (iii) AVEO has not received any notice from the relevant counter-party to any of the In-licensed AVEO Technology Agreements that AVEO or the Third Party is in breach of such agreement; and (iv) AVEO does not have actual knowledge of any facts or circumstances that could reasonably result in a breach of the In-licensed AVEO Technology Agreements; and

(r)

notwithstanding anything to the contrary contained in this Agreement, the representations and warranties of AVEO contained in this Agreement do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  

13.4

Covenants of AVEO.  AVEO covenants that:

(a)

it will not grant any interest in the AVEO Patents or AVEO Know-How which is inconsistent with the terms and conditions of this Agreement; and

(b)

if, at any time after execution of this Agreement, it becomes aware that it or any employee, agent or subcontractor of AVEO who participated in the Development or manufacture of an AVEO Antibody or Product is on, or is being added to the FDA Debarment List or any of the three FDA Clinical Investigator Restriction Lists referenced in Section 13.1(f), it will provide written notice of this to Novartis within [**] days of its becoming aware of this fact.

13.5

No Other Warranties. Except as expressly provided in this Article 13, the AVEO Technology is licensed hereunder “as is”.  Nothing in this Agreement shall be construed as a representation made or warranty given by AVEO that it will be successful in prosecuting any AVEO Patents, that any patents will issue based on pending applications or that any such pending applications or patents issued thereon will be valid. EXCEPT AS EXPRESSLY STATED IN THIS SECTION 13, (A) NO REPRESENTATION, CONDITION OR WARRANTY WHATSOEVER IS MADE OR GIVEN BY OR ON BEHALF OF NOVARTIS OR AVEO; AND (B) ALL OTHER CONDITIONS AND WARRANTIES WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE ARE HEREBY EXPRESSLY EXCLUDED, INCLUDING ANY CONDITIONS AND WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.  

14.

INDEMNIFICATION; LIABILITY

14.1

Indemnification by AVEO.  AVEO will indemnify and hold Novartis, its Affiliates, and their respective officers, directors and employees (“Novartis Indemnitees”) harmless from and against any Claims against them to the extent arising or resulting

from the breach of any of the covenants, warranties or representations made by AVEO to Novartis under this Agreement; provided, however, that AVEO will not be obliged to so indemnify, defend and hold harmless the Novartis Indemnitees for any Claims for which Novartis has an obligation to indemnify AVEO Indemnitees pursuant to Section 14.2 or to the extent that such Claims arise from the breach, negligence or willful misconduct of Novartis or the Novartis Indemnitee. 

14.2

Indemnification by Novartis.  Novartis will indemnify and hold AVEO, its Affiliates, and their respective officers, directors and employees (“AVEO Indemnitees”) harmless from and against any Claims against them to the extent arising or resulting from:

(a)

actions by Novartis, its Affiliates and sublicensees, and their respective employees, agents and subcontractors, in connection with the Development, manufacture or Commercialization of an AVEO Antibody or Product; or

(b)

the breach of any of the covenants, warranties, or representations made by Novartis to AVEO under this Agreement;

14.3

Indemnification Procedure.

(a)

For the avoidance of doubt, all indemnification claims in respect of a Novartis Indemnitee or AVEO Indemnitee will be made solely by Novartis or AVEO, respectively.  

(b)

A Party seeking indemnification hereunder (“Indemnified Party”) will notify the other Party (“Indemnifying Party”) in writing reasonably promptly after the assertion against the Indemnified Party of any Claim or fact in respect of which the Indemnified Party intends to base a claim for indemnification hereunder (“Indemnification Claim Notice”), but the failure or delay to so notify the Indemnifying Party will not relieve the Indemnifying Party of any obligation or liability that it may have to the Indemnified Party, except to the extent that the Indemnifying Party demonstrates that its ability to defend or resolve such Claim is adversely affected thereby.  The Indemnification Claim Notice will contain a description of the claim and the nature and amount of the Claim (to the extent that the nature and amount of such Claim is known at such time).  Upon the request of the Indemnifying Party, the Indemnified Party will furnish promptly to the Indemnifying Party copies of all correspondence, communications and official documents (including court documents) received or sent in respect of such Claim.  

(c)

Subject to the provisions of Sections (d) and (e) below, the Indemnifying Party will have the right, upon written notice given to the Indemnified

Party within [**] days after receipt of the Indemnification Claim Notice to assume the defense and handling of such Claim, at the Indemnifying Party’s sole expense, in which case the provisions of Section 14.3(d) below will govern.  The assumption of the defense of a Claim by the Indemnifying Party will not be construed as acknowledgement that the Indemnifying Party is liable to indemnify any indemnitee in respect of the Claim, nor will it constitute a waiver by the Indemnifying Party of any defenses it may assert against any Indemnified Party’s claim for indemnification.  In the event that it is ultimately decided that the Indemnifying Party is not obligated to indemnify or hold an Indemnitee harmless from and against the Claim, the Indemnified Party will reimburse the Indemnifying Party for any and all costs and expenses (including attorneys’ fees and costs of suit) and any losses incurred by the Indemnifying Party in its defense of the Claim.  If the Indemnifying Party does not give written notice to the Indemnified Party, within [**] days after receipt of the Indemnification Claim Notice, of the Indemnifying Party’s election to assume the defense and handling of such Claim, the provisions of Section 14.3(e) below will govern.   

(d)

Upon assumption of the defense of a Claim by the Indemnifying Party: (i) the Indemnifying Party will have the right to and will assume sole control and responsibility for dealing with the Claim; (ii) the Indemnifying Party may, at its own cost, appoint as counsel in connection with conducting the defense and handling of such Claim any law firm or counsel reasonably selected by the Indemnifying Party; (iii) the Indemnifying Party will keep the Indemnified Party informed of the status of such Claim; and (iv) the Indemnifying Party will have the right to settle the Claim on any terms the Indemnifying Party chooses; provided, however, that it will not, without the prior written consent of the Indemnified Party, agree to a settlement of any Claim which could lead to liability or create any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder or which admits any wrongdoing or responsibility for the claim on behalf of the Indemnified Party.  The Indemnified Party will cooperate with the Indemnifying Party and will be entitled to participate in, but not control, the defense of such Claim with its own counsel and at its own expense.  In particular, the Indemnified Party will furnish such records, information and testimony, provide witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith.  Such cooperation will include access during normal business hours by the Indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Claim, and making the Indemnified Party, the Indemnitees and its and their employees and agents available on a mutually convenient basis to provide additional information and explanation of any records or information provided.  

(e)

If the Indemnifying Party does not give written notice to the Indemnified Party as set forth in Section 14.3(c) or fails to conduct the defense and

handling of any Claim in good faith after having assumed such, the Indemnified Party may, at the Indemnifying Party’s expense, select counsel reasonably acceptable to the Indemnifying Party in connection with conducting the defense and handling of such Claim and defend or handle such Claim in such manner as it may deem appropriate.  In such event, the Indemnified Party will keep the Indemnifying Party timely apprised of the status of such Claim and will not settle such Claim without the prior written consent of the Indemnifying Party, which consent will not be unreasonably withheld.  If the Indemnified Party defends or handles such Claim, the Indemnifying Party will cooperate with the Indemnified Party, at the Indemnified Party’s request but at no expense to the Indemnified Party, and will be entitled to participate in the defense and handling of such Claim with its own counsel and at its own expense.   

14.4

Mitigation of Loss.  Each Indemnified Party will take and will procure that its Affiliates take all such reasonable steps and action as are necessary or as the Indemnifying Party may reasonably require in order to mitigate any Claims (or potential losses or damages) under this Section 14.  Nothing in this Agreement will or will be deemed to relieve any Party of any common law or other duty to mitigate any losses incurred by it.

14.5

Special, Indirect and Other Losses.  NEITHER PARTY NOR ANY OF ITS AFFILIATES SHALL BE LIABLE IN CONTRACT, TORT, NEGLIGENCE BREACH OF STATUTORY DUTY OR OTHERWISE FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OR FOR ANY ECONOMIC LOSS OR LOSS OF PROFITS SUFFERED BY THE OTHER PARTY, EXCEPT TO THE EXTENT ANY SUCH DAMAGES ARE REQUIRED TO BE PAID TO A THIRD PARTY AS PART OF A CLAIM FOR WHICH A PARTY PROVIDES INDEMNIFICATION UNDER THIS SECTION 14.

15.

PUBLICATIONS AND PUBLICITY

15.1

Publications.  

(a)

Each Party and its Affiliates shall have the right to make disclosures pertaining to an AVEO Antibody or Product to Third Parties in publications in accordance with the following procedure:  The publishing Party will provide the non-publishing Party with an advance copy of the proposed publication, and the other Party will then have [**] days prior to submission of any publication in which to recommend any changes it reasonably believes are necessary to preserve any Patent Rights or Know-How belonging in whole or in part to the non-publishing Party.  If the non-publishing Party informs the publishing Party that such Publication, in the non-publishing Party’s reasonable judgment, could be expected to have a material adverse effect on any patentable invention owned by or licensed, in whole or in part, to the non-publishing Party (other than pursuant to a license granted under this Agreement), or on any Know-How which is Information of the non-publishing Party, or which could have a material adverse effect on the Development or Commercialization of a Product, the publishing Party shall delay or prevent such publication

as follows:  (i) with respect to a patentable invention, such publication shall be delayed sufficiently long (not to exceed [**] days) to permit the timely preparation and filing of a patent application; and (ii) with respect to Know-How which is Information of such non-publishing Party or which could have a material adverse effect on the Development or Commercialization of a Product, such Know-How or Information shall be deleted from the publication.   

(b)

For the avoidance of doubt, Novartis or any of its Affiliates may, without any required consents from AVEO publish or have published information about clinical trials related to the Product, including the results of such clinical trials, as required by applicable law or regulation.  

15.2

Publicity.  

(a)

Neither Party will use the name, symbol, trademark, trade name or logo of the other Party or its Affiliates in any press release, publication or other form of public disclosure without the prior written consent of the other Party in each instance (such consent not to be unreasonably withheld or delayed), except for those disclosures for which consent has already been obtained.  

(b)

The Parties shall issue a press release, in the form attached as Exhibit E, within one (1) business day after the Effective Date, to announce the execution of this Agreement.  Except as required by judicial order or applicable law, or as set forth below, neither Party shall make any public announcement concerning this Agreement beyond the scope of the initial press release without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed.  For the avoidance of doubt, (i) Novartis may issue press releases and other public statements as it deems appropriate in connection with the Development and Commercialization of Products under this Agreement and (ii) AVEO may issue press releases and other public statements as it deems appropriate in connection with the achievement of Milestones under this Agreement.

(c)

Either Party may also disclose the existence and terms of this Agreement in confidence to its attorneys and advisors, and to potential acquirors (and their respective professional advisors), in connection with a potential merger, acquisition or reorganization and to existing and potential investors or lenders of such Party, as a part of their due diligence investigations, or to existing and potential sublicensees or to permitted sublicensees and assignees, or to any other Person described in Section 10.3(c) or this 15.2(c), in each case under an agreement to keep the terms of this Agreement confidential under terms of confidentiality and non-use substantially no less rigorous than the terms contained in this Agreement and to use such information solely for the purpose permitted pursuant to Section 10.3(c) or this 15.2(c).

(d)

Notwithstanding the foregoing, each Party may make any disclosures required of it to comply with any duty of disclosure it may have pursuant to law or governmental regulation or pursuant to the rules of any

recognized stock exchange.  If a disclosure required by law, governmental regulation or the rules of any recognized stock exchange, the Parties will coordinate with each other with respect to the timing, form and content of such required disclosure.  If so requested by the other Party, the Party subject to such obligation will use commercially reasonable efforts to obtain an order protecting to the maximum extent possible the confidentiality of such provisions of this Agreement as reasonably requested by the other Party.  If the Parties are unable to agree on the form or content of any required disclosure, such disclosure will be limited to the minimum required as determined by the disclosing Party in consultation with its legal counsel.  Without limiting the foregoing, each Party will consult with the other Party on the provisions of this Agreement, together with exhibits or other attachments attached hereto, to be redacted in any filings made by AVEO or Novartis with the Securities and Exchange Commission (or other regulatory body) or as otherwise required by law. 

16.

GENERAL PROVISIONS

16.1

Assignment.

(a)

Neither Party may assign its rights and obligations under this Agreement without the other Party’s prior written consent, except that either Party may (i) assign its rights and obligations under this Agreement or any part hereof to one or more of its Affiliates; or (ii) assign this Agreement in its entirety to a successor to all or substantially all of its business or assets to which this Agreement relates (including, in the case of AVEO, in connection with a Change of Control). Any permitted assignee will assume all obligations of its assignor under this Agreement (or related to the assigned portion in case of a partial assignment). Any attempted assignment in contravention of the foregoing will be void. Subject to the terms of this Agreement, this Agreement will be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

(b)

Each Party agrees that, notwithstanding any provisions of this Agreement to the contrary, in the event that this Agreement is assigned by AVEO in connection with a Change in Control or AVEO otherwise undergoes a Change in Control, (i) Novartis shall not be entitled to any rights or access to Patent Rights or Know-How of the assignee or acquirer of AVEO, and (ii) the assignee or acquirer shall not be bound by the provisions of Section 2.3(a).

16.2

Extension to Affiliates.  Novartis will have the right to extend the rights, immunities and obligations granted in this Agreement to one or more of its Affiliates.  All applicable terms and provisions of this Agreement will apply to any such Affiliate to which this Agreement has been extended to the same extent as such terms and provisions apply to Novartis.  Novartis will remain primarily liable for any acts or omissions of its Affiliates.

16.3

Severability.  Should one or more of the provisions of this Agreement become void or unenforceable as a matter of law, then this Agreement will be construed as if such provision were not contained herein and the remainder of this Agreement will be in full force and effect, and the Parties will use their commercially reasonable efforts to substitute for the invalid or unenforceable provision a valid and enforceable provision which conforms as nearly as possible with the original intent of the Parties. 

16.4

Governing Law and Jurisdiction.  This Agreement will be governed by and construed under the laws of the Commonwealth of Massachusetts, USA, without giving effect to the conflicts of laws provision thereof.  The United Nations Convention on Contracts for the International Sale of Goods (1980) will not apply to the interpretation of this Agreement.  

16.5

Dispute Resolution.  

(a)

In the event of a dispute under this Agreement, the Parties will refer the dispute to the Alliance Managers for discussion and resolution.  If the Alliance Managers are unable to resolve such a dispute within [**] days of the dispute being referred to them, either Party may require that the Parties forward the matter to the Senior Officers (or designees with similar authority to resolve such dispute), who will attempt in good faith to resolve such dispute.  If the Senior Officers cannot resolve such dispute within [**] days of the matter being referred to them, either Party will be free to initiate the arbitration proceedings outlined in Section 16.5(b) below.

(b)

Any unresolved disputes between the Parties relating to, arising out of or in any way connected with this Agreement or any term or condition hereof, or the performance by either Party of its obligations hereunder, whether before or after termination of this Agreement, will be resolved by final and binding arbitration.  Whenever a Party will decide to institute arbitration proceedings, it will give written notice to that effect to the other Party.  Arbitration will be held in Boston, Massachusetts, USA, according to the commercial rules of the International Chamber of Commerce (“ICC”).  The arbitration will be conducted by a panel of three arbitrators appointed in accordance with ICC rules; provided that each Party will within [**] days after the institution of the arbitration proceedings appoint an arbitrator, and such arbitrators will together, within [**] days, select a third arbitrator as the chairman of the arbitration panel, each arbitrator will have significant experience in the biopharmaceutical business.  If the two initial arbitrators are unable to select a third arbitrator within such [**] day period, the third arbitrator will be appointed in accordance with ICC rules.  The arbitrators will render their opinion within [**] days of the final arbitration hearing.  No arbitrator (nor the panel of arbitrators) will have the power to award punitive damages under this Agreement and such award is expressly prohibited; provided, however, that the arbiter may, in its discretion, require the losing Party to pay the reasonable costs and expenses of the prevailing party in connection with such arbitration proceeding.  Decisions of the panel of arbitrators will be final and binding on the

Parties.  Judgment on the award so rendered may be entered in any court of competent jurisdiction.   

16.6

Force Majeure.  In the event that either Party is prevented from performing its obligations under this Agreement as a result of any contingency beyond its reasonable control (“Force Majeure”), including but not limited to, any actions of governmental authorities or agencies, war, hostilities between nations, civil commotions, riots, national industry strikes, lockouts, sabotage, shortages in supplies, energy shortages, fire, floods and acts of nature such as typhoons, hurricanes, earthquakes, or tsunamis, the Party so affected will not be responsible to the other Party for any delay or failure of performance of its obligations hereunder, for so long as Force Majeure prevents such performance.  In the event of Force Majeure, the Party immediately affected thereby will give prompt written notice to the other Party specifying the Force Majeure event complained of, and will use commercially reasonable efforts to resume performance of its obligations.  Notwithstanding the foregoing, if such a Force Majeure induced delay or failure of performance continues for a period of more than three (3) consecutive months, either Party may terminate this Agreement upon written notice to the other Party.

16.7

Waivers and Amendments.  The failure of any Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement will not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition by the other Party.  No waiver will be effective unless it has been given in writing and signed by the Party giving such waiver.  No provision of this Agreement may be amended or modified other than by a written document signed by authorized representatives of each Party.

16.8

Relationship of the Parties.  Nothing contained in this Agreement will be deemed to constitute a partnership, joint venture, or legal entity of any type between AVEO and Novartis, or to constitute one as the agent of the other.  Moreover, each Party will not construe this Agreement, or any of the transactions contemplated hereby, as a partnership for any tax purposes.  Each Party will act solely as an independent contractor, and nothing in this Agreement will be construed to give any Party the power or authority to act for, bind, or commit the other.

16.9

Notices.  All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly given when: (a) delivered by hand (with written confirmation of receipt); or (b) when received by the addressee, if sent by an internationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses set forth below (or to such other addresses as a Party may designate by notice):

16.10

Further Assurances.  Novartis and AVEO will execute, acknowledge and deliver any and all such other documents and take any such other action as may be reasonably necessary to carry out the intent and purposes of this Agreement.

16.11

Compliance with Law.  Each Party will perform its obligations under this Agreement in accordance with all applicable laws.  No Party will, or will be required to, undertake any activity under or in connection with this Agreement which violates, or which it believes, in good faith, may violate, any applicable law.

16.12

No Third Party Beneficiary Rights.  The provisions of this Agreement are for the sole benefit of the Parties and their successors and permitted assigns, and they will not be construed as conferring any rights to any Third Party (including any third party beneficiary rights).

16.13

Expenses.  Except as otherwise expressly provided in this Agreement, each Party will pay the fees and expenses of its respective lawyers and other experts and all other expenses and costs incurred by such Party incidental to the negotiation, preparation, execution and delivery of this Agreement.

16.14

Entire Agreement.  This Agreement, together with its Exhibits and schedules, sets forth the entire agreement and understanding of the Parties as to the subject matter hereof and supersedes all proposals, oral or written, and all other prior communications between the Parties with respect to such subject matter, including the Prior Confidentiality Agreement.  In the event of any conflict between a substantive

provision of this Agreement and any Exhibit or schedule hereto, the substantive provisions of this Agreement will prevail.  

16.15

Counterparts.  This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. Signatures provided by facsimile transmission or in Adobe™ Portable Document Format (.pdf) sent by electronic mail shall be deemed to be original signatures.

16.16

Cumulative Remedies.  No remedy referred to in this Agreement is intended to be exclusive, but each will be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.

NOVARTIS INTERNATIONAL PHARMACEUTICAL LTD.

AVEO PHARMACEUTICALS, INC.

By: /s/ M. Tonesan Amissah                           

By: /s/ Michael P. Bailey                              

Name: M. Tonesan Amissah                           

Name: Michael P. Bailey                              

Title: Alternate Director                                  

Title: President and CEO                              

By: /s/ Simon Zivi                                           

Name: Simon Zivi                                           

Title: Director                                                  

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Sender’s Logo

INVOICE

INVOICE DATE:

Street

__ _________200_

Town,

Country

Phone and Fax Nr.

INVOICE No.: XXXX

Bill To:

For:

Product X Royalties 1st Quarter 2006

(or Milestone for event Y)

P.O. Box HM 2899
Hamilton, HM LX, Bermuda
Attn: Simon Zivi/Laurieann Chaikowsky

And via fax to no. +1 441 296 5083

DESCRIPTION [Please specify the event for which the invoice is due]

AMOUNT (USD)

Product X royalties January - March 200_ calculated based on Novartis provided sales & royalty report (see attached worksheet)

(Or milestone payment for event Y, according to paragraph XY of
agreement ZZZZ dated …..)

Novartis Contract Code

Please remit by wire transfer within 60 days to:

Receiving Bank - …..

Swift Code - …..

ABA Number - …..

Credit Account - …..

Beneficiary - …..

TOTAL

US$ 000’000.00

000’000,00

1.

Definitions

1

2.

Research Licence

7

3.

Commercialisation License

8

4.

Additional Licence Terms

9

5.

Sales-Based and Milestone Payments

11

6.

Further Obligations of EvoGenix

15

7.

Further Obligations of AVEO

16

8.

Term; Termination

17

9.

Infringement of IP Rights

18

10.

Confidentiality

19

11.

Publications and Media Releases

20

12.

Warranties and Representations

22

13.

Insurance

23

14.

Liability and Indemnities

24

15.

Dispute Resolution

27

16.

Notices

27

17.

General

28

18.

Interpretation Principles

30

Schedule 1 - Licensed Intellectual Property

32

Schedule 2 - Milestone Payments

33

Schedule 3 – Sales-Based Payments

35

Schedule 4 - Restricted Targets

36

1.

EVOGENIX PTY LIMITED (ABN 33 097 483 068) of 19-25 Khartoum Road, Macquarie Park, NSW 2113, Australia (“EvoGenix”), and

2.

AVEO PHARMACEUTICALS, INC. of 75 Sidney Street, 4th Floor, Cambridge, MA 02139, United States of America (“AVEO”)

A.

EvoGenix has developed a proprietary technology platform known as ‘Superhumanisation’™  ‘Superhumanised Antibodies’™ and ‘Superhumanising Antibodies’™, which converts a rodent antibody into a “humanised” antibody and has licensed certain intellectual property rights in respect of such technology from EvoGenix Inc. and Arrowsmith Technologies, LLC.

B.

AVEO has expertise in the discovery and development of novel, targeted cancer therapeutics and has developed and wishes to develop certain antibodies.

C.

AVEO wishes to develop an improved version of one or more of those antibodies using the EvoGenix ‘Superhumanisation™’ technology platform and to obtain the necessary rights to commercialise the Superhumanised™ antibodies.

D.

EvoGenix is prepared to license certain intellectual property rights to AVEO on the terms and conditions in this Agreement.

1.

Definitions

(a)

a corporation that is related to a Party as defined in the Corporations Act 2001 (Cth);

(b)

any individual who, or any corporation or other form of business organisation which, in any country directly or indirectly (including through intermediaries), is Controlled by, or is under common Control with, or Controls, a Party; and

(c)

any corporation or other form of business organisation in which any of the above entities directly or indirectly (including through intermediaries) has at least a 40%

ownership interest through stock ownership, voting rights or otherwise, or has the maximum ownership interest it is permitted to have in the country where it exists.

(a)

in relation to an Intellectual Property right, the exercise of all the rights exclusively held by or granted to the holder of such Intellectual Property rights under or by the laws of the jurisdiction in which the Intellectual Property right subsists, including the right to sub-license any and all of those rights;

(b)

in relation to a product, kit, apparatus, substance, documentation or information resource (or any part of such materials), to make, have made, use, distribute, market, sell, offer for sale, import, export, hire out, lease, supply, or otherwise dispose of it; and

(c)

in relation to a method or process, to use or practice the method or process for any purpose, including, without limitation, to make, distribute, market, sell, hire out, lease, supply, or otherwise dispose of a product, kit or apparatus the manufacture, use or sale of which is proposed or intended to involve the exercise of the method or process.

(a)

information which is lawfully in the public domain prior to its disclosure to a Party by the other Party;

(b)

information which enters the public domain otherwise than as a result of an unauthorised disclosure;

(c)

information which is or becomes lawfully available to the recipient Party from a third party who has the lawful power to disclose such information to the recipient Party on a non-confidential basis;

(d)

information which is rightfully known by the recipient Party (as shown by its written record) prior to the date of disclosure; and

(e)

information which has been independently developed by Personnel of the receiving Party without access to or use of such information disclosed by the disclosing Party to the receiving Party.

(a)

the Patent Rights; and/or

(b)

the Know-How.

(a)

trade discounts, rebates or allowances actually allowed and taken with respect to such sales;

(b)

sales returns, credits, discounts or allowances actually allowed and taken including, without limitation:

(i)

amounts paid or credited to Third Party customers for inventory management, distribution, warehousing, and related services to the extent consistent with industry standards;

(ii)

the portion of any management fees paid during the relevant time period to Third Party group purchasing organizations that relate specifically to the sale of such Product to such organization to the extent consistent with industry standards; and

(iii)

any other similar deductions to the extent consistent with industry standards for the purpose of calculating Net Sales;

(c)

freight, shipping and insurance charges;

(d)

taxes, duties or other governmental tariffs (other than income taxes); and

(e)

government mandated rebates.

(a)

the patents and patent applications described in Part A of Schedule 1;

(b)

all patent applications that may be filed which are based on, or claim priority from, or are divided from or are continuations of, any patent application described in Schedule 1;

(c)

all patents which may be granted pursuant to any of the patent applications referred to in the foregoing paragraph (a) or (b); and

(d)

all patents and patent applications covering Improvements licensed to AVEO under this Agreement.

(a)

may not be excluded, restricted or modified; or

(b)

may be excluded, restricted or modified only to a limited extent.

(i)

a protein that is engineered or produced by or on behalf of AVEO using the Licensed Technology, regardless of the intended use of such protein; and/or

(ii)

any composition of matter, chemical entity or other substance based on, derived from or incorporating all or part of any such protein, including without limitation all analogs, homologs of and binding regions derived from any such protein.

2.

Research Licence

2.1

Grant of Research Licence

(a)

under the Patent Rights; and

(b)

under all Intellectual Property in and to the Know-How, for the sole purpose of conducting Research anywhere in the world for the duration of the Term; provided, however, that the license granted under this clause 2.1 shall include the right to humanise murine antibodies using the Licensed Technology only during the Target Designation Period.

2.2

Designated Targets

(a)

At any time during the Target Designation Period, AVEO shall have the right, at its sole discretion, to designate up to [**] Targets as Designated Targets in accordance with this clause 2.2. AVEO shall provide EvoGenix with written notice upon (i) AVEO’s designation of any Target as a Designated Target, and (ii) AVEO’s election to cease conducting Research in respect of any Designated

Target. For clarity, AVEO shall have no obligation to include in any such notice any information concerning the Designated Target, including, without limitation, its identity provided, however, that each Designated Target is given a unique code that correlates with AVEO’s internal records in respect of such Target.

(b)

AVEO may only use the Licensed Technology for conducting Research on a maximum of [**] Designated Targets that have been notified to EvoGenix as set forth in clause 2.2(a); provided, however, that Designated Targets shall not include any Restricted Target. EvoGenix hereby represents and warrants that it is not permitted as of the date of this Agreement to grant to AVEO or other third parties the right to conduct Research with respect to Restricted Targets pursuant to contractual commitments existing or under negotiation as at the Commencement Date.

2.3

Target Designation Period

3.

Commercialisation License

3.1

Notice

3.2

Grant of Commercialisation Licence

(a)

under the Patent Rights; and

(b)

under all Intellectual Property in and to the Know-How, for the sole purpose of Commercialising each such Product in the Commercialisation Field.

3.3

Contract Manufacture

3.4

Covenant Not To Sue

4.

Additional Licence Terms

4.1

Excluded Activities

(a)

altering the pharmacokinetic properties of small molecule drugs, where “small molecule” is defined as any compound with a molecular weight of less than [**]Daltons, or

(b)

neutralization of toxins in victims of animal envenomations.

4.2

Improvements

(a)

Subject to clause 4.2(b) below, all Improvements made by AVEO shall be the sole property of EvoGenix, and AVEO must disclose to EvoGenix such Improvements and execute all documents and do all acts necessary or desirable to assign such Improvements to EvoGenix.

(b)

EvoGenix hereby grants to AVEO a licence to Research and Commercialise the Improvements and any and all Intellectual Property rights in Improvements pursuant to the terms of clauses 2.1 and 3.2, respectively, provided, however, that notwithstanding anything to the contrary herein, no payments under clause 5.2 are to be payable in respect of Sales of Products where such payments apply solely due to, or such Products are made solely according to, Intellectual Property rights licensed under this clause 4.2(b) and no other Licensed Technology.

4.3

AVEO’s Ownership Rights

(a)

tangible products developed by AVEO using the Licensed Technology pursuant to this Agreement;

(b)

AVEO Results, including all Products or other humanised versions of AVEO’s antibodies created using the Licensed Technology pursuant to this Agreement;

(c)

methods of making the items in 4.3(a) and 4.3(b); and

(d)

methods of using the items in 4.3(a) and 4.3(b).

4.4

Sub-Licensing

(a)

AVEO may by written agreement sub-license its rights under clauses 2.1 for the sole purpose of conducting Research with respect to Designated Targets and 3.2 for the Commercialisation of Products in the Commercialisation Field to any Associated Entity of AVEO (apart from the right to further sub-license), without the prior written consent of EvoGenix. AVEO must notify in writing EvoGenix of any such sub-licence, within [**] days of its execution.

(b)

AVEO and its Associated Entities may not sub-license its rights to humanise murine antibodies using the Licensed Technology to any Third Party.

(c)

Subject to its restriction in 4.4(b), AVEO and its Associated Entities may by written agreement sub-license its rights under clause 2.1 and 3.2 for the Research and Commercialisation of Products in the Commercialisation Field to any Third Party, without the prior written consent of EvoGenix; provided that the terms of such sublicense include that all Improvements made by the sublicensee are to be the property of EvoGenix. AVEO must notify in writing EvoGenix of any such sub-licence, within [**] days of its execution.

4.5

Novation

4.6

Conditions of Sub-licence, Subcontract or Novation

5.

Sales-Based and Milestone Payments

5.1

Upfront and Milestone Payment

(a)

Within [**]-days after the execution of this Agreement, AVEO must pay EvoGenix a non-refundable upfront payment of [**] Dollars (US$[**]) in consideration of receiving access to the Know-How for the purposes of conducting Research and the licences granted in clauses 2.1 and3.2.

(b)

AVEO also agrees to pay to EvoGenix the milestone payments set out in Schedule 2 subject to and upon achievement of the milestones set forth in Schedule 2 within [**] days of achievement of such milestones, in consideration of receiving access to the Know-How for the purposes of conducting Research and the licences granted in clauses 2.1 and 3.2.

(c)

All milestone payments are non-refundable.

5.2

Sales-Based Payments

(a)

In further consideration of receiving access to the Know-How for the purpose of conducting Research and the licences granted in clauses 2.1 and 3.2, AVEO agrees to pay to EvoGenix a sales-based payment calculated on Net Sales of Products in accordance with the applicable rates set forth in Schedule 3.

(b)

If AVEO needs to obtain a license under any Third Party patent or patent application in order to Commercialize a Product as a direct result of the fact that the Licensed Technology was used in creation or development of that Product, then [**] percent ([**]%) of any reasonable, arms length consideration paid under such Third Party license shall be fully creditable against sales-based payments payable to EvoGenix under this Agreement in respect of the relevant Quarter; provided that in no event shall the such sales-based payments in any Quarter be reduced by more than [**] percent ([**]%) of the sales-based payments otherwise due in such Quarter, provided further, that any such excess amounts that are not fully credited in such Quarter shall be credited in the subsequent Quarter or Quarters, as applicable, until fully credited.

(c)

Payments are payable by AVEO within [**] days after the end of each Quarter and are to be calculated by reference to Net Sales received during that Quarter. Each payment must be accompanied by a statement signed by an authorised

representative of AVEO showing the price and quantity of Net Sales received during, and the calculation of the amounts payable in respect of, that Quarter.

(d)

The sales-based payments payable under this clause 5.2 commence, on a Product-by-Product and a country-by-country basis, on the first Sale of a Product by AVEO, an Associated Entity of AVEO or any sub-licensees, in a country and continue in such country until the later of:

(i)

once all Patent Rights in that country the Valid Claims of which cover that Product or the manufacture or use of that Product expire, lapse, are found to be invalid or are rejected in an unappealable or unappealed decision;

(ii)

the expiration of all regulatory approvals and exclusive rights granted by a governmental authority in respect of that Product that exclude third parties from promoting and selling generic substitutes for the Product in that country (other than patent rights); and

(iii)

ten years after the first Sale of that Product in that country.

5.3

Records

(a)

Net Sales by it and its Associated Entities, and to require the same of any permitted sub-licensees, sub-contractors and assignees;

(b)

the milestone events set out in Schedule 2, and to require the same of any permitted sub-licensees, sub-contractors and assignees;

(c)

any permitted sub-licence, sub-contracting or assignment agreements; and

(d)

proper and comprehensive books of account relating to all moneys from time to time payable to EvoGenix pursuant to this Agreement and the basis on which the quantum of those payments are calculated.

5.4

Right of Audit

(a)

On EvoGenix’s written request no more than [**], AVEO agrees at all reasonable times to produce the accounts, books and records referred to in clause 5.3 certified as correct by AVEO’s auditors for review at AVEO’s premises at EvoGenix’s expense by an independent accountant nominated by EvoGenix and accepted by

AVEO and to permit that accountant to determine AVEO’s compliance with its payment obligations under this Agreement.

(b)

AVEO agrees to give that accountant reasonable assistance, access and facilities to enable the accountant to verify such accounts, books and records and supply such other information as may be necessary or proper to enable the Net Sales and the amount of sales-based payments to be ascertained and verified.

(c)

If the independent accountant identifies a deviation of at least [**]% from the amounts identified as payable to EvoGenix in statements provided by AVEO pursuant to clause 5.2, the accountant’s reasonable costs are to be reimbursed to EvoGenix by AVEO. Any dispute as to whether a deviation exists shall be resolved pursuant to Section 15.

(d)

On EvoGenix’s written request no more than [**], AVEO agrees at all reasonable times to produce records of the Targets (including their associated codes) on which it has or is conducted research or development utilising all or part of the Licensed Technology, certified as correct by an officer of AVEO for review at AVEO’s premises at EvoGenix’s expense by an independent auditor appointed by EvoGenix and to permit that representative to determine AVEO’s compliance with its obligations under clause 2.2, on the condition that such auditor is bound by a customary confidentiality agreement reasonably acceptable to AVEO and does not disclose to EvoGenix or any third party the identity of such Targets.

5.5

Payment Terms

(a)

All payments made by AVEO to EvoGenix under this Agreement are to be made in U.S. currency and are to be made by bank draft made payable to EvoGenix or direct deposit into the account notified by EvoGenix in writing.

(b)

If AVEO fails to make any payment required under this Agreement in full when due, and AVEO fails to cure such non-payment within [**] days prior written notice from EvoGenix, EvoGenix will be entitled (without prejudice to any other right or remedy it may have) to charge AVEO interest on the overdue amount at the rate equal to the [**] as reported in the Wall Street Journal from the date of invoice to the date of full and final payment (irrespective of whether the date of payment is before or after any judgment or award in respect of the overdue amount).

(c)

If any Net Sales are stated in a currency other than United States Dollars, then, for the purpose of calculating the amount due to EvoGenix hereunder, such Net Sales shall be converted into United States Dollars at the exchange rate between those two currencies most recently quoted in the Wall Street Journal in New York as of the last business day of the Quarter for which such payments under clause 5.2 are payable. If no such exchange rate has been quoted in the Wall Street Journal in New York at any time during the twelve (12) month period preceding the date on which such amount becomes due to EvoGenix, such Net Sales shall be deemed to

be equal to the Net Sales for such Product most recently charged by AVEO in United States Dollars.

(d)

If by reason of applicable laws or regulations in any country, it becomes impossible or illegal for AVEO or its Associated Entities or sublicensees to transfer, or have transferred on its behalf, milestones, sales-based or other payments to EvoGenix, AVEO shall promptly notify EvoGenix of the conditions preventing such transfer and such payments shall be deposited in local currency in the relevant country to the credit of EvoGenix in a recognized banking institution designated by EvoGenix or, if none is designated by EvoGenix within a period of [**] days, in a recognized banking institution selected by AVEO or its Associated Entity or sublicensee, as the case may be, and identified in a notice given to EvoGenix. If so deposited in a foreign country, AVEO shall provide, or cause its Associated Entity or sublicensee to provide, reasonable cooperation to EvoGenix so as to allow EvoGenix to assume control over such deposit as promptly as practicable.

5.6

Taxes

(a)

make such withholding payments as required and subtract such amounts from the payments due to the payee;

(b)

submit proof of payment of the withholding rates to the payee at the time of making payment of the balance to the payee; and

(c)

use efforts consistent with its usual business practices to minimise the extent of any withholding taxes imposed under the provisions of current or future double taxation treaties or agreements between foreign countries and the Parties will cooperate with each other in that respect, with the appropriate Party under the circumstances providing the documentation required under such treaty or agreement to claim any available benefits.

5.7

Consideration for Payments

(a)

the disclosure of the Know-How to AVEO;

(b)

the grant of licences of the Know-How in relation to the Research;

(c)

the grant of licences of the Know-How in relation to Products (if such licences are required);

(d)

the grant of licences of the Patent Rights in relation to the Research; and

(a)

the grant of licences of the Patent Rights in relation to Products (if such licences are required),

6.

Further Obligations of EvoGenix

6.1

Disclosure of Licensed Technology

6.2

Initial Assistance

6.3

Additional Consultancy

(a)

EvoGenix will, subject to payment in accordance with its usual consulting rates from time to time and on its standard consulting terms and conditions from time to time, provide AVEO with training, technical assistance and consultancy services reasonably requested by AVEO in relation to the development, use and Commercialisation of Products, subject to EvoGenix having appropriate resources and qualified personnel to enable it to provide such assistance and services.

(b)

Other than as set out explicitly in this Agreement or otherwise agreed in writing by the parties, AVEO acknowledges that EvoGenix is under no obligation to assist AVEO in the development or Commercialisation of Products or otherwise in connection with the Licensed Technology.

6.4

Prosecute and Maintain Licensed Technology

(a)

prosecute all patent and other applications for statutory protection of the Licensed Technology existing at the Commencement Date; and

(b)

maintain all patents or other rights granted on those applications.

7.

Further Obligations of AVEO

7.1

Standard Operating Procedures

7.2

Optimisation Services

7.3

Non-Solicitation

7.4

Reporting Obligations

(a)

providing the unique codes of all Designated Targets in respect of which AVEO is currently conducting Research;

(b)

providing the unique codes of all Designated Targets in respect of which AVEO has ceased to conducting Research during the previous 12 months;

(c)

describing Products being developed and/or Commercialised, including the number of indications to which each Product is directed to, whether using the same or different Targets;

(d)

describing the progress of development of each Product, included expected timeframes for the product development milestones described in items (g) to (1) of Schedule 2 in respect of each Product and the expected indication(s) for which regulatory approval will be sought; and

(e)

identifying any public disclosures made by or on behalf of AVEO, including disclosures made to any stock exchange or pursuant to securities laws, relating to Designated Targets in respect of which AVEO is currently conducting Research or Products being developed and/or Commercialised.

8.

Term; Termination

8.1

Term

(a)

not designated any Targets as Designated Targets pursuant to clause 2.2 by the end of the Target Designation Period, the Term will expire at the end of the Target Designation Period; or

(b)

failed to meet any milestone described in Items (g) to (1) of Schedule 2 within three years after the end of the Target Designation Period, the Term will expire at the end of that period.

8.2

Termination for Breach

8.3

Consequences of Termination

(a)

Upon expiration of the Term (other than as a result of a termination pursuant to clause 8.2 hereof or expiration by virtue of clause 8.1(a) or 8.1(b)), all licences granted under clauses 2.1 and 3.2 shall survive in perpetuity and, subject to AVEO having made all payments due to EvoGenix under this Agreement in full, shall be deemed to be fully-paid and royalty-free with respect to Products existing as of the date of expiration.

(b)

In the event this Agreement is terminated by EvoGenix pursuant to clause 8.2 in respect of a breach by AVEO prior to payment of the amounts specified in clause 5.1(a) and Item (b) of Schedule 2, AVEO must pay such amounts within [**]Business Days of termination of this Agreement.

(c)

If EvoGenix terminates this Agreement pursuant to clause 8.2 in respect of a breach by AVEO of its payment obligations under clause 5.1 or 5.2 in respect of one or more Products, AVEO’s rights and licences under clauses 2.1 and 3.2 shall:

(i)

terminate in respect of that Product or Products, provided, however, that EvoGenix may in its sole discretion elect in writing to continue to give AVEO the benefit of all licences granted to it under clauses 2.1 and 3.2 (if any) in respect of that Product, subject to clauses 5.1 and 5.2; and

(ii)

survive in respect of all other Products, together with the provisions of Article 4, subject only to AVEO’s compliance with its payment obligations under Article 5.

(d)

If (i) EvoGenix terminates this Agreement pursuant to clause 8.2 in respect of a breach by AVEO of any provision other than clause 5.1 or 5.2, (ii) this Agreement expires by virtue of clause 8.1(a) or 8.1(b), or (iii) AVEO terminates pursuant to clause 8.2, then the rights and licences of AVEO under clauses 2.1,3.2, 3.4,4.2(b) and 4.4 shall survive, together with the other provisions of Article 4, subject only to AVEO’s compliance with its payment obligations under Article 5.

8.4

Survival of Provisions

9.

Infringement of IP Rights

9.1

Notice of Suspected Infringements

9.2

Action by EvoGenix

9.3

AVEO may Join Action

9.4

Notice of Third Party Claims

(a)

the Party threatened or sued must immediately notify the other Party; and

(b)

the Parties will refer the matter to leading legal counsel for advice on whether a defence or threats action will have a reasonable chance of a successful outcome and whether there are circumstances making it imprudent to defend or commence proceedings.

9.5

Limited Obligation to Defend

10.

Confidentiality

10.1

Permitted Use and Disclosure

(a)

AVEO may use and disclose Confidential Information contained in the Licensed Technology to the extent that such use or disclosure is necessary or appropriate for the conduct of the Research or the pursuit of the Commercialisation of the Products in accordance with AVEO’s rights under this Agreement.

(b)

A Party may disclose Confidential Information of the other Party if legally compelled to do so by any judicial or administrative body, provided that the Party required to make such disclosure must promptly inform the other Party and take all reasonably available legal measures to avoid or limit the extent of such disclosure.

10.2

Protection of Confidential Information

(a)

not use, and shall ensure that its Personnel do not use, any Confidential Information of the other Party for any purpose other than in the exercise of its rights and in compliance with its obligations under this Agreement;

(b)

take all reasonable action necessary to maintain the confidential nature of the Confidential Information of the other Party;

(c)

not disclose any of the Confidential Information of the other Party to any person other than those Personnel of the Party or an Associated Entity who need to have access to the Confidential Information, or permitted contract manufacturers or sublicensees, for the conduct of the Research and/or to Commercialise Products in accordance with this Agreement and who have been made aware of the requirements of this clause and who are subject to a legally enforceable undertaking of confidence; and

(d)

return all documents and other materials in any medium in its possession, power or control which constitute Confidential Information of the other Party, (i) with respect to Confidential Information of AVEO, on the earlier of demand by AVEO or the expiration or termination of this Agreement and (ii) with Respect to Confidential Information of EvoGenix forming part of the Know-How, upon the termination of the licenses granted to AVEO under this Agreement and (iii) with respect to all other Confidential Information of EvoGenix, on demand by EvoGenix or on the expiration or termination of this Agreement, whichever occurs later.

10.3

Terms of Agreement

11.

Publications and Media Releases

11.1

Submission of Publications

11.2

Grounds for Objection

11.3

Publications

11.4

Media Releases

(a)

The Parties may make a joint media release regarding the execution of this Agreement, the final form of which will be subject to approval of the Parties prior to its release to the public.

(b)

For subsequent media releases and other written public disclosures relating to this Agreement or the Parties’ relationship under this Agreement (“release”), each Party must:

(i)

submit to the other Party a draft of such release for review and comment by the other Party at least [**] full Business Days prior to the date on which such Party plans to transmit such release; and

(ii)

not make such release without the other Party’s consent, such consent not to be unreasonably withheld or delayed, provided that subsequent to the initial media release, each Party may routinely make reference to the existence of and general progress achieved under this Agreement, but not disclose other Confidential Information not previously approved under this clause 11.4, for the purposes of its normal reporting to customers, investors and the market.

(c)

If a Party is unable to comply with the foregoing [**] day notice requirement because of a legal obligation or stock exchange requirement to make more rapid disclosure, such Party will not be in breach of this Agreement by virtue of such noncompliance, but will in that case give telephone notice to a senior executive of the other Party and provide a draft disclosure with as much notice as possible prior to the release of such release.

(d)

A Party may publicly disclose without regard to the preceding requirements of this clause information that was previously disclosed in a release that was in compliance with such requirements.

12.

Warranties and Representations

12.1

Mutual Warranties

(a)

it has the power and authority to enter into and perform its obligations under this Agreement and that the execution of this Agreement by it has been duly and validly authorised by all necessary corporate action;

(b)

its obligations under this Agreement are valid and binding and enforceable against it in accordance with their terms;

(c)

this Agreement and its performance do not contravene its constituent documents or any law, or any of its obligations or undertakings by which it is bound, or cause a limitation on the powers of its corporate officers to be exceeded;

(d)

it has the resources, skills, knowledge and abilities necessary to perform its obligations under this Agreement.

12.2

EvoGenix’s Warranties

(a)

it has not granted, and agrees that it shall not grant, to any person any licence to Commercialise Licensed Technology which conflicts with the licences granted in clauses 2 and 3,

(b)

EvoGenix has all right and title necessary to grant the licenses granted in this Agreement,

(c)

EvoGenix has lawful access to and the right to use the technology necessary to perform its obligations hereunder,

(d)

(i) the patents and patent applications listed under Item (A) of Schedule 1, (ii) all patent applications that may be filed which are based on, or claim priority from, or are divided from or are continuations of any of the foregoing, and (iii) all patents which may be granted pursuant to any of the foregoing, constitute all patents and patent applications Controlled by EvoGenix and/or any its Associated Entities that cover or relate to EvoGenix’s proprietary technology platform known as ‘Superhumanisation™’, ‘Superhumanised Antibodies’™ and ‘Superhumanising Antibodies’ ™ or the Know-How provided to AVEO hereunder; and

(e)

EvoGenix is not subject to any claim or notice of infringement or misappropriation of any Third Party Intellectual Property rights relating to the Licensed Technology.

12.3

AVEO’s Warranties

12.4

Limits on Warranties

(a)

EvoGenix does not warrant that any Patent Rights are or will be valid.

(b)

Each Party acknowledges that research is uncertain, and neither Party gives to the other any warranty or assurance that the conduct of Research using the Licensed Technology will have any particular result, or give rise to any particular product or item of Intellectual Property, or any product having any particular performance or characteristics.

13.

Insurance

13.1

AVEO to Maintain Insurance

(a)

death of, or bodily injury (including disease or illness) to, any person; and

(b)

loss of, or damage to, property,

13.2

Sub-Contractors and Sub-Licensees

13.3

Evidence of Currency

13.4

Potential Claims

(a)

notify EvoGenix as soon as reasonably practicable but in any event within [**] Business Days of the occurrence of that event; and

(b)

ensure that EvoGenix is kept fully informed of any subsequent actions and developments concerning the relevant claim.

13.5

Failure to Insure

14.

Liability and Indemnities

14.1

Exclusions

(a)

NEITHER PARTY SHALL HAVE ANY LIABILITY TO THE OTHER PARTY, HOWEVER ARISING AND UNDER ANY CAUSE OF ACTION OR THEORY OF LIABILITY, IN RESPECT OF SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, LOSS OF PROFIT OR LOSS OF BUSINESS OPPORTUNITY.

(b)

NOTWITHSTANDING THE FOREGOING, THE LIMITATIONS SET FORTH IN THIS CLAUSE 14.1 SHALL NOT APPLY WITH RESPECT TO (i) INDEMNIFICATION OBLIGATIONS OF EVOGENIX UNDER CLAUSE 14.4(d) WITH RESPECT TO THIRD PARTY CLAIMS FOR THE DAMAGES DESCRIBED IN SECTION 14.1(a), WHERE EVOGENIX KNEW AVEO’S USE OF THE KNOW-HOW OR PRACTICE UNDER THE PATENT RIGHTS INFRINGED THE INTELLECTUAL PROPERTY RIGHTS OF THE THIRD PARTY (ii) BREACH OF OBLIGATIONS UNDER CLAUSE 10 HEREOF (iii) THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF A PARTY, OR (iv) TO THE EXTENT PROHIBITED BY APPLICABLE LAW.

14.2

No Implied Warranties

(a)

Except as set forth in this Agreement or as required by any Prescribed Terms, all warranties implied by law relating to the performance of EvoGenix’s obligations under this Agreement are excluded.

(b)

Without limiting any other provision of this Agreement (including, without limitation, any express representation or warranty hereunder), where any Prescribed Terms apply, the liability of EvoGenix to AVEO for a breach of a Prescribed Term implied into this Agreement is limited, at the option of EvoGenix, to the repair or replacement of the goods, the cost of repairing or replacing the goods, the re-supply of those services or the payment of the cost of re-supplying those services.

14.3

AVEO’s Indemnity

(a)

a breach of AVEO’s warranties or obligations contained in this Agreement;

(b)

the failure of any of AVEO’s Personnel to use reasonable care in carrying out AVEO’s obligations under this Agreement; or

(c)

death of or personal injury to persons or property damage arising out of the use of the Commercialisation of Products, except where such death or personal injury or property damages arises from the negligence or misconduct of EvoGenix’s Personnel; or

(d)

except for claims covered by clause 14.4(d) below, infringement of Intellectual Property rights of Third Parties arising out of the Commercialisation of Products by AVEO, its Associated Entities and any sub-licensees. and from and against all damages, reasonable costs and expenses incurred in satisfying, defending or settling any such claim, proceeding or demand.

14.4

EvoGenix’s Indemnity

(a)

a breach of EvoGenix’s warranties or obligations contained in this Agreement;