UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

Amendment No. 1

(Mark One)

For the quarterly period ended September 30, 2018

OR

From the transition period from                      to                     .

Commission File Number 001-36076

FATE THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

(858) 875-1800

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of October 30, 2018, 64,518,813 shares of the registrant’s common stock, par value $0.001 per share, were issued and outstanding.

EXPLANATORY NOTE

Fate Therapeutics, Inc. (the “Company”) is filing this Amendment No. 1 on Form 10-Q/A (this “Amendment”) to its Quarterly Report on Form 10-Q for the period ended September 30, 2018 (the “Original Report”), which was originally filed with the Securities and Exchange Commission (the “SEC”) on November 1, 2018, solely to re-file Exhibit 10.2 that was previously filed with the Original Report with revised redactions in response to comments received from the staff of the SEC regarding the confidential treatment request filed by the Company with respect to certain portions of Exhibits 10.1 and 10.2 of the Original Report.

This Amendment does not change the previously reported financial statements or, except as expressly described in the prior paragraph, any of the other disclosure contained in the Original Report. This Amendment speaks as of the original filing date of the Original Report and does not reflect any events that occurred at a date subsequent to the filing of the Original Report or modify or update those disclosures therein in any way. Accordingly, this Amendment should be read in conjunction with the Company’s filings made with the SEC subsequent to the filing of the Original Report.

As required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certifications by the Company’s principal executive officer and principal financial officer are being filed herewith as exhibits to this Amendment (Exhibit 31.2). The Company is not including certifications pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as no financial statements are being filed with this Amendment.

Item 6. Exhibits

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Exhibit 10.2

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WERE OMITTED AND REPLACED WITH “[***]”.

A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL

TREATMENT UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934.

COLLABORATION AND OPTION AGREEMENT

BY AND BETWEEN

FATE THERAPEUTICS, INC.

AND

ONO PHARMACEUTICAL CO., LTD.

DATED

SEPTEMBER 14, 2018

TABLE OF CONTENTS

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

COLLABORATION AND OPTION AGREEMENT

THIS COLLABORATION AND OPTION AGREEMENT (the “Agreement”) is made and entered into as of September 14, 2018 (the “Effective Date”), by and between FATE Therapeutics, Inc., a Delaware corporation located at 3535 General Atomics Court, Suite 200, San Diego, California 92121, United States of America (“FATE”), and Ono Pharmaceutical Co., Ltd., 8-2, Kyutaromachi 1-chome, Chuo-ku, Osaka, Osaka 541-8564, Japan (“ONO”). FATE and ONO are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

RECITALS

WHEREAS, FATE has research, development and manufacturing expertise regarding hematopoietic cell therapeutics, including T-cell therapeutics derived from engineered master induced pluripotent stem cell (iPSC) lines;

WHEREAS, ONO possesses research, development, and commercialization expertise for research, development and commercialization of pharmaceutical products in the field of oncology, including monoclonal antibody therapy;

WHEREAS, ONO and FATE desire to conduct research, development and manufacturing activities to discover and develop chimeric antigen receptor (CAR)-targeted T-cell therapeutics, where such CAR-targeted T-cell therapeutics are derived from engineered master iPSC lines;

WHEREAS, ONO desires to have an option to obtain an exclusive license to develop and commercialize certain CAR-targeted T-cell therapeutics in the Field (as defined below) in specific territories and, upon exercise of such option by ONO, FATE is willing to grant to ONO such rights on the terms and conditions set forth herein; and

WHEREAS, FATE desires to retain the right to manufacture the CAR-targeted T-cell therapeutics for which ONO may obtain the rights as described above, and to have an option to obtain the right to (co-)develop and (co-)commercialize with ONO certain CAR-targeted T-cell therapeutics for which ONO may obtain the rights as described above in specific territories.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements set forth below, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

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

1.1    “Affiliate” of a Party means any Person that directly or indirectly is controlled by, controls or is under common control with a Party. For the purposes of this definition, the term “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) as used with respect to a Person means (a) in the case of a corporate entity,

(i) direct or indirect ownership of more than fifty percent (50%) of the voting securities or capital stock of such entity or (ii) possession, directly or indirectly, of the power to direct the management and policies of such entity, as applicable, whether through the ownership or control of voting securities, by contract or otherwise or (b) in the case of a non-corporate entity, (i) direct or indirect ownership of more than fifty percent (50%) of the equity interests of such entity or (ii) possession, directly or indirectly, of the power to direct the management and policies of such entity, whether through the ownership or control of voting securities, by contract or otherwise; provided that, if local Laws restrict foreign ownership, control shall be established by direct or indirect ownership of the maximum ownership percentage that may, under such local Laws, be owned by foreign interests.

1.2    “Agreement” has the meaning set forth in the Preamble.

1.3    “Allocable Overhead” means reasonable costs related to the Common Development Activity under the Joint Development Plan including all personnel, equipment, utilities, consumables, materials, reagents and all other expenses for support staff relating to performance of Common Development Activities by each Party pursuant to the Joint Development Plan to the extent reasonably attributable to supervision, occupancy costs and supporting services and that are allocated among company departments and projects based on an appropriate factor, such as space occupied, headcount or an activity-based method; provided, that “Allocable Overhead” shall not include Out-of-Pocket Expenses and any costs attributable to general corporate activities, such as executive management, investor relations, business development, legal affairs or finance.

1.4    “Antigen Binding Domain” means an extracellular target binding domain derived from a single-chain variable fragment (scFv) of a monoclonal antibody (or from other sources, such as Fab libraries or invariant human ligands).

1.5    “Annual Net Sales” means the Net Sales generated over any given Calendar Year.

1.6    “Asia” means Japan, Korea, Taiwan, People’s Republic of China, Hong Kong, Singapore, Macao, Malaysia, Myanmar, Indonesia, Philippines, East Timor, Thailand, Vietnam, Laos, and Cambodia.

1.7    “Biosimilar Product” means, with respect to a Collaboration Product and on a country- by-country basis, a product that (a) is marketed for sale in such country by a Third Party (not licensed, supplied or otherwise authorized by a Party or its Affiliates or Sublicensees); (b) [***].

1.8    “BLA” means a Biologics License Application, or similar application that is submitted to the FDA, or a foreign equivalent of the FDA, for marketing approval of a Collaboration Product in a given jurisdiction.

1.9    “BLA Approval” means the Marketing Approval of a BLA by the FDA for a Collaboration Product in the United States, or a foreign equivalent of the FDA for a Collaboration Product in the applicable jurisdiction.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

1.10    “Business Day” means a day other than (a) Saturday, Sunday or any day on which commercial banks located in New York, New York are authorized or obligated by Laws to close in case of any obligations of FATE hereunder, and (b) Saturday, Sunday, other national holidays in Japan or ONO’s corporate holidays in case of any obligations of ONO hereunder; provided, that ONO shall have appropriately provided FATE with any such relevant corporate holidays at least one (1) month in advance.

1.11    “Calendar Quarter” means the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31; provided, however, that (a) the first Calendar Quarter of any particular period shall extend from the commencement of such period to the end of the first complete Calendar Quarter thereafter; and (b) the last Calendar Quarter shall end upon the effective date of the expiration or termination of this Agreement.

1.12    “Calendar Year” means (a) for the first Calendar Year of the Term, the period beginning on the Effective Date and ending on December 31, 2018, (b) for each Calendar Year of the Term thereafter, each successive period beginning on January 1 and ending twelve (12) consecutive calendar months later on December 31, and (c) for the last Calendar Year of the Term, the period beginning on January 1 of the Calendar Year in which this Agreement expires or terminates and ending on the effective date of expiration or termination of this Agreement.

1.13    “CDCC Term” means, with respect to each of the U.S. or Europe and with respect to [***], the period of time commencing on FATE’s exercise of the CDCC Option and ending on the earlier of [***].

1.14    “Change of Control” means the occurrence of any of the following:

(a)    A Party entering into a merger, consolidation, stock sale or sale or transfer of all or substantially all of its assets, or other similar transaction or series of transactions with another entity, unless, following such transaction or transactions, (i) the individuals and entities who were the beneficial owners of the outstanding voting securities of such Party immediately prior to such transaction beneficially own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then outstanding voting securities of the corporation or other entity resulting from such transaction (“Successor”) in substantially the same proportions as their ownership immediately prior to such transaction of such outstanding voting securities, and (ii) more than fifty percent (50%) of the members of the Board of Directors or similar governing body of the Successor were members of the Board of Directors of such Party at the time of the execution of the initial agreement regarding such transaction or transactions, or the action of the Board of Directors of such Party, governing such transaction; or

(b)    any transaction or series of related transactions in which any person or entity or group of persons or entities acquires beneficial ownership of securities of a Party representing more than fifty percent (50%) of the combined voting power of the then outstanding securities of such Party.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

1.15    “Chimeric Antigen Receptor” or “CAR” means a recombinant synthetic modular fusion protein receptor that comprises an Antigen Binding Domain, a spacer domain, a transmembrane domain, and an intracellular signaling domain (such as a domain containing immunoreceptor tyrosine-based activation motifs (ITAMs)).

1.16    “Clearance Date” means the date on which the following conditions are met with respect to a Competition Law Filing under Section 13.13 (Competition Law Filings): (a) the waiting period under the HSR Act or other applicable Competition Law shall have expired or earlier been terminated; (b) no injunction (whether temporary, preliminary or permanent) prohibiting effectiveness of exercise of the ONO Option or the Opt-Out, as applicable, shall be in effect; (c) no judicial or administrative proceeding opposing such effectiveness shall be pending; and (d) no requirements or conditions shall have been imposed by the DOJ, FTC or other applicable governmental authority in connection with such Competition Law Filing, other than requirements or conditions that are satisfactory to the Party on whom such requirements or conditions are imposed.

1.17    “Clinical Trials” means Phase I Trials, Phase II Trials, Phase III Trials, Phase IV Trials, and/or variations of such trials (for example, phase II/III studies).

1.18    “Co-Development and Co-Commercialization Option Period” or “CDCC Option Period” means, with respect to [***], the period beginning on [***] with respect to [***] and ending [***].

1.19    “Collaboration” means the Research, Development and Commercialization activities conducted by the Parties pursuant to this Agreement.

1.20    “Collaboration Candidate” means, as applicable, either Collaboration Candidate 1, Collaboration Candidate 2, or where referred to collectively, both Collaboration Candidate 1 and Collaboration Candidate 2.

1.21    “Collaboration Candidate 1” means a CAR-targeted T-lymphocyte therapeutic derived from a master iPSC line and generated under the Joint Development Plan, where such master iPSC line is engineered to [***], for which FATE is conducting Research and Development under the Joint Development Plan and for which: (a) ONO has not exercised the ONO Option pursuant to Section 2.4.3 (Option Exercise); and (b) the applicable ONO Option Period has not expired.

1.22    “Collaboration Candidate 2” means a CAR-targeted T-lymphocyte therapeutic derived from a master iPSC line and generated under the Joint Development Plan, where such master iPSC line is engineered to [***], for which FATE is conducting Research and Development under the Joint Development Plan and for which: (a) ONO has not exercised the ONO Option pursuant to Section 2.4.3 (Option Exercise); and (b) the applicable ONO Option Period has not expired.

1.23    “Collaboration Candidate Selection Criteria” means the criteria necessary to support ONO’s decision as to whether to exercise the ONO Option for each Collaboration Candidate, as set forth in Exhibit 1.23 (Collaboration Candidate Selection Criteria) and as may be updated from time to time pursuant to Section 2.4.2(a) (Option Exercise Criteria). For the avoidance of doubt, Exhibit 1.23 (Collaboration Candidate Selection Criteria) provides the specific Collaboration Candidate Selection Criteria for Collaboration Candidate 1 and for Collaboration Candidate 2.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

1.24    “Collaboration Product” means, as applicable, either Collaboration Product 1, Collaboration Product 2, or where referred to collectively, both Collaboration Product 1 and Collaboration Product 2.

1.25    “Collaboration Product 1” means a product, pharmaceutical preparation, or formulation containing, as its active ingredient, Collaboration Candidate 1 (including any Combination Product containing Collaboration Candidate 1), provided that ONO has exercised the ONO Option pursuant to Section 2.4.3 (Option Exercise) prior to the expiration of the ONO Option Period for Collaboration Candidate 1.

1.26    “Collaboration Product 2” means a product, pharmaceutical preparation, or formulation containing, as its active ingredient, Collaboration Candidate 2 (including any Combination Product containing Collaboration Candidate 2), provided that ONO has exercised the ONO Option pursuant to Section 2.4.3 (Option Exercise) prior to the expiration of the ONO Option Period for Collaboration Candidate 2.

1.27    “Combination Product” means a Collaboration Product that includes (a) a Collaboration Candidate and (b) at least one (1) additional therapeutically active pharmaceutical ingredient other than a Collaboration Candidate incorporated in any Collaboration Product. To be a Combination Product, all ingredients (including without limitation the drug substance) shall be presented together in the same therapeutic formulation or as part of a co-packaged and/or label- directed combination therapy as a single product and invoiced as one (1) product. Except for those drug delivery vehicles, adjuvants or excipients that are recognized by the FDA or any foreign equivalent as active ingredients, drug delivery vehicles, adjuvants and excipients are hereby deemed not to be “therapeutically active pharmaceutical ingredients,” and their presence shall not be deemed to create a Combination Product for purposes of this Section 1.27 (Combination Product).

1.28    “Commencement” or “Commence” means, when used with respect to Clinical Trials, the dosing of the first human patient with the first dose in such Clinical Trials and, with respect to IND Enabling Studies, the start of the first of such studies.

1.29    “Commercialization” or “Commercialize” or “Commercial” means activities conducted by, or on behalf of, a Party (including by its Affiliates or its Sublicensees) that are directed to commercial manufacturing and supply, obtaining pricing and reimbursement approvals, marketing, promoting, distributing, importing, exporting, offering for sale or selling a Collaboration Product, and carrying out Phase IV Trials or other Clinical Trials conducted for the purpose of market expansion, each commenced after First Commercial Sale of a Collaboration Product anywhere in the world.

1.30    “Commercialization Plan” means, with respect to a Collaboration Product, a plan that details the Commercialization activities to be conducted (a) by ONO in the applicable ONO Territory for both Collaboration Product 1 and Collaboration Product 2, (b) by FATE in the FATE Territory for Collaboration Product 1 and (c) by both Parties in the [***] Territory with respect to [***] during the CDCC Term, in each case including a budget with respect to any activities for which the Parties will share costs and expenses incurred in connection therewith.

1.31    “Commercially Reasonable Efforts” means, as to (a) [***], or (b) [***], efforts consistent with the efforts and resources normally used by ONO or FATE, as applicable, in the exercise of its reasonable business discretion relating to the research, development or commercialization of a product that is [***].

1.32    “Committee” means each of the JSC and/or any subcommittees created by the JSC pursuant to Section 4.1.5(d) (Role Following the Exercise of the ONO Option).

1.33    “Competitive Product” means as applicable, either Competitive Product 1, Competitive Product 2, or where referred to collectively, both Competitive Product 1 and Competitive Product 2.

1.34    “Complete” means, when used with respect to a Clinical Trial, the date on which the Party conducting such Clinical Trial completes the statistical analysis and delivers a report to the JSC of such statistical analysis for such Clinical Trial.

1.35    “Confidential Information” means all trade secrets, processes, formulae, data, Know- How, improvements, inventions, chemical structures, CAR constructs, techniques, marketing plans, strategies, customer lists, or other information that has been created, discovered, or developed by a Party or its Affiliates, or has otherwise become known to a Party or its Affiliates, or to which rights have been assigned to a Party or its Affiliates, as well as any other information and Materials that are deemed confidential to or by a Party or its Affiliates (including without limitation all information and Materials embodying such information of a Party’s or its Affiliates’ customers and any other Third Party and their consultants), in each case that are disclosed or communicated by such Party or its Affiliates to the other Party or its Affiliates, and marked “confidential” or “proprietary”, whether such disclosure or communication is in oral, written, graphic, or electronic form. If the Confidential Information is disclosed orally, visually or in other intangible form, it shall be identified as confidential at the time of disclosure and reduced to a written summary marked “confidential” or “proprietary” to be prepared by the Disclosing Party and delivered to the Receiving Party within thirty (30) days after such disclosure. Notwithstanding the foregoing, the following shall be deemed Confidential Information of the Disclosing Party regardless of whether such information is marked “confidential” or “proprietary” or reduced to writing if disclosed orally, visually or in other intangible form: information exchanged between the Parties, either from Committee discussions or through the Alliance Liaison, or [***].

1.36    “Controlled” or “Control” means, when used in reference to Know-How, Patents, Confidential Information, or intellectual property rights, the legal authority or right (either by ownership or license) of a Party (or any of its Affiliates) to grant a license or sublicense of such Know-How, Patents, or intellectual property rights to the other Party, or to otherwise disclose such Know-How, Patents or Confidential Information to such other Party, without breaching the terms of any agreement with a Third Party, or misappropriating such Know-How, Patents or Confidential Information of a Third Party.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

1.37    “Development” means all non-clinical, pre-clinical and clinical drug development activities conducted under the Joint Development Plan reasonably relating to advancing (a) Collaboration Candidate(s) during the Research Term, and (b) subject to the exercise by ONO of the ONO Option in accordance with Section 2.4.3 (Option Exercise), Collaboration Product(s) during the Term. Development shall include, without limitation, [***]. Development excludes all Commercialization activities. When used as a verb, “Develop” means to engage in Development.

1.38    “Dollar” or “$” means the lawful currency of the United States.

1.39    “Effective Date” has the meaning set forth in the Preamble.

1.40    “EMA” means the European Medicines Agency, or any successor agency thereto.

1.41    “Europe” or “EU” means (a) the countries that are members of the European Union as of the Effective Date of this Agreement or that become members of the European Union thereafter, (b) the United Kingdom, including England, Northern Ireland, Scotland, and Wales and (c) Switzerland.

1.42    “Executive Officers” means the Chief Executive Officer of FATE and the Executive Director of Discovery and Research of ONO.

1.43    “FATE” has the meaning set forth in the Preamble.

1.44    “FATE CDCC Territory” means the United States and Europe, but excluding any Opt- Out Territory.

1.45    “FATE Cell Therapy” means (a) any Collaboration Candidate and Collaboration Product for which this Agreement is terminated [***] and (b) all Collaboration Candidates and Collaboration Products if this Agreement is terminated in its entirety (i) [***].

1.46    “FATE Intellectual Property” means the FATE Patents, the FATE Know-How and FATE’s interest in Joint Inventions and Joint Patents, subject to Section 7.10.2 (FATE Platform Improvement).

1.47    “FATE Know-How” means (a) all Know-How Controlled by FATE or its Affiliates as of the Effective Date; (b) all Know-How Controlled by FATE or its Affiliates at any time during the Term [***] and (c) [***], that is primarily and directly related to and/or reasonably necessary or useful for the identification, research, manufacture, formulation, delivery, packaging, use, Development and/or Commercialization of any of the Collaboration Candidates and/or Collaboration Products by ONO, or its Affiliates or Sublicensees, or a Third Party doing any of the foregoing on ONO’s behalf.

1.48    “FATE Patents” means any and all (a) Patents Controlled by FATE or its Affiliates as of the Effective Date which are set forth on Exhibit 1.48 (FATE Patents); (b) Patents Controlled by FATE or its Affiliates at any time during the Term [***] and (c) [***] and/or (ii) would be infringed, without a license granted hereunder, by the identification, research, manufacture, formulation, delivery, packaging, use, Development and/or Commercialization of any of the Collaboration Candidates or Collaboration Products by ONO, or its Affiliates or Sublicensees, or a Third Party doing any of the foregoing on ONO’s behalf.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

1.49    “FATE Platform Technology” means FATE’s proprietary technology related to: [***].

1.50    “FATE Territory” means (a) [***], all Territories other than Asia; and (b) [***], the FATE CDCC Territory during the CDCC Term or, subject to ONO’s election in Section 2.3.5 (Alternative Antigen Binding Domain) of Asia, all Territories other than Asia.

1.51    “FDA” means the U.S. Food and Drug Administration, or any successor agency thereto.

1.52    “Field” means all applications for diagnostic, therapeutic, prognostic and prophylactic uses in humans, including the Oncology Field.

1.53    “First Commercial Sale” means, with respect to any Collaboration Product, the first sale to a Third Party of such Collaboration Product in any country in the ONO Territory for ONO or in the FATE Territory for FATE, as the case may be, after Regulatory Approval of such Collaboration Product has been granted, or such marketing and sale is otherwise permitted, by the Regulatory Authority of such country, excluding registration samples, compassionate use, and use in Phase IV Trials or Investigator Sponsored Clinical Study for which no payment has been received.

1.54    [***].

1.55    “Full Time Equivalent” or “FTE” means the equivalent of the work of one employee full time during one (1) full year of work for the Common Development Activities in accordance with the Joint Development Plan.

1.56    “FTE Costs” means the amount calculated by multiplying the FTE Rate by the number of FTEs to be put on the conduct of any study or Clinical Trial of Common Development Activities.

1.57    “FTE Rate” means the price of the work per FTE per year, and shall cover all Allocable Overhead relating to performance of Common Development Activities by each Party pursuant to the Joint Development Plan.

1.58    “GAAP” means generally accepted accounting principles in the United States, consistently applied.

1.59    “Good Clinical Practices” or “GCP” means the standards, practices and procedures set forth in the guidelines entitled in “Good Clinical Practice: Consolidated Guideline,” including without limitation related regulatory requirements imposed by the FDA or (as applicable) any equivalent or similar standards in jurisdictions outside the United States, to the extent that such standards are applicable in the jurisdiction in which the relevant Clinical Trial is conducted or required to be followed in the jurisdiction in which Regulatory Approval of a Collaboration Product will be sought and “ICH HARMONISED TRIPARTITE GUIDELINE”.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

1.60    “Good Laboratory Practices” or “GLP” means the regulations set forth in 21 C.F.R. Part 58 and the requirements expressed or implied thereunder imposed by the FDA or (as applicable) any equivalent or similar standards in jurisdictions outside the United States.

1.61    “Good Manufacturing Practices” or “GMP” means (a) the regulations set forth in 21 C.F.R. Parts 210–211, 820 and 21 C.F.R. Subchapter C (Drugs), Quality System Regulations and the requirements thereunder imposed by the FDA, (b) EC Directive 2003/94/EC and applicable EMA guidance documents, (c) any similar or equivalent regulations and requirements in Japan and (d) any similar or equivalent regulations or requirements in other jurisdictions that the Parties agree in writing to include.

1.62    “IFRS” means the International Financial Reporting Standards.

1.63    “IND” means any Investigational New Drug application, as defined in the United States Federal Food, Drug and Cosmetics Act, as amended from time to time, and the regulations promulgated thereunder, filed with the FDA pursuant to Part 312 of Title 21 of the U.S. Code of Federal Regulations, including any amendments thereto. References herein to IND shall include, to the extent applicable, any comparable filing(s) outside the United States (such as a CTA in the European Union) necessary to Commence Clinical Trials.

1.64    “IND Enabling Studies” means studies comprising pre-clinical studies on Collaboration Candidates and Collaboration Products, conducted under GLP, the protocol and results of which are intended to be used to support an IND, including, but not limited to PK/ADME studies, potency studies, pharmacodynamics, safety, toxicology, pharmacology, pre-formulation, and formulation development.

1.65    “Indication” means any disease or condition classified as a three-character category in International Statistical Classification of Diseases and Related Health Problems (or “ICD”) 10- CM published by the World Health Organization, that a Collaboration Product is intended to be used to diagnose, treat or prevent, which use is the subject of a separate Regulatory Filing to support a Regulatory Approval for such use. [***].

1.66    “Issuance of BLA Filing Letter” means acceptance of the complete BLA filing by FDA or a foreign equivalent of the FDA for review of a Regulatory Filing for Regulatory Approval or Marketing Approval, or any action or inaction having the equivalent effect in the future as a result of any changes in the regulations governing the process of such filing and acceptance.

1.67    “Investigator Sponsored Clinical Study” means a clinical study or research of a Collaboration Product that is sponsored and conducted by a physician, physician group or other Third Party not acting on behalf of a Party, its Affiliates or Sublicensee and who does not have a license from a Party or its Affiliates or Sublicensee to Commercialize such Collaboration Product, pursuant to an IND owned by such Third Party in the case of a Clinical Trial, and with respect to which a Party or its Affiliates or Sublicensee provides clinical supplies of the Collaboration Product, funding or other support for such clinical study or research.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

1.68    “Joint Development Plan” means a plan that details all Research and Development activities to be conducted pursuant to this Agreement with respect to (a) Collaboration Candidate(s) during the respective Research Term, and (b) subject to the exercise by ONO of the ONO Option in accordance with Section 2.4.3 (Option Exercise), Collaboration Product(s) in the ONO Territory and the FATE Territory during the Term. The Joint Development Plan shall include any Common Development Activities in and outside the ONO Territory, in each case including a budget with respect to any activities for which the Parties will share costs and expenses incurred in connection therewith. The Joint Development Plan for the activities to be conducted during the first twelve (12) months of the Research Term is set forth on Exhibit 1.68 (Joint Development Plan) and will be amended to include the activities of subsequent periods from time to time, such amendment of which will be approved pursuant to Section 2.3.2 (Approval of Joint Development Plan). The Joint Development Plan does not include activities to be conducted by ONO in connection with its research and development of the [***] prior to ONO’s delivery of such [***].

1.69    “Know-How” means technical information and know-how, including without limitation biological, chemical, pharmacological, toxicological, clinical, assay, trade secrets, and manufacturing data, nonclinical, preclinical and clinical data, the specifications of ingredients, manufacturing processes, formulation, specifications, sourcing information, quality control and testing procedures, and related know-how and trade secrets.

1.70    “Knowledge” means [***].

1.71    “Laws” means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of any federal, national, multinational, state, provincial, county, city or other political subdivision, domestic or foreign, in each case that are applicable to the activity in question and the jurisdiction in which it is conducted.

1.72    “Major Patent Territory” means [***].

1.73    “Materials” means any tangible biological, chemical or physical materials, including, for example, compounds, tissues, fluids, cells, cell lines, plasmids, gene constructs, and laboratory animals, and parts or components thereof.

1.74    “Multi-national Clinical Trial” means any Clinical Trial that is conducted in at least one country in the ONO Territory and at least one country in the FATE Territory, in accordance with one common protocol and conducted by both Parties.

1.75    “Net Sales” means, with respect to a particular time period, the total amounts invoiced to Third Parties by ONO, its Affiliates or Sublicensees for sale or other distribution of Collaboration Products during such time period to Third Parties, less the following deductions to the extent actually allowed or incurred with respect to such sales:

(a)    [***]

(b)    [***]

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

(c)    [***]

(d)    [***]

(e)    [***]

(f)    [***]

(g)    [***]

Notwithstanding the foregoing, amounts billed by ONO, or its Affiliates or Sublicensees, for the sale of Collaboration Products among ONO, its Affiliates and its Sublicensees for resale to Third Parties shall not be included in the computation of Net Sales hereunder. Net Sales shall be accounted for in accordance with GAAP or IFRS, as applicable. Net Sales shall exclude any samples of Collaboration Product transferred or disposed of at no cost for Clinical Trials including compassionate use, Investigator Sponsored Clinical Study, promotional or educational purposes.

Notwithstanding the foregoing, in the event a Collaboration Product is sold in a country in the Territory as a Combination Product, Net Sales of the Combination Product will be calculated as follows:

(i)    [***]

(ii)    [***]

(iii)    [***]

(iv)    [***]

[***]

1.76    “Oncology Field” means: (a) with respect to Collaboration Product 1, [***]; and (b) with respect to Collaboration Product 2, [***].

1.77    “ONO” has the meaning set forth in the Preamble.

1.78    “ONO Antigen Binding Domain” means the Antigen Binding Domain provided by ONO to FATE for Research and Development [***] under this Agreement, where such Antigen Binding Domain (a) is proprietary to or, subject to Section 7.10.3 (Necessary License) is Controlled by, ONO and (b) binds one of the target antigens listed on Exhibit 1.78 (Target Antigens for [***]) when such target antigen [***] and such binding is the intended primary mechanism of action [***].

1.79    “ONO Intellectual Property” means the ONO Know-How, the ONO Patents and the ONO’s interest in Joint Invention and Joint Patent.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

1.80    “ONO Know-How” means (a) all Know-How Controlled by ONO or its Affiliates as of the Effective Date; (b) all Know-How Controlled by ONO or its Affiliates at any time during the Term [***] and (c) [***] that is primarily and directly related to and/or reasonably necessary or useful for the identification, research, manufacture, formulation, delivery, packaging, use, Development and/or Commercialization of any of the Collaboration Candidates, Collaboration Products or FATE Cell Therapy, including the ONO Antigen Binding Domain, by FATE, or its Affiliates or Sublicensees, or a Third Party doing any of the foregoing on FATE’s behalf.

1.81    “ONO Option Period” means, for each Collaboration Candidate, the time period beginning on the Effective Date and expiring upon the date that is [***], subject to Section 2.4.3 (Option Exercise).

1.82    “ONO Patents” means any and all (a) Patents Controlled by ONO or its Affiliates as of the Effective Date; (b) all Patents Controlled by ONO or its Affiliates at any time during the Term [***] and (c) [***] and/or (ii) would be infringed, without a license granted hereunder, by the identification, research, manufacture, formulation, delivery, packaging, use, Development and/or Commercialization of any of the Collaboration Candidates, Collaboration Products or FATE Cell Therapy, including the ONO Antigen Binding Domain, by FATE, or its Affiliates or Sublicensees, or a Third Party doing any of the foregoing on FATE’s behalf.

1.83    “ONO Territory” means (a) for [***], the territory of Asia, and (b) for [***], worldwide or, subject to [***], the territory of Asia.

1.84    “Out-of-Pocket Expenses” means payments invoiced by a Third Party in relation to the Research and Development activities that a Party is required to pay and that pertain to work performed by such Third Party after the Effective Date that is directly and solely attributable to the Research and Development activities under the Joint Development Plan, where such payments shall be evidenced by invoices or receipts issued by such Third Party.

1.85    “Patents” means patents and patent applications and (a) any foreign counterparts thereof, (b) all divisionals, continuations, continuations in-part thereof or any other patent application claiming priority directly or indirectly to (i) any such specified patents or patent applications or (ii) any patent or patent application from which such specified patents or patent applications claim direct or indirect priority, and (c) all patents issuing on any of the foregoing, and any foreign counterparts thereof, together with all registrations, reissues, re-examinations, renewals, supplemental protection certificates, or extensions of any of the foregoing, and any foreign counterparts thereof.

1.86    “Payment Quarter” means the respective periods of three (3) consecutive months ending on a day before the same date of the Effective Date forthcoming every three consecutive (3) months following the Effective Date during the Research Term; provided, however, that the last Payment Quarter shall end upon the last date of the Research Term.

1.87    “Person” means any individual, firm, corporation, partnership, limited liability company, trust, business trust, joint venture, governmental authority, association or other entity.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

1.88    “Phase I Trial” means the first human clinical trial of a Collaboration Product in any country, the principal purpose of which is a preliminary determination of safety in healthy individuals or patients, as more fully defined in 21 C.F.R. § 312.21(a), or its successor regulation, or the equivalent in any foreign country.

1.89    “Phase II Trial” means a human clinical trial of a Collaboration Product in any country that is intended to explore a variety of doses, dose response, and duration of effect, and to generate initial evidence of clinical safety and activity in one or more target patient populations, as more fully described in 21 C.F.R. § 312.21(b), or its successor regulation, or the equivalent in any foreign country.

1.90    “Phase III Trial” means a human clinical trial of a Collaboration Product in any country that is (a) conducted after evidence suggesting effectiveness of the Collaboration Product has been obtained pursuant to one or more previous human clinical trials, and (b) conducted to gather additional information about effectiveness and safety as needed to evaluate the benefit-risk relationship of the drug and to provide an adequate basis for submission of a BLA to (i) the FDA, as more fully defined in 21 C.F.R. § 312.21(c), or its successor regulation or (ii) equivalent Regulatory Filings with similar requirements in a country other than the United States.

1.91    “Phase IV Trial” means a human clinical trial for a Collaboration Product Commenced after receipt of Regulatory Approval in the country for which such trial is being conducted and that is conducted within the parameters of the Regulatory Approval for the Collaboration Product. Phase IV Trials may include, without limitation, epidemiological studies, modeling and pharmacoeconomic studies of Collaboration Product and post-marketing surveillance studies.

1.92    “Prior CDAs” means the Mutual Nondisclosure Agreements between FATE and ONO having [***].

1.93    “Regulatory Approvals” or “Marketing Approval” means, with respect to any Collaboration Product in any jurisdiction, all approvals from any Regulatory Authority necessary, legally or practically, for the Commencement of Clinical Trials or the sale of the Collaboration Product in such jurisdiction in accordance with Laws, including without limitation any approvals for importation, manufacture, pricing, and/or reimbursement.

1.94    “Regulatory Authority” means any national or supranational governmental authority, including without limitation the FDA, EMA or Kourousho (i.e., the Japanese Ministry of Health, Labour and Welfare (“JMHW”)), or any successor agency thereto, that has responsibility in countries in the Territory over the Development and/or Commercialization of a Collaboration Candidate and/or a Collaboration Product.

1.95    “Regulatory Filings” means any and all regulatory applications, filings, approvals and associated correspondence required to commence Development, manufacture, marketing, sale and importation of Collaboration Products in, or into, each country or jurisdiction in the Territory.

1.96    “Research” means all scientific investigation activities conducted under the Joint Development Plan reasonably relating to advancing (a) Collaboration Candidate(s) during the Research Term, and (b) subject to the exercise by ONO of the ONO Option in accordance with Section 2.4.3 (Option Exercise), Collaboration Product(s) during the Term. When used as a verb, “Research” means to engage in Research.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

1.97    “Research Term” means, with respect to each Collaboration Candidate, the period commencing on the Effective Date and ending on the earliest of (a) the date the JSC determines that such Collaboration Candidate has met the Collaboration Candidate Selection Criteria, (b) termination by ONO of the Research of such Collaboration Candidate and (c) the date that is the later of (i) four (4) years after the Effective Date, which may be extended by mutual agreement of the Parties and (ii) completion of all activities set forth in the Joint Development Plan for such Collaboration Candidate that are to be completed in order to evaluate whether such Collaboration Candidate has met the Collaboration Candidate Selection Criteria.

1.98    “Royalty Term” means, on a country-by-country and Collaboration Product-by- Collaboration Product basis, the period commencing on the First Commercial Sale of a Collaboration Product in a country and ending on the date that is the later to occur of (a) expiration of the last Valid Claim covering (i) the composition of matter of, formulation of, or method of using, such Collaboration Product in the applicable country of sale, or (ii) the manufacture of such Collaboration Product in the applicable country of manufacture; and (b) fifteen (15) years after the First Commercial Sale of such Collaboration Product in such country.

1.99    “Sublicense” means a license or sublicense granted by written agreement pursuant to which a Third Party became a Sublicensee.

1.100    “Sublicensee” means (a) any Third Party granted a license or sublicense by a Party of any of the rights Controlled by such Party under FATE Intellectual Property or ONO Intellectual Property, as the case may be, to use, sell, offer to sell, promote, distribute, import, export, label, package and otherwise Develop and/or Commercialize a Collaboration Product within a particular country of its respective Territory, and/or (b) a Third Party granted a further Sublicense, in each case of subsection (a) and (b) in this Section 1.100 as set forth in Section 5.2 (Sublicensing by ONO) or Section 5.4 (License or Sublicense [***] in the FATE Territory).

1.101    “Target 1” means [***].

1.102    “Target 2” means [***].

1.103    “T Cell Biology” means [***].

1.104    “T Cell Biology Activities” means those Research and Development activities that are specifically related to T-Cell Biology and which are set forth under the Joint Development Plan and identified as T Cell Biology Activities in the Joint Development Plan.

1.105    “Territory” means the world, including both of the ONO Territory and the FATE Territory, or either of the ONO Territory or the FATE Territory, as the case may be.

1.106    “Third Party” means any Person other than ONO, FATE, and their respective Affiliates.

1.107    “United States” or “U.S.” means the United States of America and all its territories and possessions.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

1.108    “Valid Claim” means a claim within the FATE Patents or Joint Patents filed or issued in the ONO Territory, [***] that has not been abandoned or allowed to lapse or a claim within an issued United States or international patent that has not expired, lapsed, or been cancelled or abandoned, and that has not been dedicated to the public, disclaimed, or held unenforceable, invalid, or been cancelled by a court or administrative agency of competent jurisdiction in an order or decision from which no appeal has been or can be taken, including without limitation through opposition, re-examination, reissue or disclaimer. For any Royalty Term of FATE Cell Therapy, “Valid Claim” means a claim within the ONO Patents or Joint Patents filed and/or issued in the Territory, [***] that has not been abandoned or allowed to lapse or a claim within an issued United States or international patent that has not expired, lapsed, or been cancelled or abandoned, and that has not been dedicated to the public, disclaimed, or held unenforceable, invalid, or been cancelled by a court or administrative agency of competent jurisdiction in an order or decision from which no appeal has been or can be taken, including without limitation through opposition, re-examination, reissue or disclaimer.

1.109    Additional Definitions. Each of the following definitions is set forth in the Section of this Agreement indicated below:

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

ARTICLE 2

COLLABORATION

2.1    General Collaboration Overview.

2.1.1    ONO Obligations.

(a)    During the Research Term.

(i)    Under the Joint Development Plan. During the Research Term, ONO shall undertake Research and Development activities assigned to it in accordance with the Joint Development Plan, with the objective of advancing each Collaboration Candidate to meet the Collaboration Candidate Selection Criteria, including [***] so that FATE may undertake further Research and Development activities in accordance with the Joint Development Plan with the objective of advancing Collaboration Candidate 2 to meet the Collaboration Candidate Selection Criteria, [***].

(ii)    Independent of the Joint Development Plan. During the Research Term and pursuant to terms and conditions of this Agreement and [***] in particular, ONO shall use Commercially Reasonable Efforts to research and develop, at its sole discretion and expense and independent of the Joint Development Plan, [***] with the objective of delivering to FATE such [***].

(b)    After the Research Term. After the Research Term, ONO shall use Commercially Reasonable Efforts to Develop and Commercialize all Collaboration Products for which it has exercised the ONO Option in accordance with Section 2.4.3 (Option Exercise) in the applicable Oncology Field in the applicable ONO Territory at its sole expense, subject to Section 2.5.7 (Responsibilities for the Conduct of Development, and General Costs of, Collaboration Products) with respect to the cost sharing of the Common Development Activities, and in accordance with the terms and conditions of this Agreement and the Joint Development Plan and Commercialization Plan, provided, that (i) with respect to [***], ONO shall use Commercially Reasonable Efforts to Develop and Commercialize it in the Oncology Field applicable to [***], in the ONO Territory, including to conduct any Common Development Activities assigned to it in accordance with Section 2.5.2 (Development Plan),

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

and the allocation of costs between FATE and ONO, and subsequently specified in the Joint Development Plan; and (ii) in the event FATE exercises the CDCC Option with respect to [***], then with respect to the FATE CDCC Territory during the CDCC Term, ONO shall use Commercially Reasonable Efforts to Develop and Commercialize it in the Oncology Field applicable to [***] in the ONO Territory, including to undertake the Common Development Activities and other activities allocated to ONO in the FATE CDCC Territory in accordance with Sections 2.4.4 (CDCC Option) and 2.5.2 (Development Plan) and subsequently specified in the Joint Development Plan and cost sharing pursuant to Section 2.4.4 (CDCC Option) during the CDCC Term, and co-Commercialization activities in accordance with Section 2.4.4 (CDCC Option) and subsequently specified in the Commercialization Plan.

2.1.2    FATE Obligations.

(a)    During the Research Term. During the Research Term, FATE shall undertake Research and Development activities assigned to it in accordance with the Joint Development Plan, with the objective of advancing each Collaboration Candidate to meet the Collaboration Candidate Selection Criteria for the relevant Collaboration Product so that ONO may determine whether to exercise the ONO Option with respect thereto. As part of its activities under the Joint Development Plan, pursuant to terms and conditions of this Agreement, FATE shall use Commercially Reasonable Efforts to: (i) [***] (ii) [***] and (iii) [***].

(b)    After the Research Term.

(i)    [***] After the Research Term, FATE shall use Commercially Reasonable Efforts to Develop and Commercialize [***], in the Oncology Field applicable to [***], in the FATE Territory at its sole expense, subject to Section 2.5.7 (Responsibilities for the Conduct of Development, and General Costs of, Collaboration Products) with respect to the cost sharing of the Common Development Activities, and in accordance with the terms and conditions of this Agreement and the Joint Development Plan, including to conduct any Common Development Activities assigned to it in accordance with Section 2.5.2 (Development Plan) and the allocation of costs between FATE and ONO, and subsequently specified in the Joint Development Plan.

(ii)    [***] After the Research Term, with respect to [***], subject to the exercise of the CDCC Option by FATE, FATE shall use Commercially Reasonable Efforts to Develop and Commercialize [***] in the Oncology Field applicable to [***] in the [***] Territory during the CDCC Term, including to undertake during the CDCC Term the Common Development Activities and other activities allocated to FATE in the [***] Territory in accordance with Sections 2.4.4 (CDCC Option) and 2.5.2 (Development Plan) subsequently specified in the Joint Development Plan and cost sharing pursuant to Section 2.4.4 (CDCC Option) during the CDCC Term, and co-Commercialization activities in accordance with Section 2.4.4 (CDCC Option) and subsequently specified in the Commercialization Plan.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

2.2    Standards of Conduct; Records and Reports.

2.2.1    Standard of Conduct. Each Party shall conduct all such Research, Development and Commercialization activities in compliance with Laws, including without limitation all legal and regulatory requirements pertaining to the design and conduct of Clinical Trials.

2.2.2    Collaboration Reports. As agreed in each JSC meeting or as otherwise agreed between the Parties, each Party will provide the JSC with written development reports or presentations (“Collaboration Reports”). Collaboration Reports shall include [***]. Collaboration Reports will also include [***].

2.2.3    Subcontracting. Subject to and without limiting Section 5.2 (Sublicensing by ONO) and Section 5.4 (License or Sublicense [***] in the FATE Territory), each Party may fulfill its Research, Development and Commercialization obligations under this Agreement through subcontracting to a Third Party contractor or contract service organization; provided that: (a) such subcontracting by a Party shall not adversely affect its ability to fulfill its obligations under this Agreement or the rights of the other Party under this Agreement; (b) any such Third Party contractor to whom such Party discloses Confidential Information shall enter into an appropriate written agreement obligating such Third Party contractor to be bound by obligations of confidentiality and restrictions on use of such Confidential Information that are no less restrictive than the obligations in Article 8 (Confidentiality); (c) such Party will obligate such Third Party contractor to agree in writing to assign or license (with the right to grant sublicenses) to such Party any inventions (and Patents covering such inventions) made by such Third Party contractor in performing such services for such Party that are necessary for the Research, Development and Commercialization of Collaboration Candidates or Collaboration Products, as applicable, and (d) such Party shall at all times be responsible for the performance of such Third Party contractor and shall remain primarily responsible to the other Party for the fulfillment of its obligations under this Agreement even after such obligations are subcontracted to such Third Party contractor.

2.2.4    Records. Each Party shall, and shall require its Affiliates, Sublicensees and Third Party contractors to, maintain complete and accurate hard and/or electronic copies of records of all work conducted in furtherance of the Research, Development and Commercialization of Collaboration Candidates and Collaboration Products, as the case may be, and all results, data, and developments made in conducting such activities. Such records shall be complete and accurate and shall fully and properly reflect all such work done and results achieved in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes. Each Party shall provide to the other Party copies of such records promptly upon any reasonable request.

2.2.5    Cooperation. Each Party will provide reasonable consultation to the other Party, as reasonably requested by the other Party, in connection with such other Party’s Research, Development and Commercialization activities under this Agreement.

2.3    Research and Development During the Research Term.

2.3.1    General. During the Research Term, FATE shall have primary responsibility for conducting all Research and Development activities in accordance with the Joint Development Plan. Except as otherwise expressly provided in this Agreement or in the Joint Development Plan, the Parties shall [***].

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

2.3.2    Approval of Joint Development Plan. Within ten (10) Business Days after the Effective Date, the JSC shall formally approve the Joint Development Plan set forth on Exhibit 1.68 (Joint Development Plan) submitted by FATE which covers Research and Development activities for the first year of the Research Term. For each subsequent year of the Research Term, FATE shall, [***], submit the draft Joint Development Plan for the subsequent year (covering the Research and Development activities [***] of the year thereafter) of the Research Term to the JSC for review. The Parties shall mutually discuss and the JSC shall approve such updated Joint Development Plan [***]. Any addition, revision or amendment to the Joint Development Plan during the Research Term shall be subject to the unanimous decision by the JSC, with neither Party having final decision-making authority with respect thereto.

2.3.3    [***]

2.3.4    [***]. During the Research Term, ONO shall establish the criteria for incorporating the [***]. ONO shall provide updates to the JSC with respect to its research and development of the ONO Antigen Binding Domain. ONO shall consider, in good faith, any comments from the JSC with respect to the identity and the research and development of the ONO Antigen Binding Domain. Upon determination by ONO that an ONO Antigen Binding Domain has met the criteria for [***]. As soon as reasonably practical, ONO shall deliver to FATE [***] and all ONO Know-How directly relevant to such ONO Antigen Binding Domain then Controlled by ONO, and FATE (and ONO, to the extent any such activities are assigned to ONO under the Joint Development Plan) shall undertake further Research and Development to incorporate such ONO Antigen Binding Domain [***] in accordance with the Joint Development Plan. FATE (and ONO, to the extent any activities are assigned to ONO under the Joint Development Plan) shall use Commercially Reasonable Efforts to complete all activities as set forth in the Joint Development Plan to enable ONO to exercise ONO Option during the Research Term, provided, however, in the case FATE finds it is difficult to complete all activities as set forth in the Joint Development Plan during the Research Term, FATE shall promptly notify ONO of such fact and Parties shall discuss in good faith to extend the Research Term to complete such activities.

2.3.5    Alternative Antigen Binding Domain. [***]

2.3.6    [***]

[***]

[***]

2.3.7    Additional Development. If, due to unexpected technical, scientific, medical, and/or market condition factors, either Party determines that it is advisable to perform Research and Development not anticipated in the then-current Joint Development Plan (“Additional Development”), the costs of which, together with the costs of previous Research and Development activities performed by FATE under the then-current Joint Development Plan, exceed the amounts set forth in the annual budget included in such Joint Development Plan prior to such date (the foregoing, an “Unexpected Cost Increase”), the Party shall promptly notify

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

such determination to the JSC. Then, the Parties shall meet to discuss the circumstances giving rise to the Unexpected Cost Increase and to evaluate possible ways of avoiding such Unexpected Cost Increase, or of updating the Joint Development Plan and allocating the cost of conducting any such Additional Development between the Parties. In this instance, the JSC shall be responsible for approving such updated Joint Development Plan including cost and deciding whether [***].

2.4    ONO Option; CDCC Option.

2.4.1    Exclusive Option Right. Subject to the terms and conditions of this Agreement, FATE hereby grants to ONO the exclusive right to elect, at its sole discretion, to obtain a license for Collaboration Candidate 1 and Collaboration Candidate 2 under Section 5.1 (Licenses to ONO) to Develop and Commercialize such Collaboration Candidate as a Collaboration Product under the terms and conditions set forth in this Agreement (the “ONO Option”), which license shall be (a) [***] (b) [***] if FATE does not exercise the CDCC Option in accordance with Section 2.4.4 (CDCC Option), and (c) semi-exclusive for [***] as set forth in Section 5.3.3 (License upon Exercise of CDCC Option [***]) if FATE exercises the CDCC Option in accordance with Section 2.4.4 (CDCC Option), as the case may be. The ONO Option for each Collaboration Candidate shall expire at the end of the ONO Option Period corresponding to a given Collaboration Candidate.

2.4.2    Option Exercise Criteria.

(a)    The Parties have agreed upon the initial Collaboration Candidate Selection Criteria as of the Effective Date for each of Collaboration Candidate 1 and Collaboration Candidate 2, attached as Exhibit 1.23 (Collaboration Candidate Selection Criteria), to enable ONO to determine whether it wishes to exercise the ONO Option. The JSC shall review the Collaboration Candidate Selection Criteria at every JSC meeting and add additional Collaboration Candidate Selection Criteria for a Collaboration Candidate or modify the Collaboration Candidate Selection Criteria for a Collaboration Candidate as necessary from time to time during the Research Term pursuant to Section 4.1.4 (Specific Responsibilities Prior to the Exercise of the ONO Option), and shall update the Collaboration Candidate Selection Criteria [***].

(b)    During the Research Term, each Party, or the Parties, as appropriate, will notify the JSC upon the potential achievement of the Collaboration Candidate Selection Criteria and will provide the JSC with data and information supporting such Party’s or the Parties’ determination that the Collaboration Candidate Selection Criteria are met with respect to such Collaboration Candidate. The JSC shall discuss in good faith whether the data resulting from the Research and Development of each Collaboration Candidate establishes that the Collaboration Candidate Selection Criteria for such Collaboration Candidate are met, or is otherwise reasonably sufficient for ONO to determine whether to exercise the ONO Option for such Collaboration Candidate. The JSC shall have a period of [***] days following the receipt of such notice and data and information from the notifying Party to determine whether the Collaboration Candidate Selection Criteria have been met. If the JSC determines that the Collaboration Candidate Selection Criteria have been met, the JSC shall notify each of ONO and FATE of such determination in writing. If the JSC determines that the Collaboration Candidate Selection Criteria has not been met, or that further data should be obtained or additional studies should be performed before ONO will have obtained data reasonably sufficient to determine whether to exercise the ONO Option, for a Collaboration Candidate, the JSC shall (i) [***].

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

(c)    Notwithstanding the foregoing, ONO shall have the discretion to exercise the ONO Option with respect to a particular Collaboration Candidate, if the Collaboration Candidate Selection Criteria have not been met for such Collaboration Candidate during the ONO Option Period.

2.4.3    Option Exercise.

(a)    For each Collaboration Candidate, during the ONO Option Period applicable to such Collaboration Candidate, ONO may exercise the ONO Option for the Collaboration Candidate by written notice to FATE within the applicable ONO Option Period (the “Exercise Date”); provided, however, that if a Competition Law Filing (as defined below) is required in compliance with applicable Law, the effectiveness of such exercise will automatically be extended until the Clearance Date, and instead of being the date on which the ONO Option is exercised, the Exercise Date will be deemed to be the date that is the Clearance Date. Upon the Exercise Date for the Collaboration Candidate, the Collaboration Candidate for which the ONO Option has been exercised shall be designated a Collaboration Product for further Research, Development and Commercialization, unless and until this Agreement is terminated with respect to such Collaboration Product. For the avoidance of doubt, if FATE undergoes a Change of Control, ONO shall nonetheless be entitled to exercise the ONO Option as provided in this Section 2.4.3 (Option Exercise). If ONO does not exercise the ONO Option for a particular Collaboration Candidate during the applicable ONO Option Period, this Agreement will terminate with respect to such Collaboration Candidate pursuant to [***].

(b)    If a filing or submission with respect to the exercise of such ONO Option under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”) or any antitrust, competition or merger control Law applicable to such exercise (collectively, “Competition Laws” and such filing or submission “Competition Law Filings”) are required, ONO shall provide, prior to its exercise of the ONO Option, a written notice to FATE that ONO has determined in good faith based on consultations with its counsel that the exercise of the ONO Option will be subject to any Competition Laws Filings, and then the provisions of Section 13.13 (Competition Law Filings) shall apply. FATE shall provide to ONO any information reasonably requested by ONO in its assessment of potential notifications under applicable Competition Laws pursuant to this Section 2.4.3(b) (Option Exercise).

2.4.4    CDCC Option.

(a)    Grant. [***] FATE has the right to elect, at its sole discretion, to co-Develop and co-Commercialize [***] with ONO or its Affiliates or Sublicensee(s) [***] (the “CDCC Option”), pursuant to the license from ONO to FATE in Section 5.3.3 (License upon Exercise of CDCC Option [***]), under the terms and conditions set forth in this Agreement. The CDCC Option for [***] shall expire at the end of the CDCC Option Period.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

(b)    Exercise; Allocation of Responsibilities. FATE may exercise the CDCC Option for [***] by written notice to ONO within the CDCC Option Period. Upon FATE’s exercise of such option, FATE shall have the right to co-Develop and co- Commercialize [***] with ONO [***] Territory. If FATE exercises its CDCC Option under this Section 2.4.4 (CDCC Option), the JSC will update the Joint Development Plan to include and allocate between the Parties all activities for the Research and Development of [***], as well as a budget and timeline for such activities, within [***] days after FATE exercises the CDCC Option. In addition, prior to the Commencement of the first [***] the JSC will prepare a Commercialization Plan for [***] Territory, which plan will allocate commercial activities between the Parties and will include a budget and timeline for such activities. The JSC will allocate such Research, Development and Commercialization activities taking into account the Parties’ respective experience with the research and development of cell therapy products and the Parties’ then-existing commercial infrastructure, or desire and intent to develop a commercial infrastructure, in [***] Territory. Furthermore, the Parties will negotiate in good faith and enter into, in accordance with the provisions of this Section 2.4.4(b) (CDCC Option), a sales and co-promotion agreement governing the terms and conditions regarding the decision-making mechanism of the JSC with respect to co-Commercialization of [***] in [***] Territory, [***], and detailed procedures of the matters set forth in Section 2.4.4(c) (CDCC Option) below if necessary.

(c)    Cost and Profit Sharing. Subject to the exercise by FATE of the CDCC Option for [***] and each Party [***]. In connection with the preparation of the Joint Development Plan, the Parties shall establish a mechanism for reconciliation and reimbursement of development and manufacturing costs, and related definitions. In connection with the preparation of the Commercialization Plan, the Parties shall establish detailed procedures for sharing such costs and profits, including procedures for cost and revenue reporting, reconciliation and payments, efforts in sales promotion to be used by each Party, and definitions of the costs to be shared and included in the profit calculation. Each Party shall comply with all procedures and payment obligations established by the Parties. [***]. For the purpose of this Section 2.4.4(c), subject to Section 7.10.1 (Existing Agreements), profits and losses means [***]. Notwithstanding anything to the contrary in this Section 2.4.4(c), the Parties shall discuss in good faith and reach an agreement on the further details of the method of profit and loss sharing between FATE and ONO as set forth in Section 2.4.4(b) (CDCC Option) above.

(d)    Sublicensees. If, subject to the exercise by FATE of the CDCC Option, the Parties agree to seek a Third Party licensee to exclusively Develop and/or Commercialize [***] in [***] Territory under a Sublicense, the Parties shall [***], in accordance with the procedures and definitions established by the Parties pursuant to sub-section (c) above. [***]

(e)    Opt-Out. After FATE exercises the CDCC Option, FATE shall have the right to terminate its rights and obligations to co-Develop and co-Commercialize [***] in its entirety (each, an “Opt-Out” and the applicable country (in the case of the U.S.) or region (in the case of Europe) in (A), (B) or (C), the “Opt-Out Territory”) on at least [***] days written notice to ONO; provided that such Opt-Out will be effective upon [***] (the “Opt-Out Effective Date”). Upon the Opt-Out Effective Date, the Parties will conduct all activities necessary to transition all responsibilities of FATE with respect to the Development and Commercialization (but not manufacture) of [***] in the Opt-Out Territory to ONO, which may include [***].

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

Following the Opt-Out Effective Date, (i) the license granted by FATE to ONO shall become exclusive in the Opt-Out Territory pursuant to Section 5.1.3 (License upon Exercise of ONO Option [***]), and (ii) all the obligations of FATE, and all the rights and obligations of ONO, in the Opt-Out Territory shall be exercised or performed by FATE or ONO, as applicable, as if they are in the ONO Territory where an exclusive license is granted pursuant to Section 5.1.3 (License upon Exercise of ONO Option [***]) hereof. Without limiting the foregoing, following the Opt-Out Effective Date, (1) the Parties will no longer share applicable costs and profits and losses for the Opt-Out Territory, and ONO shall be solely responsible, at ONO’s sole cost and expense, for conducting all Development and [***] in the Opt-Out Territory, (2) FATE shall continue to manufacture [***] as set forth herein, and (3) the royalty rates under Section 6.4.3 ([***] Outside Asia) will apply as if FATE had not exercised its CDCC Option. In the event that FATE elects, pursuant to this Section 2.4.4(e) (CDCC Option), to Opt-Out, and that Competition Law Filings are required, ONO shall provide, on or before the later of clauses (x) and (y) in the definition of Opt-Out Effective Date, a written notice to FATE that ONO has determined in good faith based on consultations with its counsel that the Opt-Out will be subject to Competition Law Filings and that the provisions of Section 13.13 (Competition Law Filings) shall apply. FATE shall provide to ONO any information reasonably requested by ONO in its assessment of potential notifications under applicable Competition Laws pursuant to this Section 2.4.4(e) (CDCC Option).

2.5    Development and Commercialization of Collaboration Products.

2.5.1    General. Following the exercise by ONO of the ONO Option with respect to a given Collaboration Candidate, such Collaboration Candidate will be designated as a Collaboration Product (subject to Section 2.4.1 (Exclusive Option Right)) and ONO and FATE shall use Commercially Reasonable Efforts to Research, Develop and Commercialize such Collaboration Product in its applicable Territory in the applicable Oncology Field.

2.5.2    Development Plan.

(a)    Within [***] days following the Exercise Date with respect to a given Collaboration Candidate, ONO will prepare and provide to the JSC an update to its proposed activities under the Joint Development Plan pursuant to which ONO will conduct Research and Development in the ONO Territory, and FATE will prepare and provide to the JSC (i) an update to its proposed activities under the Joint Development Plan pursuant to which FATE will conduct Research and Development in the FATE Territory, for such Collaboration Product on an Indication-by-Indication basis, as applicable and (ii) a process development and manufacturing plan for all non-clinical and clinical Materials of Collaboration Products for use both by ONO in the ONO Territory and by FATE in the FATE Territory. Each Party will prepare and provide a budget and estimated timeline with respect to its proposed activities under the Joint Development Plan.

(b)    ONO and FATE will discuss in good faith through the JSC, and use Commercially Reasonable Efforts to reach an agreement on, the Joint Development Plan, including but not limited to: (i) [***], (ii) and (iii) [***].

(c)    During each Calendar Year, each Party shall provide its updates on the Joint Development Plan for the upcoming year covering activities [***] so that the Parties may

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

agree on such update by [***] that year, and each Party shall continue to provide to the other Party, through the JSC, regular updates from time to time to its proposed activities under the Joint Development Plan, as applicable. Each Party will consider in good faith the other Party’s comments on such proposed activities and any updates thereto.

(d)    If the JSC fails to agree, after the use of Commercially Reasonable Efforts in an attempt to reach an agreement between the Parties regarding the Joint Development Plan, notwithstanding the provisions of Article 12 (Dispute Resolution), the decision shall be made in accordance with Section 4.1.8 (Decision-Making; Limitations on JSC), provided however, [***].

2.5.3    Global Brand Strategy for Collaboration Products.

(a)    General. Both Parties generally acknowledge that Commercialization of each Collaboration Product under a common brand name in the world would be beneficial for both Parties to maximize the value of such Collaboration Product. Subject to the exercise by ONO of the ONO Option for a Collaboration Candidate, and in the case of [***] subject to FATE’s exercise of the [***] Option during the CDCC Option Period, both Parties shall discuss in good faith with the other and use Commercially Reasonable Efforts to reach an agreement on one of the proposed candidates for brand names, or similar variations or derivatives thereof including translations or transliterations, as the common brand name, as well as packaging and logos, for use in the Commercialization of the applicable Collaboration Product by ONO in the ONO Territory, by FATE in the FATE Territory and by both Parties in the [***] Territory (“Common Brand Name”) Notwithstanding anything in this Section 2.5.3, in the event a Party has reasonable ground, such Party shall not be required to agree or remain in agreement with the common branding strategy for [***] after good faith discussion with other Party. For clarity, in the case where the CDCC Option is not exercised by FATE during the CDCC Option Period or FATE Opts-Out in the [***] Territory in its entirety, this Section 2.5.3 shall not be applicable to [***].

(b)    Procedures. Either Party may make a proposal, at the appropriate time before the first BLA filing in the world, of one or more candidates for Common Brand Name. Both Parties shall discuss in good faith to reach agreement on the Common Brand Name from such candidates within [***]days following its receipt of the latter Party’s proposal. For [***] for each Major Patent Territory and any other countries outside of Major Patent Territory reasonably requested by ONO, FATE shall conduct a trademark search of the Common Brand Name [***] FATE shall file the application for registration of the trademark rights for the Common Brand Name [***] for each Major Patent Territory, ONO shall conduct a trademark search of the Common Brand Name [***] ONO shall file the application for registration of the trademark rights for the Common Brand Name [***]. If the Parties are unable to agree on a Common Brand Name for which to seek trademark registration and any applicable Regulatory Approvals, then FATE shall select the brand name(s) for the Collaboration Product in the FATE Territory and ONO shall select the brand name(s) for the Collaboration Product in the ONO Territory, provided that the Parties shall jointly determine the brand name(s) for [***] in [***] Territory during the CDCC Term.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

(c)    Intellectual Property. After registration of Common Brand Name for [***], FATE will grant ONO licenses to such Common Brand Name for [***] for use in the ONO Territory [***]. FATE shall be responsible for the prosecution, registration and maintenance of such trademark rights [***]. After registration of Common Brand Name for [***], ONO shall be responsible for the prosecution, registration and maintenance of such trademark rights in the ONO Territory [***] and ONO shall be responsible for the prosecution, registration and maintenance of such trademark rights in the [***] Territory [***]. ONO will grant FATE licenses to the Common Brand Names for [***] for use in the [***] Territory [***].

2.5.4    Regulatory Filings.

(a)    In its applicable Territory where a Party has exclusive rights of Development and Commercialization of a Collaboration Product, [***]

(b)    Each Party shall cooperate in good faith with the other Party in regulatory affairs with respect to Collaboration Products in the other Party’s Territory [***]. Each Party shall provide the other Party with reasonable advance notice of all substantive meetings with the Regulatory Authorities in its Territory pertaining to each Collaboration Product, or with as much advance notice as practicable under the circumstances. The other Party may, at its own cost, attend such meetings with Regulatory Authorities as an observer upon reasonable advance notice to a Party having such meeting, subject to such Party’s prior written consent which shall not be unreasonably withheld, conditioned or delayed and receipt of any required permissions of such Regulatory Authorities.

(c)    Each Party shall have the right to [***].

2.5.5    Commercialization Plan. As soon as practicable, but not later than [***] each Party will prepare and provide to the JSC a Commercialization Plan for which such Party will conduct Commercialization in the respective Territory for such Collaboration Product. If FATE has exercised the FATE CDCC Option, a Commercialization Plan for which the Parties will conduct Commercialization in the FATE CDCC Territory will be prepared pursuant to Section 2.4.4(b) (CDCC Option). The applicable Party(ies) will prepare and provide a budget with respect to the activities covered by such Commercialization Plan. The applicable Party(ies) shall continue to provide to the other Party, through the JSC, regular updates from time to time to its Commercialization Plan, as applicable. The applicable Party(ies) will consider in good faith the other Party’s comments on such Commercialization Plan and any updates thereto.

2.5.6    Development and Commercialization Information. At each JSC meeting, or as otherwise agreed to between the Parties during the Term, each Party will provide the JSC with information regarding the Development and Commercialization activities performed by such Party, including without limitation [***] in each case relating to each Collaboration Product for which such Party is conducting Development and Commercialization activities in such Party’s applicable Territory, as well as [***] Collaboration Product in its Territory. Each Party shall consider in good faith any comments of the other Party with respect to Development and Commercialization activities. Such data and information received by the other Party may be used to exercise the licenses and rights granted to such other Party in this Agreement.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

2.5.7    Responsibilities for the Conduct of Development, and General Costs, of Collaboration Products. Except as otherwise expressly provided in this Agreement, (a) ONO (with the assistance of FATE as set forth in the Joint Development Plan or Commercialization Plan) shall be primarily responsible for, and shall bear the costs and expenses incurred in connection with the conduct of [***] all Research, Development and Commercialization activities with respect to each Collaboration Product in the applicable ONO Territory during the Term; and (b) FATE (with the assistance of ONO as set forth in the Joint Development Plan or Commercialization Plan) shall be primarily responsible for, and shall bear the costs and expenses incurred in connection with the conduct of [***] all Research, Development and Commercialization activities with respect to each Collaboration Product in the applicable FATE Territory during the Term. Notwithstanding the foregoing, with respect to Collaboration Product 1 and with respect to Collaboration Product 2 during the CDCC Term, ONO and FATE shall discuss in good faith through the JSC, and use Commercially Reasonable Efforts to reach an agreement with respect to, the allocation of responsibilities between the Parties to conduct any studies of Common Development Activities, in a time efficient manner. ONO and FATE shall share the costs and expenses incurred in connection with the conduct of such Common Development Activities, regardless of the Party which conducts such activities, with [***]. For clarity, the costs and expenses shall include [***]. Any costs and expenses incurred by each Party in each calendar quarter that are to be shared between the Parties pursuant to this Section 2.5.7 shall be settled on a quarterly basis. A Party shall provide the other Party with the invoice specifying such itemized costs and expenses, and their allocations between the Parties pursuant to this Section 2.5.7, promptly following the last day of each Calendar Quarter, which shall be paid by the other Party pursuant to Section 6.6 (Manner of Payment).

2.5.8    Pharmacovigilance. Prior to the first IND in the world by either Party with respect to Collaboration Product 1 and with respect to Collaboration Product 2 during the CDCC Term, the Parties shall negotiate in good faith and enter into a safety data exchange agreement (the “Pharmacovigilance Agreement”), which shall be applicable to such pre-marketing safety information that will be available from Clinical Trials with a Collaboration Product, and shall set forth standard operating procedures governing the collection, investigation, reporting, and exchange of information concerning adverse drug reactions/adverse events sufficient to permit each Party to comply with its Laws. In the event the first BLA for a Collaboration Product is filed by either Party in any country of the world, the Parties shall initiate negotiation with an aim to amend the Pharmacovigilance Agreement as soon as practicable to include post-marketing safety information that will be available from post-marketing experiences with a Collaboration Product to permit each Party to comply with all Laws regarding the management of safety data by providing for the exchange of relevant information in appropriate format. Subject to the foregoing, each Party shall be responsible for monitoring all clinical experiences with respect to a Collaboration Product in the course of its own Research, Development and Commercialization and promotional activities, and filing all required reports with respect thereto, in its respective Territory.

2.5.9    Investigator Sponsored Clinical Study. Each Party shall have the right to authorize the conduct of Investigator Sponsored Clinical Study(ies) in its Territory and support such Investigator Sponsored Clinical Study(ies) at its own discretion; provided, however, that (a) each Investigator Sponsored Clinical Study in the FATE CDCC Territory during the CDCC

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

Term shall be authorized only with both Parties’ written approval of the protocol therefor, and (b) each Party agrees to inform the other Party of each Investigator Sponsored Clinical Study(ies) in a timely manner and to provide the other Party an opportunity to review and comment on the protocol of each Investigator Sponsored Clinical Study(ies) prior to the commencement of such Investigator Sponsored Clinical Study(ies).

ARTICLE 3

MANUFACTURE AND SUPPLY

3.1    Antigen Binding Domain. In the event an ONO Antigen Binding Domain has met the criteria for incorporating the ONO Antigen Binding Domain into Collaboration Candidate 2 pursuant to [***] ONO shall be solely responsible at its expense for making or having made all requirements of any ONO Antigen Binding Domain during the Research Term. ONO shall manufacture, handle, store and ship all such ONO Antigen Binding Domain in compliance with all Laws, with all Regulatory Filings, and with its applicable internal specifications and quality control procedures during the Research Term.

3.2    Manufacture and Supply of Collaboration Products. As between FATE and ONO, FATE will be exclusively responsible for the conduct of, and shall use Commercially Reasonable Efforts to conduct process development, manufacturing, fill and finish, testing and supply of all pre-clinical, clinical and commercial Materials of Collaboration Products in quantities required for Research, Development and Commercialization by ONO in the ONO Territory and in the final dosage form of unlabeled (other than tracking labelled required for manufacturing and shipping) and unpackaged pharmaceutical preparation, by itself or through Third Party contract manufacturers during the Term. For clarity, FATE shall fulfill the responsibilities mentioned above with respect to [***] in the pre-clinical, clinical and commercial Materials of [***] after the Exercise Date for [***].

3.2.1    Supply Agreement.

(a)    Clinical Supply. Within [***] days after the Exercise Date with respect to a Collaboration Candidate, the Parties will negotiate in good faith and enter into, in accordance with the provisions of this Section 3.2, a (i) master process development, manufacturing and supply agreement governing the terms and conditions under which FATE will manufacture and supply to ONO the Collaboration Products for preclinical and clinical use (“Clinical Supply Agreement”), and (ii) quality agreement for quality control and quality assurance in connection with manufacturing of a Collaboration Product conducted by FATE or its Third Party contract manufacturers, including the cGMP responsibilities of the Parties. During such [***] day period, ONO shall transfer to FATE, in consultation with FATE’s process development personnel (or equivalent), all ONO Know-How necessary for FATE to manufacture Collaboration Products, including ONO Know-How for the manufacture, handling, storing and shipping of the ONO Antigen Binding Domain.

(b)    Commercial Supply. Within [***] days after the commencement of the first Phase III Trial in any country of the world, the Parties will negotiate in good faith and enter into, in accordance with the provisions of this Section 3.2, a manufacturing and supply agreement governing the terms and conditions under which FATE will manufacture and supply to ONO the Collaboration Products for commercial use (“Commercial Supply Agreement” during the Term, and the Clinical Supply Agreement and Commercial Supply Agreement are collectively referred to as “Supply Agreements”).

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

(c)    Basic Terms of the Supply Agreements. The Supply Agreements shall provide: (i) that FATE shall manufacture, during the Term, handle, store, and ship all Collaboration Products in compliance with all Laws including all current governmental regulatory requirements concerning cGMP and cGMP requirements concerning documentation, reports and record keeping, with all Regulatory Filings, and with its applicable internal specifications and quality control procedures; (ii) customary definitions and terms and conditions for such agreements, including, without limitation, delivery, technology transfer, quality controls, quality assurance, termination, procedures for non-conformance with specifications and non- compliance with Laws, audit and inspection (including of books of accounts and records by ONO for the determination of the cost of process development, manufacturing, fill and finish, testing and supply of the relevant Collaboration Product or otherwise) and indemnification related to supply of Collaboration Products; (iii) addendums for each Collaboration Product that contain provisions specific to such Collaboration Product, including, without limitation, manufacturing plans, supply chain logistics, and transfer pricing; (iv) that FATE shall allocate quantities of Collaboration Product between FATE and ONO in an equitable manner and not treat itself in favor in the Supply Agreement, including delivery of amounts of any Collaboration Product between FATE and ONO taking into account the market demand and forecast in the Territory of each Party; (v) in the case of the Commercial Supply Agreement, [***].

3.2.2    Transfer Pricing. ONO shall pay to FATE (a) in connection with non- Commercial supply of Collaboration Products, fees equal to [***] and (b) in connection with the Commercial supply of Collaboration Products, fees equal to [***]. For clarity, such manufacturing cost shall include [***]. For further clarity, [***]

3.3    Third Party Information. Notwithstanding anything to the contrary in this Agreement, ONO acknowledges that it may be required to enter into appropriate confidentiality agreements with or with respect to specific Third Party contract manufacturers or other independent contractors engaged by FATE before FATE can share with ONO information relating to its agreement with such Third Party(ies) or such Third Party(ies)’ confidential information as required under this Agreement. In such case, FATE shall notify ONO promptly of such requirement, and the Parties shall cooperate to take such actions as are necessary to enable FATE to comply with such confidentiality requirements of FATE’s agreements with any such Third Party(ies).

ARTICLE 4

GOVERNANCE

4.1    Joint Steering Committee.

4.1.1    Purpose. As soon as practicable after the Effective Date, the Parties shall establish a joint steering committee (the “Joint Steering Committee” or “JSC”) to oversee the Collaboration and to make certain decisions regarding the Research, manufacturing, Development, and Commercialization activities of Collaboration Candidates and Collaboration Products during the Term as set forth in this Section 4.1 (Joint Steering Committee).

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

4.1.2    Responsibilities. Subject to the provisions of Article 4 (Governance), the JSC shall have review and oversight responsibilities (a) prior to the Exercise Date for a Collaboration Candidate, for all Research and Development activities performed by FATE and ONO with respect to such Collaboration Candidate; and (b) following the Exercise Date for a Collaboration Candidate, all Research, Development and Commercialization activities performed by FATE and ONO with respect to such Collaboration Product. The JSC shall provide a forum for sharing advice, progress and results relating to, and for coordinating the conduct of, such activities and shall attempt to facilitate the resolution of any disputes between the Parties, as described in Section 4.1.8 (Decision-Making; Limitations on JSC). The JSC shall also serve as a forum for information exchange with respect to (i) ONO’s research and development activities with respect to the ONO Antigen Binding Domain and/or (ii) ONO’s and FATE’s research and development activities with respect to the Alternative Antigen Binding Domain, provided that subject to [***], such activities regarding above (i) shall not be subject to the oversight or decision making of the JSC.

4.1.3    Information Access. The JSC shall have access to each Party’s plans for Development and Commercialization of Collaboration Candidates and Collaboration Products during the Term, including budgets and timelines related thereto, and shall be briefed by the Parties regarding the content, execution, progress and results achieved by the respective Parties thereunder, as well as regarding the ONO Antigen Binding Domain pursuant to [***] by ONO and regarding potential Alternative Antigen Binding Domains pursuant to Section 2.3.5 (Alternative Antigen Binding Domain) by FATE and ONO. Each Party, through its representatives on the JSC, shall be permitted to provide advice and commentary with respect to the other Party’s plans for Development and Commercialization and related budgets and timelines. As provided in Section 2.5.2 (Development Plan) and Section 2.5.5 (Commercialization Plan), as applicable, each Party shall take such advice and commentary into good faith consideration.

4.1.4    Specific Responsibilities Prior to the Exercise of the ONO Option. More specifically, the JSC shall, during the ONO Option Period for a Collaboration Candidate:

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

4.1.5    Role Following the Exercise of the ONO Option. If ONO exercises the ONO Option with respect to a Collaboration Candidate, the JSC shall continue as a forum for discussion and decision making between the Parties regarding the Research, Development and Commercialization of such Collaboration Product. In such case, the Parties may appoint additional members to the JSC that have specialized knowledge regarding the research, development and commercialization of human therapeutic products, and the JSC shall continue to conduct meetings as provided in Section 4.1.6 (Membership; Meetings). The JSC will thereafter discuss key activities and matters related to the Research, Development and Commercialization of such Collaboration Product including those set forth in Section 2.5.2 (Development Plan), and each Party, through the JSC, will consider any suggestions the other Party may have regarding the Research, Development and Commercialization of such Collaboration Product by such Party in the applicable Territory where such Party has exclusive rights of Research, Development and Commercialization of such Collaboration Product. More specifically, and without limiting the foregoing, the JSC shall, following the Exercise Date for the Collaboration Candidate:

4.1.6    Membership; Meetings. The JSC shall be composed of three (3) employees each from ONO and FATE (or such other number as the Parties may agree in writing), and shall meet [***], or more often if the JSC so agrees or on ad hoc basis, in person, by teleconference or video-teleconference. In-person meetings shall alternate between FATE and ONO locations whenever possible unless otherwise agreed by the Parties. The first such meeting shall be within [***] after the Effective Date. Any member of the JSC may designate a substitute to attend with prior written notice to the other Party. There will be an annually rotating chairperson (the “JSC Chairperson”) with the first JSC Chairperson to be designated by FATE. Ad hoc guests, including without limitation FATE’s Chief Executive Officer and ONO’s Executive Director of Oncology R&D Center, who are bound by obligations of confidentiality and restrictions on use of such Confidential Information that are no less restrictive than the obligations in Article 8 (Confidentiality) may be invited to the JSC meetings. Each Party may replace its JSC members with other of its employees, at any time, upon written notice to the other Party.

4.1.7    Project Management Team.

(a)    Composition. Promptly after the establishment of the JSC, the Parties shall establish a project management team (the “Project Management Team” or the “PMT”) consisting of key employees of both Parties performing or involved in the Research and Development activities during the Research Term. PMT shall be responsible for the daily Research and Development activities during the Research Term and be expected to make

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

recommendations on issues therein. One of the Project Team members of each Party shall be appointed as a project manager (a “Project Manager”) to coordinate its part of the Research and Development activities under Joint Development Plan during the Research Term. Either Party may change its Program Manager upon written notice to the other Party. A Program Manager may be a member of the JSC.

(b)    Meetings and Reports. The PMT shall have a meeting [***] via telephone or video conference to discuss the ongoing Research and Development activities during the Research Term. Each Party may invite its other employees having the relevant expertise, knowledge or capability to participate in such conference. Following each meeting, the Project Manager of FATE shall prepare and provide the Project Manager of ONO with a summary report of the meeting. In the event Project Managers of the Parties have discussed any material matter, a Project Manager of each Party shall report the outcome of such discussions to the JSC members of the Party that such Project Manager belongs to.

4.1.8    Decision-Making; Limitations on JSC. Except as otherwise expressly provided herein, any decision of the JSC shall be made by consensus, [***]. The JSC shall have only such powers as are specifically delegated to it in this Agreement, and such powers shall be subject to the terms and conditions set forth herein. Without limiting the generality of the foregoing, the JSC shall have no power to amend, modify or waive any provision of this Agreement. In the event that the JSC is unable to reach a consensus decision on a matter that is within its decision-making authority within [***] after such matter is submitted to it or identified for resolution, then either Party may, by written notice to the other, submit the matter for dispute resolution pursuant to Article 12 (Dispute Resolution). Notwithstanding the foregoing, if the JSC is unable to reach a consensus decision on the following matters, then the matter shall first be submitted to dispute resolution by the Executive Officers under Section 12.2 (Resolution by Executive Officers), and any dispute that is not resolved by such Executive Officers during [***] shall not be resolved as set forth in Section 12.3 (Arbitration) or litigation, but shall instead be resolved as follows: [***]. Each Party hereby expressly waives its right to seek resolution of such dispute to be resolved in accordance with this Section 4.1.8 in a court of competent jurisdiction.

4.1.9    Secretary; Minutes. The JSC Chairperson shall designate a secretary of the JSC who will be responsible for calling meetings, preparing and circulating an agenda and presentation materials in advance of each meeting, and preparing and circulating minutes within [***] after each meeting of the JSC setting forth, among other things, a description, in reasonable detail, of the discussions at the meeting and a list of any actions, decisions or determinations approved by the JSC. Such minutes shall be effective only after being approved by both Parties. Definitive minutes of all JSC meetings shall be finalized [***] after the meeting to which the minutes pertain.

4.1.10    Discontinuation of Committees. The activities to be performed by each Committee shall solely relate to governance and information sharing under this Agreement, and are not intended to be, or involve the delivery of, services. Each Committee shall continue to exist until the first to occur of: (a) the Parties mutually agreeing to disband the Committee; or (b) neither Party being required to provide information or other materials to such Committee. Once a Committee is disbanded, any matters previously delegated to the Committee shall be resolved in accordance with Article 12 (Dispute Resolution) but skipping the initial attempt of resolution through the JSC. In the case the Committee is disbanded in accordance with Section 4.1.10(a), thereafter all information or other materials shall be shared between the Parties through Alliance Liaisons.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

4.2    Alliance Liaisons. Promptly after the Effective Date, each Party shall appoint an individual (other than an existing member of the JSC) to act as the alliance liaison for such Party (each, an “Alliance Liaison”). Each Alliance Liaison shall thereafter be permitted to attend meetings of the JSC as a nonvoting observer, subject to obligations of confidentiality and restrictions on use of such Confidential Information that are no less restrictive than the obligations in Article 8 (Confidentiality). The Alliance Liaisons shall be the primary point of contact for the Parties regarding the Collaboration activities contemplated by this Agreement and shall facilitate communication regarding all activities hereunder. The Alliance Liaisons shall lead the communications between the Parties and shall be responsible for following-up on decisions made by the JSC. The name and contact information for such Alliance Liaison, as well as any replacement(s) chosen by FATE or ONO, in their sole discretion, from time to time, shall be promptly provided to the other Party in accordance with Section 13.2 (Notices).

ARTICLE 5

LICENSES

5.1    Licenses to ONO.

5.1.1    Enabling License to ONO During the ONO Option Period. Subject to the terms and conditions of this Agreement, FATE hereby grants to ONO a non-exclusive, royalty- free, non-transferable (except as provided in Section 13.4 (Assignment)) license in the Territory, without the right to grant sublicenses, under FATE Intellectual Property solely as and to the extent necessary to enable ONO to perform ONO’s obligation with respect to the Collaboration Candidates in accordance with the Joint Development Plan during the ONO Option Period, including through the use of Third Party contractors in accordance with Section 2.2.3 (Subcontracting), which enabling license for a Collaboration Candidate shall expire at the end of the ONO Option Period with respect to such Collaboration Candidate.

5.1.2    License upon Exercise of ONO Option [***]. Subject to the terms and conditions of this Agreement, upon and as of the Exercise Date for [***] (subject to Section 2.4.3 (Option Exercise)), FATE hereby grants to ONO an exclusive (even as to FATE and its Affiliates, except to the extent necessary for FATE or its Affiliates to perform its obligations under the Collaboration), non-transferable (except as provided in Section 13.4 (Assignment)), royalty bearing license (or sublicense, as applicable), with the right to grant sublicenses solely in accordance with Section 5.2 (Sublicensing by ONO), under the FATE Intellectual Property, to use, sell, offer to sell, promote, distribute, import, export, label, package and otherwise Develop and/or Commercialize, but not the right to make or have made, [***] in the [***] Territory, during the Term, in the Field, including through the use of Third Party contractors in accordance with Section 2.2.3 (Subcontracting).

5.1.3    License upon Exercise of ONO Option [***]. Subject to the terms and conditions of this Agreement, upon and as of the Exercise Date for [***] (subject to Section

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

2.4.3 (Option Exercise)), FATE hereby grants to ONO a non-transferable (except as provided in Section 13.4 (Assignment)) license (or sublicense, as applicable) under the FATE Intellectual Property, to use, sell, offer to sell, promote, distribute, import, export, label, package and otherwise Develop and/or Commercialize, but not the right to make or have made, [***] in the [***] Territory, during the Term, in the Field, including through the use of Third Party contractors in accordance with Section 2.2.3 (Subcontracting). Such license shall be: (i) during the CDCC Term and in the [***] Territory, semi-exclusive [***] (only ONO and FATE have the right to exercise its rights under this Agreement) and royalty-free (subject to the sharing of profits and losses by the Parties), with the right to grant sublicenses solely in accordance with Section 2.4.4(d) (Sublicensees), or (ii) exclusive (even as to [***] except to the extent necessary for [***] to perform its obligations under the Collaboration) and royalty-bearing, with the right to grant sublicenses solely in accordance with Section 5.2 (Sublicensing by ONO), (A) during the Term and outside the [***] Territory, if [***] exercises the CDCC Option pursuant to Section 2.4.4 (CDCC Option) hereof, (B) during the Term and worldwide, if [***] does not exercise the CDCC Option pursuant to Section 2.4.4 (CDCC Option) hereof, or (C) during any remaining period of the Term and in the Opt-Out Territory, if [***] Opts-Out pursuant to Section 2.4.4(e) (Opt-Out) hereof.

5.2    Sublicensing by ONO. ONO shall have the right to grant sublicenses to Third Parties at ONO’s sole discretion through multiple tiers with respect to the rights licensed to ONO under Sections 5.1.2 (License upon Exercise of ONO Option for [***]) and 5.1.3 (License upon Exercise of ONO Option for [***]) solely in accordance with this Section 5.2 (Sublicensing by ONO); provided that:

5.2.1    such Sublicense shall refer to this Agreement and shall be subordinate to and consistent with the terms and conditions of this Agreement, and shall not limit the ability of ONO (individually or through the activities of its Sublicensee) to fully perform all of its obligations under this Agreement or FATE’s rights under this Agreement;

5.2.2    in such Sublicense agreement, the Sublicensee shall agree in writing to be bound to ONO by terms and conditions substantially similar to the corresponding terms and conditions of this Agreement and specifically with respect to [***]

5.2.3    promptly after execution of the Sublicense agreement, ONO shall provide a summary of such Sublicense agreement to FATE, provided, that in no event shall ONO have any obligation to disclose to FATE the financial terms and conditions of the Sublicense;

5.2.4    ONO shall remain responsible for the performance of this Agreement and the performance of its Sublicensees hereunder, and shall cause such Sublicensee to enable ONO to comply with all applicable terms and conditions of this Agreement;

5.2.5    each Sublicense shall terminate immediately upon the termination of this Agreement (in whole or only with respect to the rights that are subject to such Sublicense) [***] or by FATE pursuant to Section 11.2 (Termination for Cause), 11.4 (Termination for Insolvency) or 11.5 (Termination for Patent Challenge), or by ONO pursuant to Section 11.2 (Termination for Cause), 11.4 (Termination for Insolvency) or 11.5 (Termination for Patent Challenge) if ONO makes the election under [***] on a Collaboration Product-by- Collaboration Product basis; and

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

5.2.6    If a Sublicensee of ONO does not agree to any or all of Section 5.2.2, then ONO shall not grant to such Sublicensee the applicable reciprocal rights [***]

5.2.7    Notwithstanding anything herein to the contrary, to the extent that (a) [***] or (b) [***].

5.3    Licenses to FATE.

5.3.1    Enabling License to FATE. Subject to the terms and conditions of this Agreement, (i) ONO hereby grants to FATE a non-exclusive, royalty-free, non-transferable (except as provided in Section 13.4 (Assignment)) license in the Territory, without the right to grant sublicenses, under ONO Intellectual Property solely as and to the extent necessary to enable FATE to perform FATE’s obligations with respect to the Collaboration Candidates in accordance with the Joint Development Plan during the Research Term, including through the use of Third Party contractors in accordance with Section 2.2.3 (Subcontracting), (including, for the avoidance of doubt, to manufacture Collaboration Candidates pursuant to Article 3 (Manufacture and Supply)), which enabling license for a Collaboration Candidate shall expire at the end of the Research Term with respect to such Collaboration Candidate; and (ii) upon and as of the Exercise Date for a Collaboration Candidate (subject to Section 2.4.3 (Option Exercise)), ONO hereby grants to FATE a non-exclusive, royalty-free, non-transferable (except as provided in Section 13.4 (Assignment)) license in the Territory, without the right to grant sublicenses, under ONO Intellectual Property solely as and to the extent necessary to enable FATE to perform FATE’s obligations with respect to the Collaboration Products in accordance with the Agreement, including through the use of Third Party contractors in accordance with Section 2.2.3 (Subcontracting), (including, for the avoidance of doubt, to manufacture the Collaboration Product pursuant to Article 3 (Manufacture and Supply)).

5.3.2    License for Collaboration Candidates and Products.

(a)    Subject to the terms and conditions of this Agreement, ONO hereby grants to FATE (i) an exclusive (even as to ONO and its Affiliates, except to the extent necessary for ONO or its Affiliates to perform its obligations under the Collaboration), non-transferable (except as provided in Section 13.4 (Assignment)), fully-paid and royalty-free license (or sublicense, as applicable), with the right to grant sublicenses solely in accordance with Section 5.4 (License or Sublicense [***] in the FATE Territory), under the ONO Intellectual Property, to make, have made, use, sell, offer to sell, promote, distribute, import, export, label, package and otherwise Develop and/or Commercialize [***] (which is not the FATE Cell Therapy) in the FATE Territory, including through the use of Third Party contractors in accordance with Section 2.2.3, during the Term, in the Field, and (ii) a non-exclusive, non-transferable (except as provided in Section 13.4 (Assignment)), royalty-bearing license (or sublicense, as applicable), with the right to grant sublicenses under the ONO Intellectual Property, to make, have made, use, sell, offer to sell, promote, distribute, import, export, label, package and otherwise Develop and/or Commercialize the applicable FATE Cell Therapy in any country of the world on

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

country-by-country basis where this Agreement is terminated (x) [***] or (y) by FATE pursuant to either Section 11.2 (Termination for Cause), Section 11.4 (Termination for Insolvency), or Section 11.5 (Termination for Patent Challenge), including through the use of Third Party contractors in accordance with Section 2.2.3 (Subcontracting), in the Field pursuant to [***] in the event that this Agreement is terminated [***] or by FATE pursuant to either Section 11.2 (Termination for Cause), Section 11.4 (Termination for Insolvency), or Section 11.5 (Termination for Patent Challenge).

(b)    [***]

5.3.3    License upon Exercise of CDCC Option [***]. Subject to the terms and conditions of this Agreement, upon and as of FATE’s exercise of the CDCC Option pursuant to Section 2.4.4 (CDCC Option) for [***] and during the CDCC Term, ONO hereby grants to FATE a semi-exclusive (only ONO and FATE has the right to exercise its rights under this Agreement), non-transferable (except as provided in Section 13.4 (Assignment)), royalty-free license (or sublicense, as applicable) with the right to grant sublicenses solely in accordance with Section 2.4.4(d) (Sublicenses), under ONO Intellectual Property, to make, have made, use, sell, offer to sell, promote, distribute, import, export, label, package and otherwise Develop and Commercialize [***] CDCC Territory, in the Field, including through the use of Third Party contractors in accordance with Section 2.2.3 (Subcontracting).

5.4    License or Sublicense [***] in the FATE Territory. FATE shall have the right to grant one or more Sublicense through multiple tiers for the Development, manufacturing and Commercialization of [***] in the [***] Territory, at FATE’s sole discretion, with respect to the FATE Intellectual Property and rights licensed to FATE by ONO under Section 5.3 (Licenses to FATE), subject to the following:

5.4.1    If FATE enters into a Sublicense agreement to develop or commercialize [***] in the [***] Territory, then the JSC’s involvement in the Research, Development, and Commercialization of [***] in the territory of such Sublicense agreement will be subject to and subordinate to such Sublicense agreement, provided that (a) both FATE and ONO shall remain obligated to provide safety information pursuant to any safety or Pharmacovigilance Agreement entered into by the Parties with respect to [***] in each Party’s respective Territory, regardless of any Sublicense agreement; and (b) upon ONO’s request, FATE shall use Commercially Reasonable Efforts to arrange and establish a committee constituted by representatives of FATE, such Sublicensee and ONO to oversee and monitor Development and/or Commercialization of [***] on global basis.

5.4.2    With respect to the [***] shall obligate any of its Sublicensees to [***].

5.4.3    FATE shall not grant any Sublicense under FATE Intellectual Property that would materially conflict with this Agreement. FATE shall notify ONO in writing whether a Sublicensee has agreed to the terms of this Section 5.4 promptly after execution of the applicable Sublicense agreement.

5.4.4    If a Sublicensee of FATE does not agree to any or all of this Section 5.4, then FATE shall not grant to such Sublicensee the applicable reciprocal rights [***].

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

5.4.5    Notwithstanding anything herein to the contrary, to the extent that (a) [***] or (b) [***].

5.5    [***]

5.5.1    [***]

5.5.2    [***]

5.5.3    [***]

5.6    Use of Names; Logo; Patent Marking. The packaging for each Collaboration Product Commercialized by ONO under this Agreement shall be marked (to the extent required by Laws): (a) with a notice that such Collaboration Product is sold under a license from FATE and (b) with applicable patent notices relating to the FATE Patents in such a manner as may be permitted or required by Laws. To the extent permitted under Laws, the packaging and labeling for such Collaboration Product will bear both the ONO name and logo and the FATE name and FATE logo as set forth on Exhibit 5.6 (“Fate Logo”), and such names and logos will be presented with substantially equivalent prominence in any product presentations, exhibit booths, conferences, or promotion materials or activities. FATE will be responsible for registering and policing the FATE Logo in order to enable ONO to appropriately mark any packaging with the FATE Logo, to the extent permitted or required by Laws. Except as set forth in this Section 5.6 (Use of Names; Logo; Patent Marking) and Section 2.5.3 (Global Brand Strategy for Collaboration Products), no right or license, express or implied, is granted to ONO to use any trademark, trade name, trade dress, or service mark Controlled by FATE or any of its Affiliates. Likewise, no right or license, express or implied, is granted to FATE to use any trademark, trade name, trade dress or service mark Controlled by ONO or any of its Affiliates except as provided in Section 2.5.3 (Global Brand Strategy for Collaboration Products).

5.7    Third Party In-Licenses. All licenses granted under this Article 5 (Licenses), to the extent they constitute sublicenses under this Article 5 (Licenses), are subject to the relevant terms and conditions of the granting Party’s agreement with the Third Party that owns or otherwise Controls such intellectual property rights, subject further to Sections 7.5.6 (Upstream Limitations), 7.10.1 (Existing Agreements) and 9.2 (Additional Representations and Warranties of FATE). Any exclusive licenses that are granted under this Article 5 (Licenses) that constitute sublicenses are exclusive only to the extent of the exclusive nature of the license granted to the granting Party.

5.8    No Implied Licenses; Retained Rights; Government Rights.

5.8.1    No Implied Licenses, Retained Rights. No license or other right is or shall be created or granted hereunder by implication, estoppel, or otherwise. All licenses and rights are or shall be granted only as expressly provided in this Agreement. All rights not expressly granted by either Party under this Agreement are reserved by such Party and may not be used by the other Party for any purpose.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

5.8.2    Government Rights. This Agreement is expressly subject to the reservation on behalf of the U.S. government under 35 U.S.C. § 200–212 and regulations promulgated thereunder. ONO shall take all action necessary on its part to enable FATE to satisfy its obligation to substantially manufacture in the United States to the extent required under 35 U.S.C. § 200–212 and regulations promulgated thereunder.

5.9    [***]

5.9.1 [***]

[***]

[***]

5.9.2 [***]

[***]

[***]

5.10    [***]

ARTICLE 6

FINANCIAL TERMS

6.1    Upfront Option Fee. In consideration for the rights granted to ONO under this Agreement, ONO shall pay to FATE a one-time-only, non-refundable, non-creditable payment of Ten Million Dollars ($10,000,000) within [***] Business Days after the Effective Date in accordance with Section 6.6 (Manner of Payment).

6.2    Research and Development Costs.

6.2.1    ONO Research and Development. ONO shall bear, and shall be fully and individually responsible for, all costs related to research and development of the [***]. No such costs will be included in any budgets under this Agreement or Annual R&D Fees below.

6.2.2    FATE Research and Development. As consideration for FATE’s conduct of the Joint Development Plan, ONO shall pay to FATE, in accordance with Section 6.6 (Manner of Payment), annual research and development fees (“Annual R&D Fees”) [***]. As of the Effective Date, the Parties agree that such annual budget for the Joint Development Plan shall be equal to the amounts as set forth below, subject to any increase for an Unexpected Cost Increase as set forth in Section 2.3.7 (Additional Development). [***], ONO will pay a prorated amount for such Payment Quarter, calculated by multiplying the quarterly amount based on the Annual R&D Fees by a fraction equal to the total number of days in such Payment Quarter divided by ninety (90) days. [***]

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

6.3    Milestone Payments. In consideration for the rights and licenses granted to ONO under this Agreement, ONO shall make milestone payments, in accordance with Section 6.6 (Manner of Payment), to FATE described in Sections 6.3.1 [***] through 6.3.5 (Sales Milestones). The milestone payments, including [***] AABD Research Milestone Fee and Option Exercise Payments set forth in this Section 6.3 shall all be non-refundable and non-creditable and, except as expressly set forth in Sections 6.3.4 (Development Milestones) and 6.3.5 (Sales Milestones) for the milestone payments applying to each Collaboration Product [***].

6.3.1    [***]. ONO shall pay to FATE [***] Dollars ($[***]) upon delivery by ONO to FATE of the ONO Antigen Binding Domain (“[***]”).

6.3.2    AABD Research Milestone Fee. In the case ONO has not delivered to FATE the ONO Antigen Binding Domain [***] (or the end of any extended period that is mutually agreed by the Parties) and thereafter [***] ONO shall pay to FATE [***] Dollars ($[***])[***], in which ONO will be granted the license for [***] or (b) [***] Dollars ([***]) [***] in which ONO will be granted the license for [***]. For clarity, in such case ONO shall not be required to pay the [***] pursuant to Section 6.3.1 [***] above.

6.3.3    Option Exercise Payments. Upon exercise of an ONO Option, ONO shall pay FATE the option exercise payments described below (the “Option Exercise Payments”).

(a)    [***]. ONO shall pay to FATE [***] Dollars ([***]) upon the Exercise Date for [***] for further Research, Development and Commercialization of [***].

(b)    [***]. If ONO exercises the ONO Option for [***] and (i) FATE does not exercise the [***] with respect to [***] then ONO shall pay to FATE [***] Dollars ([***]) upon the earlier of (A) expiration of the CDCC Option Period and (B) the receipt by ONO of the notice from FATE with respect to such non-exercise of the CDCC Option, but in no case earlier than the Exercise Date; or (ii) FATE exercises the CDCC Option with respect to [***] then ONO shall pay to FATE [***] Dollars ($[***]) upon the receipt by ONO of the notice from FATE with respect to exercising such CDCC Option for [***] but in no case earlier than the Exercise Date; provided, however, that in the case [***], ONO shall pay to FATE [***] Dollars ([***]) upon the Exercise Date of the ONO Option, instead of paying [***] Dollars ($[***]) or [***] ($[***]), as applicable, pursuant to this Section 6.3.3(b).

6.3.4    Development Milestones. ONO shall make the milestone payments set forth below to FATE in accordance with Section 6.6 (Manner of Payment) upon the achievement of each of the corresponding milestone events for each Indication set forth in the relevant table (the

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

“Development Milestone Payments”). ONO shall notify FATE within [***] Business Days after the achievement of each milestone event in this Section 6.3.4 by or on behalf of ONO or its Affiliates or Sublicensees. Such payments shall be due to FATE for each Collaboration Product and Indication within the description in the table. If a subsequent milestone event is achieved with respect to a particular Collaboration Product before a prior milestone event for such Collaboration Product, then all such prior milestone events for the applicable Collaboration Product shall be deemed achieved upon achievement of the subsequent milestone event and shall become payable (if not previously paid). As an example, a milestone event related to [***] shall be considered achieved upon [***]. For further clarity, the development milestone events for [***] as applicable, will be deemed achieved by the [***] as applicable.

(a)    [***] in ONO Territory.

(b)    [***] in the United States.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

(c)    [***] in Europe.

(d)    [***] in Asia.

6.3.5    Sales Milestones. ONO shall pay to FATE the applicable Annual Net Sales threshold milestone payments set forth below in accordance with Section 6.6 (Manner of Payment) the first time that the Annual Net Sales by ONO, and its Affiliates and its Sublicensees, of the described Collaboration Products in the ONO Territory, or specified portion of the FATE CDCC Territory, reach or exceed the relevant amounts set forth in the table below (the “Sales Milestone Payments”). ONO shall notify FATE within [***] days after the end of the Calendar Year in which the applicable milestone event(s) is(are) achieved. For the avoidance of doubt, if more than one Annual Net Sales threshold is first achieved by a Collaboration Product in a particular Calendar Year, then all applicable milestone payments will be payable.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

(a)    [***] in the ONO Territory.

(b)    [***] in the United States.

(c)    [***] in Europe.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

(d)    [***] in Asia.

6.4    Royalty Payments. As further consideration for the rights and licenses granted to ONO under this Agreement, subject to Sections 6.4.4 (Necessary License), 6.4.5 (Royalty Deduction), [***] and 6.5 (Payments if CDCC Option is Exercised), ONO will pay FATE tiered royalties on the Annual Net Sales by ONO, its Affiliates and its Sublicensees of all Collaboration Products in the ONO Territory (other than the FATE CDCC Territory during the CDCC Term) as described in the tables below, on a country-by-country basis and on a Collaboration Product–by–Collaboration Product basis, for the applicable country in the specified ONO Territory, at the applicable royalty rates set forth in the tables below. Only one royalty payment shall be due with respect to the same sales unit of the Collaboration Product.

6.4.1    [***] in the ONO Territory.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.

6.4.2    [***] in Asia.

6.4.3    [***] Outside Asia. If FATE does not exercise the CDCC Option under Section 2.4.4 (CDCC Option), or if there is an Opt-Out for the U.S. and/or Europe following FATE’s exercise of the CDCC Option, then the royalty rates below shall apply. During the CDCC Term for the U.S., there will be no royalties due on Annual Net Sales of [***] in the United States, and during the CDCC Term for Europe, there will be no royalties due on Annual Net Sales of [***] in Europe, and instead, in each case, the Parties will share profits and losses in the applicable FATE CDCC Territory pursuant to Section 6.5 (Payments if CDCC Option is Exercised) hereof.

* Confidential Information, indicated by [***], has been omitted from this filing and filed separately with the Securities and Exchange Commission.