In this task, you're given a passage that represents a legal contract or clause between multiple parties, followed by a question that needs to be answered. Based on the paragraph, you must write unambiguous answers to the questions and your answer must refer a specific phrase from the paragraph. If multiple answers seem to exist, write the answer that is the most plausible.

[EX Q]: EXHIBIT 10.47

               MANIFEST SYSTEM SERVICES AND CO-BRANDING AGREEMENT                --------------------------------------------------

     This Manifest System Services and Co-Branding Agreement (Agreement) is                                                                --------- made and entered into as of April 27, 1999 (the Effective Date), by and                                                  -------------- between iShip.com, Inc., a Washington corporation (the Company), and Mail                                                         ------- Boxes Etc. USA, Inc., a California corporation (MBE).                                                  ---

                                    RECITALS                                     --------

     A.  The Company has developed an Internet-based shipping system.

     B.  MBE wishes to have the Company provide an Internet-based service based on the Company's Internet-based shipping system and the MBE retail manifest system to the MBE Centers (as defined below) for use in manifesting and shipping customer packages, all subject to the terms and conditions set forth in this Agreement.

     C.  The Company and MBE desire to engage in certain co-branding activities on the Internet so as to allow customers of MBE Centers to use the Company's Internet-based shipping system in a convenient manner and to list the MBE Centers as drop-off locations and retail shipping centers.

     D.  In connection with the services to be provided hereunder, the Company desires to issue to MBE a warrant to purchase up to One million three hundred thirty three thousand three hundred thirty three (1,333,333) shares (as determined pursuant to the terms of the Warrant) of Series B Preferred Stock of the Company substantially in the form attached hereto as Exhibit A (the                                                          --------- Warrant).  -------                                     AGREEMENT                                     ---------

1.   Definitions.      -----------

     The following terms are defined for the purposes of this Agreement as follows:

     (a) Acceptance shall mean MBE's acknowledgment pursuant to Section 2           ---------- below that (i) access to the Service has been granted, and (ii) the Service functions in accordance with the Specifications.

     (b) Authorized Equipment shall mean the particular type of computer           -------------------- equipment and the specifications thereof set forth in Exhibit B attached hereto                                                       --------- on which the Service is intended to be accessed and used by the MBE Centers.

     (c) Brand Features means each party's respective trademarks, trade names,           -------------- service marks, service names and distinct brand elements that appear from time to time in each party's properties, ventures and services worldwide and are protected under U.S. copyright law or as to which each party has established trademarks or trade dress rights and any modifications to the foregoing that may be created during the term of this Agreement.

     (d) Brand Guidelines means the guidelines, if any, for use of the Brand           ---------------- Features, which may be prescribed by each party from time to time during the term of this Agreement.

     (e) Bounty Customer shall mean any Company Internet Customer or Third           --------------- Party/Company Customer.

     (f) Company Internet Customer shall have the meaning set forth on Exhibit           -------------------------                                      ------- C attached hereto. -

     (g) Company Site shall mean the web site or sites of the Company on the           ------------ Internet, one of which is currently located at www.iship.com.                                                -------------

     (h) Company Technology shall mean the Internet-based manifest system of

Source: STAMPS.COM INC, 10-Q, 11/14/2000





          ------------------ the Company that allows users to, among other things, compare various shipping services, print shipping labels and/or track shipments using the Internet.

     (i) Confidential Information shall mean the Service Documentation, the           ------------------------ Specifications and any information disclosed by one party to the other pursuant to this Agreement that is in written, graphic, machine readable or other tangible form and is marked Confidential, Proprietary or in some other manner to indicate its confidential nature, including but not limited to information related to the respective parties' business, products, proposed new products, customers or related information. Confidential Information may also include oral information disclosed by one party to the other pursuant to this Agreement, provided that such information is designated as confidential at the time of disclosure and is reduced to writing by the disclosing party within a reasonable time (not to exceed thirty (30) days) after its oral disclosure, and such writing is marked in a manner to indicate its confidential nature and delivered to the receiving party.

     (j) eBay Customer shall have the meaning set forth on Exhibit C.           -------------                                      ---------

     (k) In-Center Customer shall have the meaning set forth on Exhibit C.           ------------------                                      ---------

     (l) Intellectual Property Rights means all rights in and to trade           ---------------------------- secrets, patents, copyrights, trademarks, know-how, as well as moral rights and similar rights of any type under the laws of any governmental authority, domestic or foreign, including rights in and to all applications and registrations relating to any of the foregoing.

     (m) Link means a URL hidden behind a formatting option that may take the           ---- form of a colored item of text (such as a URL description), logo or image, and which allows a user to automatically move to or between web pages or web sites.

     (n) Listings shall mean the listing of the names, addresses, pricing and           -------- other identifying information of each MBE Center which is a party to a Subscription Agreement (as defined in Section 3(b)  [Service]).

     (o) Manifest means the exclusive MBE retail manifest system to be           -------- developed by the parties hereto in accordance with the Specifications.

                                      -2-

     (p) MBE Center shall mean each franchise of MBE operating a franchise           ---------- retail outlet within the United States which enters into a Subscription Agreement.

     (q) MBE-Generated Customer shall mean any In-Center Customer, Remote           ---------------------- Self-Service Customer or MBE Internet Customer.

     (r) MBE Internet Customer shall have the meaning set forth on Exhibit C.           ---------------------                                      ---------

     (s) MBE Sites shall mean the web sites operated by MBE on the Internet           --------- during the term of this Agreement, including but not limited to the websites currently located at www.mbe.com and www.mbeonline.com.

     (t) Remote Self-Service Customer shall have the meaning set forth on           ---------------------------- Exhibit C. ---------

     (u) Specifications shall mean the specifications for the Manifest set           -------------- forth on Exhibit D, as updated from time to time during the term of this          --------- Agreement in accordance with the terms of this Agreement.

     (v) Stations shall mean the retail manifest shipping stations within each           -------- MBE Center and the remote off-site manifest shipping stations, in each case within the United States, of any MBE Center utilizing Authorized Equipment.

     (w) Service shall mean the combination of the Company Technology and the           ------- Manifest.

     (x) Service Documentation shall mean all manuals, instructions or other           ---------------------

Source: STAMPS.COM INC, 10-Q, 11/14/2000





information provided by the Company to MBE or MBE Centers which directly relate to the functionality and operation of the Service.

     (y) Third Party/Company Customer shall have the meaning set forth on           ---------------------------- Exhibit C. ---------

     (z) Third Party/MBE Customer shall have the meaning set forth on           ------------------------ Exhibit C. ---------

     (aa) Update shall mean any and all bug fixes, error corrections, and            ------ maintenance updates of the Service.

2.   Development, Delivery and Acceptance.      ------------------------------------

     (a) Development License. Each party hereby grants to the other party a          ------------------- [***]* (except as provided in Section 18(b)  [Assignment](Assignment)), [***]* (with no  ---                                                         --- right to sublicense except as set forth below) under all of its Intellectual Property Rights to use, reproduce, modify, and create derivative works of each party's preexisting Intellectual Property Rights solely as is reasonably and actually necessary to complete the development of the Service. Each party may grant sublicenses to contractors or subcontractors it engages to work on the Service, provided

----------      *  Confidential treatment has been requested for the bracketed portion. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

                                      -3-

that any such subcontractor has entered into an enforceable agreement reasonably acceptable to the other party relating to the assignment of Intellectual Property Rights.

     (b) Delivery. The Company shall use its commercially reasonable best          -------- efforts to complete the design of the Manifest and the Service in a timely and professional manner consistent with commercial software industry standards on or before August 1, 1999 and deliver the URL and the access codes or passwords necessary to use the Service to MBE and each subscribing MBE Center on or before September 1, 1999. MBE and MBE Centers shall provide any assistance reasonably requested by the Company in connection with completing such design and effecting such delivery. The parties shall cooperate to implement a beta roll-out of the Service in approximately 100 Designated Locations of MBE Centers selected by mutual agreement of the Company and MBE on or before September 1, 1999, and thereafter shall mutually agree on a plan to make the Service available to all MBE Centers by no later than October 1, 1999.

     (c) Inspection. Following the completion of the beta roll-out and testing          ---------- of the Service, MBE shall have a period of twenty (20) business days to undertake inspection and testing of the Manifest to determine conformance with applicable Specifications. The Company shall provide any assistance reasonably requested by MBE in assessing such conformance. If MBE finds that any part of the Manifest does not conform with the applicable Specifications, MBE shall, within the inspection period, notify the Company and provide a detailed written description of such nonconformance. Following confirmation by the Company of such nonconformance, the Company will alter the Manifest within a reasonable time to correct such nonconformance.

     (d) Acceptance. Upon verification by MBE that the Manifest conform with the          ---------- Specifications in all material respects, or if MBE fails to notify the Company within the twenty (20) business day inspection period, the Service shall be deemed Accepted. MBE's sole remedy for correction of problems after Acceptance shall be under the Warranties set forth in Section 11.

3.   Provision of Service.      --------------------

     (a) Scope of Agreement. Any Service Documentation provided to MBE and/or          ------------------ MBE Centers by the Company shall be subject to all terms and conditions of this Agreement. All use of and access to the Service by MBE and all MBE Centers shall also be subject to all terms and conditions of this Agreement.

     (b) Service. The Company will operate the Service at its network operating          -------

Source: STAMPS.COM INC, 10-Q, 11/14/2000





center. The Company shall bear all costs associated with the network operating center, including without limitation hardware and software, networking equipment and bandwidth charges, redundant storage and/or mirroring across multiple geographic locations, and maintenance; provided, however, that Company and MBE                                        --------  ------- shall each pay one-half of the costs and expenses associated with transmitting information and data from the servers maintained or used by the Company to the VSAT network hub, including hardware and backhaul circuits. The Company will make the Service available to MBE Centers via one or more secure Internet sites. Each MBE Center approved by MBE that wishes to participate in the Service shall enter into a Subscription Agreement with the Company in a form to be mutually agreed upon by the parties, which form

                                      -4-

shall include appropriate obligations of the MBE Centers as set forth in this Agreement (the Subscription Agreement). MBE agrees to use its commercially                 ---------------------- reasonable best efforts to facilitate the execution of a Subscription Agreement by each participating MBE Center within a reasonable amount of time after the Effective Date. The Company hereby grants the MBE Centers a [***]* under all of                                                              --- Company's Intellectual Property Rights solely to access and use the Service in accordance with the terms and conditions of this Agreement and the Subscription Agreement.

     (c) Authorized Equipment. Each MBE Center shall be responsible for          -------------------- obtaining, installing and maintaining the Authorized Equipment at its sole cost and expense. The Subscription Agreement shall provide that an MBE Center that accesses or uses the Service on any hardware or other equipment, or in conjunction with any software, that does not constitute Authorized Equipment does so as its own risk, and the Company shall not be liable for any failure of the Service on hardware or other equipment, or in conjunction with any software, that does not constitute Authorized Equipment.

     (d) Exclusivity          -----------

         (i)   The Company shall not enter into any agreement or arrangement,      including without limitation any sale, license, service agreement,      co-branding agreement, co-marketing agreement or linking agreement with any      provider of manifesting or shipping services through non-carrier retail      shipping locations; provided, however, that:

               (A) the Company may provide listings of carrier drop-boxes or      carrier-owned counter drop-off locations specific to a particular carrier      (including, without limitation, locations within retail establishments) on      the Company Site, provided that such listings do not include retail      shipping locations, including UPS authorized shipping outlets, FedEx      authorized shipping centers and other commercial mail receiving agencies;      and

               (B) the Company may enter into any such agreement or arrangement      so long as MBE is given advance written notice of such agreement or      arrangement and such agreement or arrangement prohibits the use of the      Manifest or any Company Technology to manifest or ship packages for retail      customers and provided further that Company terminates service to any such      entity that uses the Manifest or any Company Technology to serve retail      customers.

         (ii)  MBE shall not enter into any agreement or arrangement with any      provider of an online or Internet-based manifest system other than the      Company.

         (iii) The Company may, at its option, terminate the exclusivity      provisions set forth in this Section 3(d)  [Exclusivity] upon the occurrence of any of the      following events: (A) MBE

----------      *  Confidential treatment has been requested for the bracketed portion. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

                                      -5-

     and all MBE Centers together fail to ship at least [***]* packages                                                          ---      manifested by the Service in any period of three (3) full months commencing      on the earlier of (x) March 1, 2000, and (y) the use of the Service to      manifest packages by at least [***]* MBE Centers (other than any such                                     ---      failure which is directly caused by an event of force majeure (as set forth      in Section 18(e)  [Force Majeure] or by the failure of the Service to operate in accordance      with the Specifications or by the Company's breach of any of its      obligations hereunder), or (B) MBE ceases to own at least [***]* shares of

Source: STAMPS.COM INC, 10-Q, 11/14/2000





                                                                ---      common stock of the Company (calculated on an as-converted basis and as      adjusted for any stock split, stock dividend, recapitalization or similar      transaction).

         (iv)  Beginning 18 months after the Effective Date, MBE may, at its      option, terminate the exclusivity provisions set forth in this Section 3(d)  [Exclusivity]      if (A) MBE and all MBE Centers together fail to ship at least [***]*                                                                     ---      packages manifested by the Service in any three (3) full month period      ending 18 months after the Effective Date and (B) such failure to meet the      volume requirements set forth above is related to the unsatisfactory      performance of the Service as evidenced by written communications from a      commercially significant number of MBE Centers.

4.   Support; Training.      -----------------

     (a) Updates and Service Revisions. The Company will make Updates to the          ----------------------------- Service in accordance with the requirements set forth in the Specifications at no charge for the entire term of this Agreement. Without limiting the foregoing, the Service shall be updated from time to time during the term of this Agreement to include accurate and current (i) Listings and (ii) pricing and service descriptions for each carrier supported by the Manifest, in each case as soon as reasonably practicable following the receipt by the Company of such Listings, pricing and service descriptions. As reasonably necessary, the Company shall update the Specifications to reflect such Updates and shall provide a copy of same to MBE at least once per calendar quarter. If the Company develops additional Intellectual Property Rights that are made available without development charge to other customers of the Company, the Company will also make such Intellectual Property Rights available to MBE without development charge.

     (b) MBE Center Support. MBE shall have the right to designate in writing up          ------------------ to five (5) second-level support personnel individuals and alternates to such individuals as contact persons (the Contact Persons) (although the parties may                                      --------------- mutually agree to increase such number of Contact Persons to ensure adequate support exists for the MBE Centers) Such Contact Persons shall interface with the MBE Centers with respect to matters relating to the Service and may transmit request assistance and descriptions of problems encountered with the Service to the Company via electronic mail, fax, or overnight mail. The Company will provide telephone support to the Contact Persons at a level and in such a manner as the parties mutually agree to be adequate. The Company shall use reasonable efforts to provide the Contact Persons with answers and solutions to problems encountered by MBE or the MBE Center in the course of MBE's or MBE Centers' normal and proper use of the Service in accordance with the terms and

----------      *  Confidential treatment has been requested for the bracketed portion. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

                                      -6-

conditions of this Agreement. Only the Contact Persons may contact the Company in connection with matters relating to technical support, and the Company shall have no obligation to answer questions or assist MBE or MBE Centers' personnel other than the Contact Persons. The Company shall provide a reasonable amount of training and training materials to the Contact Persons to provide the Contact Persons with information concerning the Service and to assist the Contact Persons in providing support to the MBE Centers and other personnel of MBE. MBE shall take reasonable steps to ensure that MBE Centers and personnel of MBE other than the Contact Persons do not contact the Company directly with respect to issues relating to support of the Service. The Company shall take reasonable steps to provide adequate industry standard support of all Internet users of the Company Site and other sites using the Company Technology. MBE and MBE Centers may refer all support questions relating directly to the Company Site or the Company Technology to the Company in accordance with the foregoing.

5.   Records; Audits.      ---------------

     The Company shall maintain complete and accurate records of the number of packages shipped by the MBE Centers using the Service and all payments due or accrued to the Company by MBE Centers hereunder. MBE shall, at any time during the term of this Agreement, be entitled to audit all such records upon ten (10) days written notice to the Company, in order to confirm the accuracy of such records and conformance with the terms and conditions of this Agreement; provided, however, that no more than one (1) such audit may be conducted in any --------  ------- ninety (90)-day period. Any such audit shall be performed at MBE's expense during the Company's normal business hours; provided, however, that in the event                                             --------  ------- that such audit reveals any non-compliance with any term of this Agreement by the Company, the Company shall bear the cost of such audit.

Source: STAMPS.COM INC, 10-Q, 11/14/2000





6.   Additional Development.      ----------------------

     (a) Request for Proposal. From time to time, MBE may request additional          -------------------- custom software or other custom development to be provided by the Company under this Agreement. If MBE has a requirement for a specific enhancement or modification of the Service, MBE will identify to the Company in writing a summary of such requirement (the Request for Proposal). Such Request for                                   -------------------- Proposal will provide a description sufficient to enable the Company to determine the general demand for and its plans, if any, to develop the same or similar enhancements or modifications.

     (b) Terms and Conditions. If the Company decides that it has the technical          -------------------- ability to fulfill the Request for Proposal, then the Company will respond to MBE within forty-five (45) days of receiving the Request for Proposal, stating the terms and conditions upon which the Company would be able to undertake such development, including, but not limited to, changes to the Specifications, custom development charges, and a proposed delivery schedule.

     (c) Development and Billing Rates. The Company shall perform such          ----------------------------- development in accordance with the highest professional standards. The cost of such development shall be the Company's standard billing rates then in effect (in addition to reimbursement of any expenses, in accordance with the Company's standard practices), which shall be paid by MBE within thirty (30) days of receipt of an invoice therfor. No additional fees or bounties shall be owed or

                                      -7-

payable in connection with such development, unless such development results in a revenue-generating feature or functionality of the Service which is outside of the scope of the Specifications, in which case the parties shall negotiate in good faith to mutually agree upon a reasonable fee mechanism therefor and/or reimbursement of development expenses. Upon completion of such additional development, the Company shall update the Specifications to reflect such additional development and shall provide a copy of same to MBE.

     (d) Credit. MBE shall receive a credit applicable to such billing rates          ------ (but not to reimbursement of expenses) for any development performed by the Company under this Section 6 equal to [***]* of the total fees paid by MBE and                                        --- all MBE Centers, which credit shall be reflected on a monthly statement by the Company to MBE. Any such credit must be used within twelve (12) months of receipt of payment by the Company.

7.   Ownership.      ---------

     (a) General. The Company will have full and exclusive right, title and          ------- ownership interest in and to the Service and the Specifications and the Intellectual Property Rights therein. The Company is, and shall be, the sole owner of all inventions, discoveries and/or enhancements relating to the Service and the Specifications, including all copies, translations, compilations, partial copies, derivative works and updated works, whether partial or complete and whether or not merged into other program materials and whether in written or unwritten form. Except as authorized by this Agreement (including MBE's right to use the Specifications as set forth in Section 15(d)(iv)  [Effect of Termination]) or as otherwise agreed in writing, MBE and MBE Centers may not, directly, or through any person or entity, in any form or manner, copy, distribute, reproduce, incorporate, use or allow access to the Service or the Specifications, or modify, prepare derivative works of, decompile, reverse engineer, disassemble or otherwise attempt to derive source code or object code from the Service or the Specifications.

     (b) Proprietary Notices. MBE will ensure that all copies of Service          ------------------- Documentation made in accordance with this Agreement will incorporate copyright and other proprietary notices in the same manner that the Company incorporates such notices in the Service or in any manner reasonably requested by the Company, and MBE agree not to delete or modify any such notices incorporated in the Service Documentation in any respect. MBE will also permit the Company to enter any of MBE's premises during regular business hours to inspect the use of the Service in any reasonable manner. The Subscription Agreement shall provide that MBE Centers will comply with the terms of this Section 7(b)  [Proprietary Notices].

     (c) List of Trademarks. Each party (the Granting Party) hereby grants the          ------------------                   -------------- other party (the Using Party) a limited license to use its Brand Features in                   ----------- connection with the marketing, distribution, provision of access to, and support of the Service. The Using Party agrees that such Brand Features are the exclusive property of the Granting Party and that all usage of such marks and any goodwill established by the use of such marks shall inure to the benefit of

Source: STAMPS.COM INC, 10-Q, 11/14/2000





the Granting Party and that this Agreement does not confer any goodwill or other

----------      *  Confidential treatment has been requested for the bracketed portion. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

                                      -8-

interests in such marks on the Using Party The Using Party will comply with the Granting Party's Brand Guidelines. The Using Party shall provide to the Granting Party examples of any use of the Brand Features of the Granting Party prior to use. The Using Party shall modify or discontinue such use if requested by the Granting Party. Neither party shall adopt or attempt to register any trademark, trade name, or service mark which is confusingly similar to the other party's Brand Features such as Ship Mailboxes (and the like).

     (d) Customer Information. The Company and MBE shall jointly own (without          -------------------- duty to account) all customer lists and related customer data gathered through the use of the Service by customers of MBE and MBE Centers (Customer Data).                                                              ------------- During the term of this Agreement, neither party shall provide any Customer Data to any third party (other than MBE Centers or an affiliate of MBE or the Company) without the prior written consent of the other party The Company shall initially provide the Customer Data to MBE in acceptable electronic format as soon as practicable following the reasonable request of MBE, and, once MBE (at its sole cost and expense) has implemented an appropriate means to warehouse the Customer Data, the parties shall take reasonable steps to transfer all existing Customer Data to MBE and implement a system whereby the Customer Data is automatically downloaded and provided to MBE on a periodic basis. The Company agrees to retain the Customer Data in accordance with the Company's own data retention policies, and in any case for no less than 13 months from the creation of such Customer Data. The Company, MBE, affiliates of the Company and MBE, and the MBE Centers may each use the Customer Data for marketing and other purposes in accordance with a mutually agreed upon privacy policy and in accordance with any mutually agreed upon privacy policy displayed to customers in connection with the Service. Notwithstanding the foregoing, the Company agrees not to use any Customer Data to solicit any MBE-Generated Customers with respect to any services offered by the Company; provided, however, that the Company may use Customer Data to solicit such customers who have a shipping account with a carrier or with respect to services not offered by MBE and the MBE Centers. Notwithstanding the foregoing, MBE agrees not to use any Customer Data in any manner which would reasonably be expected to eliminate any Bounty Package payment to the Company hereunder.

     (e) Reserved Rights. Without limitation of the foregoing, each party          --------------- reserves all rights other than those expressly granted in this Agreement, and no licenses are granted except as expressly set forth herein.

     (f) Notices. Each party agrees to display mutually agreeable trademark and          ------- copyright notices or legends of the other party when using such other party's Brand Features. Each party shall in advance submit to the other party the proposed placement of such notices or legends (including, without limitation, the place and manner of incorporation into electronic media or transmissions), and such other party shall have the right, acting reasonably, to approve the same.

8.   Payments; Taxes.      ---------------

     (a) Basic Fee. In consideration for the Service provided hereunder, for          --------- each package shipped utilizing the Service (other than a package which is shipped first class by the U.S. Postal

                                      -9-

Service), the Company shall be entitled to receive the amount of [***]* (the                                                                   --- Basic Fee). MBE agrees to use its commercially reasonable efforts to execute  --------- agreements, or to facilitate the execution of agreements among the appropriate parties, so that such Basic Fee is paid to the Company directly from the carrier which ships such package no later than fifteen (15) days following the end of the month in which such package was shipped. If MBE is unable, despite its commercially reasonable efforts, to facilitate the execution of such an agreement with one or more carriers, the Basic Fee shall be paid by each MBE Center directly pursuant to the terms of the Subscription Agreement.

     (b) Bounty Fee. In further consideration for the Service and the other          ---------- obligations of the Company hereunder, for each package shipped by or through an MBE Center by a Bounty Customer who pays the shipping rates charged by such MBE

Source: STAMPS.COM INC, 10-Q, 11/14/2000





Center, (Bounty Package), the Company shall be entitled to receive the           -------------- following amounts (the Bounty Fee) from each such MBE Center, for Bounty                         ---------- Packages shipped during each calendar month:

         (i)   in the event that less than [***]* Bounty Packages shall have                                             --- been shipped by the MBE Centers during the twelve (12) full months prior to the shipping of such Bounty Package (or, if such information is not yet available for the month prior to the month in which such Bounty Package is shipped, the most recent twelve (12) full months for which such information is available) (the Measurement Period), the amount of [***]* per Bounty Package shipped via       ------------------                   --- air transportation and the amount of [***]* per Bounty Package shipped via                                       --- ground transportation;

         (ii)  in the event that at least [***]* but less than [***]* Bounty                                            ---                  --- Packages have been shipped by the MBE Centers during the Measurement Period, the amount of [***]* per Bounty Package shipped via air transportation and the            --- amount of [***]* per Bounty Package shipped via ground transportation;            ---

         (iii) in the event that at least [***]* but less than [***]* Bounty                                            ---                  --- Packages shall have been shipped by the MBE Centers during the Measurement Period, the amount of [***]* per Bounty Package shipped via air transportation                        --- and the amount of [***]* per Bounty Package shipped via ground transportation;                    --- and

         (iv)  in the event that at least [***]* Bounty Packages shall have been                                            --- shipped by the MBE Centers during the Measurement Period, the amount of [***]*                                                                          --- per Bounty Package shipped via air transportation and the amount of [***]* per                                                                      --- Bounty Package shipped via ground transportation.

     (c) eBay Fee. In further consideration for the Service and the other          -------- obligations of the Company hereunder, for each package shipped by or through an MBE Center by an eBay Customer (eBay Package), the Company shall be entitled                                  ------------ to receive the following amounts from such MBE Center for eBay Packages shipped during each calendar month, in each case

----------      *  Confidential treatment has been requested for the bracketed portion. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

                                      -10-

after deduction of the lesser of (x) [***]* and (y) the amount paid or to be                                       --- paid by such eBay Customer directly to the Company with respect to the shipment of such package (the eBay Fee):                       --------

         (i)   in the event that at least [***]* but less than [***]* eBay                                            ---                  --- Packages have been shipped by MBE and the MBE Centers during the Measurement Period, the amount of [***]* per eBay Package shipped via air transportation and                        --- the amount of [***]* per eBay Package shipped via ground transportation;                ---

         (ii)  in the event that at least [***]* but less than [***]* eBay                                            ---                  --- Packages shall have been shipped by the MBE Centers during the Measurement Period, the amount of [***]* per eBay Package shipped via air transportation and                        --- the amount of [***]* per eBay Package shipped via ground transportation; and                ---

         (iii) in the event that at least [***]* eBay Packages shall have been                                            --- shipped by the MBE Centers during the Measurement Period, the amount of [***]*                                                                          --- per eBay Package shipped via air transportation and the amount of [***]* per                                                                    --- eBay Package shipped via ground transportation.

Source: STAMPS.COM INC, 10-Q, 11/14/2000





     (d) Payment Cycle. The Company shall bill and collect all amounts due to          ------------- the MBE Centers for Bounty Packages and eBay Packages from each Bounty Customer or eBay Customer, as the case may be, by processing credit card transactions over the Internet. The Company shall pay such amounts, less the relevant Bounty Fee or eBay Fee then in effect, to MBE on the next business day or as soon as reasonably practicable (but in any event within one week) following the shipment date of each package, and MBE agrees to distribute such amounts to the MBE Centers. At the Company's option, Bounty Customers or eBay Customers may also be entitled to pay directly for the shipment of such Bounty Package or eBay Package at MBE Centers, and the Company shall be entitled to deduct the relevant Bounty Fee or eBay Fee then in effect from any payments due to such MBE Center for shipment of Bounty Packages, eBay Packages or otherwise.

     (e) Right of Offset. In the event of any default in payment by an MBE          --------------- Center under this Section 8 which continues uncured for a period of thirty (30) days, in addition to any rights or remedies which the Company may have at law or equity or pursuant to this Agreement, the Company shall have the right (but not the obligation) to (i) terminate providing the Service to such MBE Center and (ii) offset any amounts owed to the Company by such MBE Center from any payments owed to such MBE Center by the Company.

     (f) Taxes. MBE shall pay or reimburse the Company for all taxes, duties and          ----- assessments imposed on MBE or the Company in connection with the license or use of the Service by MBE under this Agreement, including without limitation all sales, use, excise and other taxes and duties, excluding only taxes based upon the Company's net income. MBE shall

----------      *  Confidential treatment has been requested for the bracketed portion. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

                                      -11-

hold the Company harmless from all claims and liability arising from MBE's failure to report or pay any such taxes, duties and assessments.

     (g) [***]*           ---

     (h) Independent MBE Centers. Notwithstanding any other provision of this          ----------------------- Agreement, Company acknowledges and agrees that each participating MBE Center is an independently owned and operated franchise and that MBE is not responsible for any debts or acts or omissions of its franchisees. Each use by an MBE Center of the Service shall be pursuant to the terms and conditions of a Subscription Agreement and each participating MBE Center shall be responsible for paying to Company any charges incurred. Company further acknowledges that each participating MBE Center may choose to make the Service (or some portion thereof) available to customers of MBE Centers.

9.   Co-Marketing Obligations.      ------------------------

     (a) Listings. MBE shall supply and regularly update the Listings, and the          -------- Company shall include the Listings in the Company Site and shall use commercially reasonable best efforts to include such Listings on other third party web sites utilizing the Company Technology.

     (b) Mutual Links. During the term of this Agreement, each party will ensure          ------------ that the relevant pages in each party's website will include Links to the other party's site(s). Without limiting the foregoing, and within the first three (3) months following the Effective Date, the Company shall assist MBE at no additional charge in developing a series of Links between the MBE Site and the Company Site. The purpose of such Links shall be to allow MBE Internet Customers to access certain agreed-upon features provided by the Company Site. At a minimum, such functionality shall be equivalent to that provided by the Company Site to public Internet users. As mutually agreed upon by the parties, the parties may place advertising banners promoting their products and services on appropriate pages of the other party's website.

     (c) Marketing and Public Relations. So long as such activities are in          ------------------------------ compliance with MBE Brand Guidelines then in effect (i) the Company shall display the logo of MBE on the Company Site and identify MBE as the exclusive retail shipping partner of the Company, (ii) to the extent reasonably practicable, the Company shall include the logo of MBE on every carrier or shipping label generated pursuant to this Agreement and (iii) the parties agree to use reasonable efforts to cooperate to develop a co-branded Company/MBE logo to display on Internet-generated shipping labels generated pursuant to this Agreement.

Source: STAMPS.COM INC, 10-Q, 11/14/2000





10.  Confidential Information.      ------------------------

     (a) Limited Access. MBE and MBE Centers agree not to provide or otherwise          -------------- make available any Service Documentation or other Confidential Information of the Company to any person other than employees, consultants, contractors or agents of MBE and MBE Centers with a

----------      *  Confidential treatment has been requested for the bracketed portion. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

                                      -12-

need to use such Service Documentation or Confidential Information in accordance with the terms of this Agreement.

     (b) Confidentiality. Each party shall treat as confidential all          --------------- Confidential Information of the other party, shall not use such Confidential Information except as set forth in this Agreement, and shall use reasonable efforts not to disclose such Confidential Information to any third party. Without limiting the foregoing, each of the parties shall use at least the same degree of care which it uses to prevent the disclosure of its own confidential information of like importance to prevent the disclosure of Confidential Information disclosed to it by the other party under this Agreement. Each party shall promptly notify the other party of any actual or suspected misuse or unauthorized disclosure of the other party's Confidential Information.

     (c) Exceptions. Each party agrees not to disclose or otherwise make such          ---------- Confidential Information available to third parties without the other party's prior written consent except to the extent that the Confidential Information (i) was in the public domain at the time it was disclosed or has entered the public domain through no fault of such party, (ii) was known to such party, without restriction, at the time of disclosure, as demonstrated by files in existence at the time of disclosure, (iii) is disclosed with the prior written approval of the other party, (iv) was independently developed by such party without any use of Confidential Information, (v) became known to such party, without restriction, from a source other than the other party without breach of this Agreement by such party and otherwise not in violation of the other party's rights, (vi) is required to be disclosed under securities laws or (vii) is disclosed pursuant to the order or requirement of a court, administrative agency, or other governmental body; provided, however, that such party shall use                                     --------  ------- all reasonable efforts to provide prompt, written, and sufficient advance notice thereof to the other party to enable the other party to seek a protective order or otherwise prevent or restrict such disclosure. Each party agrees that to take appropriate action by instruction, agreement, or otherwise with its employees, agents and representatives to satisfy such party's obligations under this Agreement with respect to use, copying, modification, protection and security of Confidential Information.

     (d) Return of Confidential Information. Upon expiration or termination of          ---------------------------------- this Agreement, each party shall return all Confidential Information received from the other party.

     (e) Confidentiality of Agreement. Each party shall be entitled to disclose          ---------------------------- the existence of this Agreement, but agrees that the terms and conditions of this Agreement shall be treated as Confidential Information and shall not be disclosed to any third party; provided, however, that each party may disclose                               --------  ------- the terms and conditions of this Agreement; (i) as required by any court or other governmental body; (ii) as otherwise required by law, (iii) to legal counsel of the parties; (iv) in confidence, to accountants, banks, and financing sources and their advisors; (v) in connection with the enforcement of this Agreement or rights under this Agreement; or (vi) in confidence, in connection with an actual or proposed merger, acquisition, or similar transaction.

11.  Representations, Warranties and Covenants.      -----------------------------------------

     (a) Warranty. Company represents and warrants that during the term of this          -------- Agreement the Service shall confirm to its specifications and the Specifications in all material

                                      -13-

respects, provided that the Service is properly used in accordance with the terms of this Agreement and the Subscription Agreement, and shall not contain a higher number of, or more serious errors, than would be expected by a reasonable

Source: STAMPS.COM INC, 10-Q, 11/14/2000





commercial user of a service similar to the Service.

     (b) Outages. After Acceptance and during the term of this Agreement,          ------- Company will use its best efforts to make the Service available to the MBE Centers from 4 a.m. to 9 p.m. PST every day. Scheduled maintenance which may result in an interruption to the Service shall be performed outside of these hours. Each party shall provide the other party with reasonable and prompt notification of all known failures of the Service to be operational during these hours (Outages). The Company shall make qualified personnel available to MBE personnel by telephone, e-mail or pager (response within twenty (20) minutes) for the reporting of Outages at no additional charge. Company will then use its best efforts to resolve the Outage as soon as possible. Within six months of the Effective Date, the Company and MBE will jointly develop a disaster recovery plan outlining plans to respond to Outages.

     (c) No Conflicts. The Company is not currently subject and throughout the          ------------ term will not be subject to any obligations or disabilities that will or might prevent or interfere with fully keeping and performing all of the agreements, covenants and conditions to be kept or performed hereunder, and the Company has not made nor will make any agreement, commitment, grant or assignment, and will not do, or omit to do, any act or thing that could or might interfere or impair the complete enjoyment of the rights granted and the Services to be provided hereunder.

     (d) Originality. The Company represents and warrants that it currently has          ----------- and throughout the term will have full title to and ownership of (or licenses to) the Service and all Intellectual Property Rights embodied in or used in connection therewith, free and clear of liens, claims and encumbrances, and that it has full power and authority to grant the rights provided herein.

     (e) Year 2000. Company represents, warrants and covenants that the Service          --------- includes design, performance and functionality such that the Service will not generate any invalid and/or incorrect date-related results when used during any year prior to, during or after the calendar year 2000.

     (f) Remedies. The Company's sole and exclusive liability and MBE's sole and          -------- exclusive remedy for breach of the representations and warranties set forth in this Section 11 shall be, at the Company's election, to either (i) use its best efforts to make the Service perform in accordance with the Specifications in all material respects as soon as reasonably practicable, or (ii) return the Fees paid by MBE and MBE Centers for the Service in which case MBE would have the right to either terminate the entire Agreement or the portions of the Agreement affected by breach of the representation and warranties. In the event that the Company elects (i) of this sub-section in accordance with the terms and conditions set forth herein and is unable to make the Service perform in accordance with the Specifications in all material respects within twenty one (21) days after such election, MBE may then elect to continue to proceed under (i) or MBE may elect to proceed under (ii) of this sub-section.

                                      -14-

     (g) Disclaimer. EXCEPT FOR THE EXPRESS WARRANTIES STATED ABOVE, NEITHER          ---------- PARTY MAKES ANY PROMISES, REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, WITH RESPECT TO THE SYSTEM OR THE MANIFEST, INCLUDING ITS CONDITION, ITS CONFORMITY TO ANY REPRESENTATION OR DESCRIPTION, OR THE EXISTENCE OF ANY LATENT OR PATENT DEFECTS, AND EACH PARTY SPECIFICALLY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.

12.  Indemnity for Patent or Copyright Infringement.      ----------------------------------------------

     (a) Indemnity. The Company will defend, at its expense, any action brought          --------- against MBE and its directors, officers, employees, agents, affiliates, successors, assigns or franchisees (Indemnitees) based upon a claim that the Service used properly in accordance with the terms of this Agreement and the Subscription Agreement infringes a U.S. patent or copyright or misappropriates a trade secret under U.S. law (a Claim). The Company further agrees to pay all damages and costs (including reasonable attorneys' fee and expert witness fees) incurred by any Indemnitee in connection with such Claim. The Company shall have sole control of any such action or settlement negotiations. Without the consent of MBE, which shall not be unreasonably withheld, the Company shall not settle any such Claim in a manner that (i) imposes damages or costs on any Indemnitee not covered by the Company hereunder or (b) imposes any injunctive or other non-monetary relief on any Indemnitee. MBE shall notify the Company promptly in writing of each such Claim and gives the Company all authority, information and assistance, at the Company's expense, reasonably necessary to settle or defend such claim.

     (b) Remedy Options. If the Service becomes, or in the opinion of the

Source: STAMPS.COM INC, 10-Q, 11/14/2000





         -------------- Company may become, the subject of a claim of infringement of any U.S. patent or copyright, the Company shall notify MBE, and the Company may, at its option: (i) procure for MBE and MBE Centers the right to use the Service free of any liability or (ii) replace or modify the Service to make it non-infringing.

     (c) Sole and Exclusive Liability. THIS SECTION 12 SETS FORTH THE SOLE AND          ---------------------------- EXCLUSIVE LIABILITY OF THE COMPANY FOR INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.

     (d) Exclusions from Indemnification. The Company assumes no liability, and          ------------------------------- shall have no obligation to defend or pay any amounts to any Indemnitee hereunder for (i) any method or process in which the Service may be used by MBE or any MBE Center which is not set forth in the Specifications, (ii) any improper use of the Service by an Indemnitee or (iii) the combination, operation or use of the Service with non-Company software or data, if such infringement could have been avoided but for the combination, operation or use of the Service with such programs or data.

13.  Indemnification.      ---------------

     (a) Indemnification by the Company. The Company, at its own expense, will          ------------------------------ indemnify, defend and hold harmless MBE, and its employees, franchisees, representatives and

                                      -15-

agents, against any claim, suit, action, or other proceeding brought against MBE or such party, to the extent that such claim, suit, action or other proceeding is based on or arises from.

         (i)   any misrepresentation or breach or representation or warranty of the Company contained herein; or

         (ii)  any breach of any covenant or agreement to be performed by the Company hereunder.

     The Company will pay all costs, damages, and expenses, including, but not limited to, reasonable attorneys' fees and costs awarded against or otherwise incurred by MBE in connection with or arising from any such claim, suit, action or proceeding attributable to any such claim.

     (b) Indemnification by MBE. MBE, at its own expense, will indemnify, defend          ---------------------- and hold harmless the Company, and its employees, representatives and agents, against any claim, suit, action, or other proceeding brought against the Company or such party, to the extent that such claim, suit, action or other proceeding is based on or arises from:

         (i)   any misrepresentation or breach of representation or warranty of MBE contained herein; or

         (ii)  any breach of any covenant or agreement to be performed by MBE hereunder.

     MBE will pay all costs, damages, and expenses, including, but not limited to, reasonable attorneys' fees and costs awarded against or otherwise incurred by the Company in connection with or arising from any such claim, suit, action or proceeding attributable to any such claim.

     (c) Procedures. Each party's obligation to indemnify the other hereunder          ---------- shall be conditioned upon (i) the indemnified party providing the indemnifying party with prompt notice of any claim that could lead to a claim for indemnification, (ii) the indemnified party permitting the indemnifying party to assume and control the defense of such action, with counsel chosen by the indemnifying party (who shall be reasonably acceptable to the indemnified party) and (iii) the indemnified party not entering into any settlement or compromise of any such claim without the indemnifying party's prior written consent, which shall not be unreasonably withheld or delayed.

                                      -16-

14.  Limitation of Liability. Notwithstanding anything to the contrary in      ----------------------- this Agreement, in no event shall either party's liability under any provision of this Agreement or otherwise arising out of or related to this Agreement (other than payments due or accrued under Section 8, exceed the amounts paid by MBE and the MBE Centers to the Company pursuant to this Agreement. The parties further agree that NEITHER PARTY WILL BE LIABLE FOR ANY LOST PROFITS, FOR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES OR FOR ANY CLAIM OR DEMAND AGAINST A PARTY BY ANY OTHER PARTY. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR

Source: STAMPS.COM INC, 10-Q, 11/14/2000





CONSEQUENTIAL, INCIDENTAL, SPECIAL, INDIRECT, OR EXEMPLARY DAMAGES ARISING OUT OF THIS AGREEMENT, EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND UNDER ANY CAUSE OF ACTION, INCLUDING NEGLIGENCE. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.

15.  Term and Termination.      --------------------

     (a) Term and Renewal Option. The initial term of this Agreement shall          ----------------------- commence on the Effective Date and end on the fifth anniversary of the Effective Date. MBE shall have the right to elect by written notice to the Company at any time between two (2) and six (6) months prior to the end of such initial term or any subsequent Renewal Period (as defined below), to notify the Company that MBE elects to seek to extend such term for additional two (2)-year periods (each a Renewal Period) In the event of such election, MBE and the Company shall have  -------------- a period of sixty (60) days in which to negotiate commercially reasonable Basic Fees, Bounty Fees and eBay Fees (and other applicable fees) (Fee Schedule)                                                               ------------ under which the Company would be willing to renew this Agreement for such Renewal Period. If the parties are unable to reach agreement during such sixty (60) day period, either party may request that the Fee Schedule be submitted to arbitration pursuant to Section 18(m)  [Arbitration]. If MBE notifies the Company of its intent to so renew prior to the end of such initial term or such Renewal Period, the term of this Agreement shall automatically be extended for the Renewal Period and, other than the Fee Schedule, all of the terms and conditions of this Agreement shall remain in full force and effect.

     (b) Termination.          -----------

         (i)   Either party may, at its option, terminate this Agreement upon notice to the other party if (A) the other party materially fails to comply with any of the material terms and conditions of this Agreement and (B) if such default has not been cured within thirty (30) days (forty five (45) days if required by the nature of the breach) after written notice to the other party or, if such breach is not curable within thirty (30) days (forty five (45) days if required by the nature of the breach), reasonable efforts and progress are not being made to cure such breach.

         (ii)  This Agreement shall terminate, without notice, (A) upon the institution by or against either party of insolvency, receivership or bankruptcy proceedings or any other proceedings for the settlement of such party's debts, (B) upon either party's making an assignment for the benefit of creditors, or (C) upon either party's dissolution or ceasing to do business.

                                      -17-

     (c) Termination Period.          ------------------

         (i)   If this Agreement is terminated or expires in accordance with this Section 15 (other than termination by the Company in the event of an uncured material breach by MBE), then MBE shall have a period of up to twenty-four (24) months from and after the date of such termination, to make arrangements with respect to the conversion of the Service to a non-Company manifest system (the Termination Period). The date when the Service shall have                       ------------------ been converted to a non-Company manifest system shall hereinafter be referred to as the Termination Completion Date and shall be the effective date of          -------------------------- termination of this Agreement, in such event. During the Termination Period each party will continue to perform its obligations hereunder, and MBE and MBE Centers will continue to pay any applicable fees and payments hereunder to the Company. MBE shall keep the Company informed as reasonably necessary with respect to such conversion. MBE also shall give the Company written notice of the estimated Termination Completion Date promptly after a reasonably definitive projected Termination Completion Date is known by MBE, and shall give written notice to the Company promptly after any change in such estimated Termination Completion Date.

         (ii)  During the Termination Period, the Company will give reasonable cooperation and support to MBE to assure an orderly and efficient transition and, without limiting the generality of the foregoing, at MBE's expense, the Company shall be obligated to provide MBE with data reasonably necessary for MBE to convert or implement the non-Company systems, procedures and practices.

     (d) Effect of Termination.          ----------------------

         (i)   Sections 1, 7, 10, 13, 14, 15, 16 and 18, as well as any payments accrued prior to termination of this Agreement, shall survive any termination or expiration of this Agreement.

         (ii)  Within thirty (30) days after the Termination Completion Date,

Source: STAMPS.COM INC, 10-Q, 11/14/2000





each party shall, at its own expense, destroy or return to the Company and make no further use of, any property, materials or other items of the other party and shall certify, in writing that it has done so

         (iii) Nothing contained herein shall limit any other remedies that either party may have for the default of the other party under this Agreement nor relieve either party of any of their obligations incurred prior to termination of this Agreement.

         (iv)  During the Termination Period and thereafter, and notwithstanding any other provision of this Agreement, MBE will be free to use its own personnel, and/or engage or contract with any third party to use the Specifications to design, develop and market an Internet-based manifest system similar to the Manifest (including products that contain functionality similar to the Service and which have a look and feel similar or identical to the Manifest), in each case solely for the benefit of MBE and the MBE Centers and international franchisees or licensees of MBE. MBE shall not use the object code or source code of the Manifest in the course of such development. Subject to MBE's compliance with the provisions of this subsection (iv), the Company shall not

                                      -18-

assert any claim against MBE under the Company's Intellectual Property Rights in the Specifications or the Manifest in connection with such development, other than for use of the Company's trademarks, trade names, service marks and service names. Neither party shall have the right to retain or use the specific software implementation of the Manifest developed by the parties hereunder; provided, however, that the Company may retain one (1) copy of the software implementation of the Manifest solely for archival and evidentiary purposes.

16.  Publicity. Upon execution of this Agreement, the parties will jointly      --------- prepare a mutually acceptable description of their business relationship as contemplated by this Agreement which may be used by either party in press releases and other marketing materials from time to time during the term of this Agreement. Additional press releases or publicity materials shall be approved by each party in writing prior to release.

17.  Warrant. On the Effective Date, the Company shall issue the Warrant to      ------- MBE, upon the terms and subject to the conditions set forth therein.

18.  Miscellaneous.      -------------

     (a) Amendments and Waivers. Any term of this Agreement may be amended or          ---------------------- waived only with the written consent of the parties or their respective successors and assigns. Any amendment or waiver effected in accordance with this Section 18(a)  [Amendments and Waivers] shall be binding upon the parties and their respective successors and assigns.

     (b) Assignment. Each party shall have the right to assign its rights,          ---------- obligations and privileges hereunder to an assignee in connection with any merger, acquisition or sale of all or substantially all of the business to which this Agreement relates. Each MBE Center shall have the right to assign its rights and obligations and privileges under a Subscription Agreement in connection with any merger, acquisition or sale of all or substantially all of such MBE Center's assets. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

     (c) Entire Agreement. This Agreement is the product of both of the parties          ---------------- hereto, and constitutes the entire agreement between such parties pertaining to the subject matter hereof, and merges all prior negotiations and drafts of the parties with regard to the transactions contemplated herein. Any and all other written or oral agreements existing between the parties hereto regarding such transactions are expressly canceled.

     (d) Independent Contractor. Neither party shall, for any purpose, be deemed          ---------------------- to be an agent of the other party and the relationship between the parties shall only be that of independent contractors. Neither party shall have any right or authority to assume or create any obligations or to make any representations or warranties on behalf of any other party, whether express or implied, or to bind the other party in any respect whatsoever.

                                      -19-

Source: STAMPS.COM INC, 10-Q, 11/14/2000





     (e) Force Majeure. In the event that either party is prevented from          ------------- performing or is unable to perform any of its obligations under this Agreement (other than a payment obligation) due to any Act of God, fire, casualty, flood, earthquake, war, strike, lockout, epidemic, destruction of production facilities, riot, insurrection, material unavailability, or any other cause beyond the reasonable control of the party invoking this section, and if such party shall have used its best efforts to mitigate its effects, such party shall give prompt written notice to the other party, its performance shall be excused, and the time for the performance shall be extended for the period of delay or inability to perform due to such occurrences. If a force majeure event causes the Company to allocate limited resources among all of its customers, [***]*.                                                                        --- The Company shall resume operation of the Service as soon as reasonably practicable upon conclusion of any force majeure event. Notwithstanding the foregoing, if such party is not able to perform within sixty (60) days after the event giving rise to the excuse of force majeure, the other party may terminate the Agreement.

     (f) Governing Law. This Agreement and all acts and transactions pursuant          ------------- hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law.

     (g) Severability. If one or more provisions of this Agreement are held to          ------------ be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith, in order to maintain the economic position enjoyed by each party as close as possible to that under the provision rendered unenforceable. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

     (h) Waiver. The waiver of any particular breach or default or any delay in          ------ exercising any rights shall not constitute a waiver of any subsequent breach or default.

     (i) Notices. Any notice required or permitted by this Agreement shall be in          ------- writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, or forty-eight (48) hours after being deposited in the regular mail as certified or registered mail (airmail if sent internationally) with postage prepaid, if such notice is addressed to the party to be notified at such party's address or facsimile number as set forth below, or as subsequently modified by written notice.

----------      *  Confidential treatment has been requested for the bracketed portion. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission.

                                      -20-

     If to the Company:                       iShip.com, Inc.                                               2515 - 140th Ave. NE                                               Suite E-110                                               Attn: President                                               Bellevue, WA 98005                                               Facsimile Number: 425/602-5025

     With a Copy To:                          Craig E. Sherman                                               Venture Law Group                                               4750 Carillon Point                                               Kirkland, WA 98033                                               Facsimile Number: 425/739-8750

     If to MBE:                               Mail Boxes Etc. USA, Inc.                                               6060 Cornerstone Court West                                               San Diego, CA 92121                                               Attn: Thomas K. Herskowitz                                               Facsimile Number: 619/546-7499

     (j) Headings. The headings of the several sections of this Agreement are          -------- intended for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

     (k) Counterparts. This Agreement may be executed in counterparts, each of          ------------ which shall be deemed an original and all of which together shall constitute one instrument.

     (l) Advice of Legal Counsel. Each party acknowledges and represents that,

Source: STAMPS.COM INC, 10-Q, 11/14/2000





         ----------------------- in executing this Agreement, it has had the opportunity to seek advice as to its legal rights from legal counsel and that the person signing on its behalf has read and understood all of the terms and provisions of this Agreement. This Agreement shall not be construed against any party by reason of the drafting or preparation thereof.

     (m) Arbitration.          -----------

               (i)   Every claim or dispute arising out of or relating to the          negotiation, performance or non-performance of this Agreement shall be          determined by arbitration in accordance with the Commercial Arbitration          Rules of the American Arbitration Association (AAA), or as otherwise          agreed by the parties. The place of arbitration shall be San Diego,          California.

               (ii)  In the event of any such claim or dispute, the parties          shall first attempt to resolve the matter through good faith, informal          negotiations, including non-binding mediation. In the event that the          parties are unable to resolve the dispute, either party hereto may          demand arbitration by written notice to the other party and to the AAA          in San Diego. The parties shall mutually agree on one arbitrator. If          the parties cannot so agree, the single arbitrator shall be selected by          the AAA. The costs of arbitration are to be shared equally by the          parties. Each party shall be responsible for its own costs and          attorneys' fees.

                                      -21-

               (iii) The arbitrator shall not have any power to alter, modify          or change any of the terms of this Agreement or to grant any remedy          which is either inconsistent with or prohibited by the terms of this          Agreement, or not available in a court of law. The arbitrator shall not          have the authority to commit errors of law or errors of legal          reasoning. In addition, the arbitrator shall have no power or authority          to award punitive, consequential or incidental damages.

               (iv)  The arbitrator shall, within thirty (30) days after the          matter has finally been submitted to him or her, render a written          decision making specific findings of fact and setting forth the reasons          for the decision which shall be consistent with the terms of this          Agreement. The parties intend that this agreement to arbitrate be          valid, binding, enforceable, and irrevocable. The terms of this Section          shall survive the termination or expiration of this Agreement.          Judgement on any award of the arbitrator shall be binding and may be          entered in any court having jurisdiction thereof.

                            [Signature page follows]

                                      -22-

         The parties have executed this Agreement as of the date first set forth above.

                                               COMPANY:                                         LICENSEE:

ISHIP.COM, INC.                                  MAILBOXES ETC. USA, INC.

/s/ Stephen M. Teglovic                          /s/ Charles Lynn Lowder ---------------------------------------          ---------------------------------------- (Signature)                                      (Signature)

Stephen M. Teglovic                              Charles Lynn Lowder ---------------------------------------          ---------------------------------------- (Print Name)                                     (Print Name)

CEO/Pres                                         Executive Vice President/General Counsel ---------------------------------------          ---------------------------------------- (Title)                                          (Title)

                   SIGNATURE PAGE TO MANIFEST SYSTEM LICENSE                            AND CO-BRANDING AGREEMENT

                                    EXHIBIT A

                                 FORM OF WARRANT

                                    EXHIBIT B

Source: STAMPS.COM INC, 10-Q, 11/14/2000





AUTHORIZED EQUIPMENT: ---------------------

     A PC reasonably adequate to access and use the Service for manifesting and shipping packages, with the following minimum specifications:

     .    a reasonably adequate scale and a label printer      .    An internet/network connection of at least 256k bits/sec      .    Processor: P5-233      .    Ports: 2 Com ports, 1 Parallel port      .    RM: 64 Megs      .    HDD: 1.2 GB      .    Video. 4 MB      .    OS: Win 98/OSR2      .    Browser: IE 5 SP1

                                    EXHIBIT C                                POTENTIAL CUSTOMERS

=======================================================================================================================                             TYPE                             DEFINITION ----------------------------------------------------------------------------------------------------------------------                                                                                        I                               A customer  physically present in the retail store-front                                                              or  remote  off-site  locations  of  MBE  Centers  for a                      In-Center Customer                      transaction in  which they do not  utilize an LMS or                                                              MBEX (as such terms are defined below). ----------------------------------------------------------------------------------------------------------------------                                                              A  customer  utilizing  a  self-service  lobby  manifest                             II                               system  in  a  MBE  Center  (LMS)  or  a  self-service                                                                                            ---                Remote Self-Service Customer                  MBE-branded   remote  manifest  system  (MBEX)  for  a                                                                                                        ----                                                              transaction. ----------------------------------------------------------------------------------------------------------------------                                                              A  customer  shipping  a  PLD-compliant  and  ramp-ready                          III A                               package* through a MBE Center that is manifested                   MBE Internet Customer                      through the MBE Sites. ----------------------------------------------------------------------------------------------------------------------                                                              A  customer  shipping  a  PLD-compliant  and  ramp-ready                          III B                               package through a MBE Center, which package is               Company Internet Customer                      manifested through the Company site. ----------------------------------------------------------------------------------------------------------------------                                                              A  customer  shipping  a  PLD-compliant  and  ramp-ready                                                              package   through  a  MBE  Center,   which   package  is                          III C (1)                           manifested  through  the  Internet  web  site of a third                  Third Party/MBE Customer                    party that is con-branded or otherwise  affiliated  with                                                              MBE. ----------------------------------------------------------------------------------------------------------------------                                                              A  customer  shipping  a  PLD-compliant  and  ramp-ready                                                              package   through  a  MBE  Center,   which   package  is                          III C (2)                           manifested  through  the  Internet  web  site of a third                Third Party/Company Customer                  party that is  co-branded or otherwise  affiliated  with                                                              the Company or the Service. ----------------------------------------------------------------------------------------------------------------------                                                              A  customer  shipping  a  PLD-compliant  and  ramp-ready                                                              package   through  a  MBE  Center,   which   package  is                          III C (3)                           manifested  through an  Internet  web site  operated  by                        eBay Customer                         eBay  Incorporated  or in connection  with an auction or                                                              sale conducted on such web site. ----------------------------------------------------------------------------------------------------------------------                             IV                               A  customer  that   utilizes  the  Service   and/or  the                      Company Customer                        Company's   products   and   services   other   than  in                                                              connection with a MBE Center. ----------------------------------------------------------------------------------------------------------------------

---------- *  PLD-compliant and ramp-ready shall mean compliance with the electronic    data requirements of each carrier supported by the Service.

                                    EXHIBIT D

                              SYSTEM SPECIFICATIONS

     The Service will enable MBE and MBE Centers to process packages for domestic shipment, weigh these packages, and create shipping labels. The Service will export data to a given MBE Center's Point-of-Sale (POS) station, and will support ARS/BIN packages, consignee billing, freight insurance, MBE proprietary or designated transit declared value, and customer address book access. All carrier rating information will be maintained by the Company from its central database management system (DBMS). MBE Centers will be allowed to create or

Source: STAMPS.COM INC, 10-Q, 11/14/2000





modify their own mark-ups for shipping, and, at its expense, the Company will update and/or adjust its pricing information for each MBE Center for each carrier to reflect such modifications. This Exhibit D may be modified from time to time by mutual agreement of the parties.

     The maximum amount of information downloaded from the Company's server to the counter manifest station will be 15 kilobytes or less per package processed.

     The following carriers and services will be supported:

UPS ---

Domestic: --------          Ground          Three Day Select          Second Day Air          Second Day Air AM,          Next Day Air Saver          Next Day Air          Next Day Air Early AM

International: -------------          Canada Standard          Worldwide Expedited            (including Canada/Mexico as set forth in the Specifications)          Worldwide Express            (including Canada/Mexico as set forth in the Specifications)

FedEx -----

Domestic: --------          Express Saver          2 Day          Standard Overnight          Priority Overnight          First Overnight

International: -------------          International Economy          International Priority

USPS ----

Domestic: --------          Parcel Post          Priority Mail          Express Mail          First Class

International: -------------          Parcel Post Air          Parcel Post Surface          Small Parcel Air          Small Parcel Surface          Express Mail          Global Priority Mail

--------------------------------------------------------------------------------

     The Service will include the following features, the more detailed functionality of which will be agreed to from time to time by the parties as the Service is developed:

1.       Table of Contents 2.       Table of Illustrations 3.       Introduction 3.1.     Purpose 3.2.     Scope 3.3.     Introduction 4.       Implementation 4.1      Organization 4.1.1.   Opening the Counter Manifest System 4.1.2.   Main Screen Organization 4.1.3.   Menu Structure 4.2.     General Functionality 4.2.1.   Keyboard & Mouse Behavior 4.2.2.   Sortable List Boxes

Source: STAMPS.COM INC, 10-Q, 11/14/2000





4.2.3.   Find Package/Transaction Dialogs 4.2.4.   Find Manifest Dialogs 4.2.5.   Find Dialog Search Behavior 4.3.     Process Menu 4.3.1.   Process Package 4.3.2.   Find Package 4.3.3.   Find Customer 4.3.4.   Customer Address Dialog 4.3.5.   Recipient Address Dialog

4.3.6.   Address Book Dialog 4.3.7.   City/State/Postal Verification Dialog 4.3.8.   Region Locator Dialog 4.3.9.   Transaction Complete Dialog 4.3.10.  Point of Sale (POS) Export Records 4.3.11.  Enter ARS/BIN Package 4.3.12.  Process Consignee Billed 4.3.13.  Freight Insurance 4.3.14.  Reprint Last label 4.3.15.  Reprint label 4.3.16.  Edit Transaction 4.3.17.  Void Transaction 4.3.18.  Recall Voided Transaction 4.4.     Estimate 4.4.1.   Price a Package 4.4.2.   Create Estimate 4.4.3.   Edit Estimate 4.4.4.   Delete Estimate 4.5.     Manifest 4.5.1.   Perform End of Day 4.5.2.   Track a Package 4.5.3.   View Manifests 4.5.4.   View Transaction 4.5.5.   Reprint Manifest 4.6.     Reports 4.6.1.   Manifest Reports 4.6.2.   Rate Reports 4.6.3.   Management Reports 4.7.     Administration 4.7.1.   Preferences 4.7.2.   Center Information 4.7.3.   Taxable Items 4.7.4.   Scales and Printers 4.7.5.   Modify Rates Dialog 4.7.6.   Modify Rates for Zone Based Services 4.7.7.   Modify Rates for Weight Based/Single Zone Services 4.7.8.   Modify FedEx Service Option Rates Dialog 4.7.9.   Modify UPS Service Option Rates Dialog 4.7.10.  Modify USPS Service Option Rates Dialog 4.7.11.  Copy Rates 4.7.12.  Alternate Insurance Rates 4.8.     About 4.8.1.   Rate Effective Dates 4.8.2.   Version 5.       Services and Services Options 5.1.     Services

5.1.1.   UPS 5.1.2.   FedEx 5.1.3.   USPS 5.2      Service Options 5.2.1.   Declared Value 5.2.2.   Delivery Notification 5.2.3.   Proof of Delivery 5.2.4.   COD 5.2.5.   Call Tag 5.2.6.   Earliest Delivery Time 5.2.7.   Deliver Without Signature 5.2.8.   Certified Mail

Source: STAMPS.COM INC, 10-Q, 11/14/2000 
Question: Highlight the parts (if any) of this contract related to Cap On Liability that should be reviewed by a lawyer. Details: Does the contract include a cap on liability upon the breach of a party’s obligation? This includes time limitation for the counterparty to bring claims or maximum amount for recovery.
[EX A]: Notwithstanding anything to the contrary in      ----------------------- this Agreement, in no event shall either party's liability under any provision of this Agreement or otherwise arising out of or related to this Agreement (other than payments due or accrued under Section 8, exceed the amounts paid by MBE and the MBE Centers to the Company pursuant to this Agreement.

[EX Q]: Exhibit 10.24   ***Text Omitted and Filed Separately with the Securities and Exchange Commission. Confidential Treatment Requested Under 17 C.F.R. Sections 200.80(b)(4) and Rule 406 of the Securities Act of 1933, as amended.

   Collaboration Agreement, BII/ XENCOR



  Confidential

    COLLABORATION AGREEMENT   This Collaboration Agreement (Agreement) is made by and among     Xencor, Inc.  111 W. Lemon Ave. Monrovia, CA 91016 USA

(hereinafter called XENCOR),   and   Boehringer Ingelheim International GmbH   Binger Straße 173 55216 Ingelheim Germany   (hereinafter called BII)   (hereinafter BII an XENCOR each shall also be called Party and collectively Parties as the case may be).     EFFECTIVE DATE: February 10, 2012   1





  TABLE OF CONTENTS

                                                    1

  Definitions

  5

  1.1

  Acceptance Criteria   5

  1.2

  Affiliated Companies   5

  1.3

  Batch   5

  1.4

  BII Confidential Information and Know­How   5

  1.5

  BII Facility   6

  1.6

  BII Intellectual Property   6

  1.7

  BII Technology   6

  1.8

  Business Partner   6

  1.9

  Certificate of Analysis   6

  1.10

  Claim   6

  1.11

  CMO   6

  1.12

  Confidential Information­and Know­How   6

  1.13

  Confirmation of Compliance   6

  1.14

  Controlled Technology   6

  1.15

  cGMP   6

  1.16

  Deliverables   7

  1.17

  Due Date   7

  1.18

  Effective Date   7

  1.19

  FTE   7

  1.20

  Improvements   7

  1.21

  Knowledge   7

  1.22

  Latent Defects   7

  1.23

  Licensing Revenue   7

  1.24

  Losses   7

  1.25

  Major Territories   7

  1.26

  Material   7

  1.27

  MTA   7

  1.28

  Obvious Defects   8

  1.29

  Other Improvements   8

  1.30

  Principal Supplier   8

  1.31

  Process   8







    1.32

  Process Description   8

  1.33

  Product   8

  1.34

  Project   8

  1.35

  Project Fees   8

  1.36

  Project Manager   8

  1.37

  Project Plan   8

  1.38

  Project Team   8

  1.39

  QAA   9

  1.40

  Representatives   9

  1.41

  Service(s)   9

  1.42

  Specification(s)   9

  1.43

  Steering Committee   9

  1.44

  Technology   9

  1.45

  Technology Access Fee   9

  1.46

  Total Amount   9

  1.47

  XENCOR Confidential Information and Know­How   9

  1.48

  XENCOR Intellectual Property   9

  1.49

  XENCOR Technology   9

    2







                                                               2

  Cooperation between the Parties in the Course of a Project

  10

  2.1

  General

  10



 2.1.1   General

  10











 2.1.2   Priority

  10









  2.2

  Personnel

  10



 2.2.1   Designation of Project Manager

  10











 2.2.2   Project Team

  10











 2.2.3   Steering Committee

  11









  2.3

  Conduct of the Project and BII's Work and Tasks   11

  2.4

  Deliverables

  12

  2.5

  Nature of the Project

  12

  2.6

  Additional Work

  12

  2.7

  XENCOR Confidential Information and Know-How and Material

  12

  2.8

  Further Obligations of XENCOR

  13



 2.8.1   General

  13











 2.8.2   Obligations of XENCOR

  13











 2.8.3   Timelines and Information

  13









  3

  Payments

  14

  3.1

  Project Fee

  14



 3.1.1   Consideration for Services

  14











 3.1.2   Payment of the Project Fees

  14











 3.1.3   Invoicing

  15















     3.2

  Technology Access Fee

  15

  3.3

  VAT

  15







  4

  Delivery Terms of Product

  16

  4.1

  Delivery Terms

  16

  4.2

  Cancellation of Order

  17







  5

  Ownership and Use of Project Data

  17

  5.1

  Project Data

  17

  5.2

  Use of the Process; Right of Negotiation

  18



 5.2.1   Use of the Process outside this Agreement

  18











 5.2.2   Right of First Negotiation to Manufacture

  18











 5.2.3   Technology Access Fee and Technology Transfer

  20











 5.2.4   Payment Terms

  21











 5.2.5   License

  21









  5.3

  Acknowledgement

  21







  6

  Representations, Warranties and Indemnification

  22

  6.1

  Mutual Representations, Warranties and Covenants

  22

  6.2

  XENCOR Warranties

  22

  6.3

  BII Warranties

  22

  6.4

  Process for Defense of Infringement of Third Party Intellectual Property

  23

  6.5

  Disclaimer of Warranties

  24

    3







                                                       7

  Liability, Indemnification, Limitations and Insurance

  24

  7.1

  General

  24

  7.2

  Liability

  24

  7.3

  Indemnification

  25

  7.4

  Limitation of Liability and Indemnification Obligations

  25

  7.5

  Insurance

  26







  8

  Intellectual Property

  26

  8.1

  Existing Intellectual Property Rights

  26

  8.2

  New Intellectual Property, Project Results and Licenses

  26



 8.2.1   XENCOR

  26











 8.2.2   BII

  27











 8.2.3   Other Improvements

  27











 8.2.4   Licenses to Xencor

  27











 8.2.5   Licenses to BII

  27









  9

  Confidentiality

  28

  9.1

  General

  28

  9.2

  MTA Superseded

  30

  9.3

  Controlled Technology

  30







  10

  Term and Termination

  30

  10.1

  Term

  30

  10.2

  Termination of this Agreement

  30



 10.2.1



 30









 10.2.2



 30







  10.3

  Effects of Termination of this Agreement

  31









 10.3.2



 31









 10.3.3



 32







  10.4

  Surviving Provisions

  32







  11

  Miscellaneous

  32

  11.1

  Force Majeure

  32

  11.2

  Conflict with Improvements under the MTA

  33

  11.3

  Secrecy Agreement between the Parties

  33

  11.4

  Publicity

  33

  11.5

  Notices

  33

  11.6

  Applicable Law and Arbitration

  34

  11.7

  Entire Agreement

  34

  11.8

  Waiver; Amendment

  34

  11.9

  Severability

  35

  11.10

  Dispute Resolution

  35

  11.11

  Assignment

  35

  11.12

  Independent Contractors

  35

  11.13

  Counterparts

  35

    4

  Preamble   WHEREAS, XENCOR and an Affiliated Company (as defined below) of BII, the Boehringer Ingelheim Pharma GmbH & Co. KG, Birkendorfer Str. 65, 88397 Biberach, Germany (BI Pharma) entered into a Material Transfer and Initial Service Agreement dated as of June 28, 2011 relating to XENCOR's proprietary product, a monoclonal antibody directed against TNF­  known as Xtend­TNF or XmAb6755; and   WHEREAS, XENCOR is a company engaged in the design and development of biopharmaceutical drugs and is owner of a cell line expressing the Product (as defined below);   WHEREAS, BII has know-how and expertise to develop production processes for biopharmaceuticals towards commercial scale volumes and within international regulatory requirements;   WHEREAS, XENCOR and BII herewith agreed on a business collaboration for the mutual benefit of both Parties by having XENCOR providing the Material (as defined below) and the description of the Product and by having BII developing a fed­batch production process to have XENCOR's Product expressed from the Material in the quantity suitable for preclinical and completion of Phase 1 clinical testing; and   WHEREAS, as BII finances the Project in advance and receives a first right to negotiate to manufacture and payments at a later point in the future, XENCOR agrees, in order to make both Parties benefit from their collaboration, to use its commercially reasonable efforts to complete Phase 1 clinical testing of the Product and to find a business partner for the further development of the Product into a successful medicinal product;   NOW THEREFORE and in consideration of the mutual covenants set forth in this Agreement, BII and XENCOR hereby agree as follows:   1 Definitions   1.1 Acceptance Criteria





  shall mean either, (as the case may be) the following criteria with respect to a Batch of Product; (i) the preliminary specifications as agreed upon by the Parties with respect to the three (3) initial manufacturing runs as described in Section 2.5, or (ii) except as provided in clause (i), the Specifications accompanied by a Confirmation of Compliance and Certificate of Analysis.   1.2 Affiliated Companies   shall mean any company or business entity which controls, is controlled by, or is under common control with, either XENCOR or BII. For purposes of this definition, control shall mean the possession, directly or indirectly of the power to direct or cause the direction of the management and policies of an entity (other than a natural person), whether through the majority ownership of voting capital stock, by contract or otherwise.   1.3 Batch   shall mean Product from one fermentation run using the Process.   1.4 BII Confidential Information and Know­How   shall mean all existing or future technical or other information relating specifically to (a) the BII Facility, (b) the Process, (c) BII Intellectual Property, and/or (d) know-how for the development and manufacture of biopharmaceuticals generally, in each case (a)-(d) whether   5





  patented or not patented, including, without limitation, trade secrets, know-how, processes, concepts, experimental methods and results and business and scientific plans that are disclosed or supplied directly or indirectly to XENCOR or used in connection with the Project, but always excluding all confidential technical or other information of XENCOR specifically relating to XENCOR Technology.   1.5 BII Facility   shall mean the biotech buildings and all other buildings used by BII and/or its Affiliated Companies in performance of the Project in Fremont, CA, USA (it being understood that certain aspects of the Services may be performed in Germany, and, with respect thereto, such buildings in Germany used by BII and/or its Affiliated Companies in performance of the Project, shall also be deemed BII Facility).   1.6 BII Intellectual Property   shall have the meaning set forth in Section 8.2.2 hereof.   1.7 BII Technology   shall mean the Technology developed or obtained by or on behalf of BII or any of its Affiliated Companies without the use of the of XENCOR Confidential Information and Know-How or the Material, including without limitation, the Process.   1.8 Business Partner   shall have the meaning set forth in Section 2.8.2 hereof.   1.9 Certificate of Analysis   shall mean, with respect to a Batch, that complete and accurate document setting forth the conformance with the Specifications set forth in the QAA.   1.10 Claim   shall have the meaning set forth in section 6.4.(a)a) hereof.   1.11 CMO   shall mean Contract Manufacturing Organization.   1.12 Confidential Information­and Know­How   shall mean either or both Xencor Confidential Information and Know-How (as defined herein) or BII Confidential Information and Know- How (as defined herein), as applicable.   1.13 Confirmation of Compliance   shall mean BII's complete and accurate certificate, executed and delivered to XENCOR in connection with each Batch of Product, confirming that such Batch of Product was manufactured according to cGMP, the Process and applicable laws at the BI Facility, and setting forth any deviations therefrom and the results of final investigations performed by BII according to the QAA.   1.14 Controlled Technology   shall have the meaning specified in Section 9.3 hereof.   1.15 cGMP   shall mean current Good Manufacturing Practice regulations as codified in:   The Rules Governing Medicinal products supplied in the European Union: Volume 4 -Medicinal products supplied for Human and Veterinary Use: Good Manufacturing Practice, as amended from time to time; the United States Code of Federal Regulations, title 21, parts   6





  210, 211, 600 and 610, as amended from time to time; and the International Committee on Harmonisation and other comparable guidelines, directives or standards required by governmental authorities in the Major Territories or in any other country or countries agreed in writing by the Parties.   1.16 Deliverables   shall have the meaning specified in Section 2.4 hereof.   1.17 Due Date   shall have the meaning specified in Section 3.1.2 hereof.   1.18 Effective Date   shall mean the date of commencement of this Agreement as mentioned on the cover page above.   1.19 FTE   shall mean a fully allocated employee or consultant of BII and working on the Technology transfer with such time and effort to constitute the equivalent of one (1) employee on a full time basis consistent with normal business and scientific practice […***…].   1.20 Improvements   shall mean all discoveries and inventions, and all modifications, derivatives and improvements to Technology or new uses thereof (whether or not protectable under patent, trademark, copyright or similar laws) that are discovered, developed or reduced to practice by or on behalf of BII or any of its Affiliated Companies (alone or jointly with XENCOR) in the performance of this Agreement.   1.21 Knowledge   shall mean that which a Party knows or should have known following that inquiry a reasonable person would have made in light of the facts and circumstances.   1.22 Latent Defects   shall mean non-conformance of the Product with this Agreement other than Obvious Defects.   1.23 Licensing Revenue   shall have the meaning set forth in Section 3.1.2 hereof.   1.24 Losses   shall have the meaning set forth in Section 7.2.a hereof.   1.25 Major Territories   shall mean the United States, the European Union and/or Japan.   1.26 Material   shall mean the respective XENCOR proprietary cell line as laid down in detail in Appendix 1 and any know-how or data relating directly thereto and provided together with such cell line to BII by or on behalf of XENCOR (including any progeny or derivative thereof).   1.27 MTA   shall mean the Material Transfer and Initial Service Agreement entered into by XENCOR and BI Pharma on June 28, 2011 attached to this Agreement as Appendix 4.

***Confidential Treatment Requested   7





  1.28 Obvious Defects   shall mean any non-conformance of the Product with this Agreement, which is visible or easily detectable without any analysis in a laboratory, such as noticeable damages of the Product caused by the transport of Product.   1.29 Other Improvements   shall have the meaning set forth in Section 8.2.3 hereof.   1.30 Principal Supplier   shall mean the right to manufacture and supply commercial Product in the amount per annum of at least […***…] of the worldwide annual demand of commercial Product calculated based on XENCOR's reasonably forecasted request for commercial Product for the respective calendar year.   1.31 Process   shall mean all the respective steps involved in the process developed and performed by BII pursuant to this Agreement to produce the respective Product from the Material or having the Product expressed from the Material, including, without limitation, the manufacture, testing and packaging thereof.   1.32 Process Description   shall mean a controlled document, approved by authorized technical and quality representatives of both Parties, that documents the general outline of the respective Process. It includes all relevant Process parameters to be met and equipment and raw materials to be used.   1.33 Product   shall mean XENCOR's proprietary biopharmaceutical product, a monoclonal antibody directed against TNF­  known as Xtend­INF or XmAb6755, as further laid down in detail in Appendix 1, expressed from the Material disclosed by XENCOR to BII and formulated either as bulk drug substance or in final dosage form as drug product, as the context requires.   1.34 Project   shall mean the performance of the Services, including without limitation the Process development program for the Product.   1.35 Project Fees   shall have the meaning specified in Section 3.1 hereof.   1.36 Project Manager   shall have the meaning specified in Section 2.2.1 hereof.   1.37 Project Plan   shall mean the plan describing the Services to be performed by BII under the Project, including the Project timeline and the Project Fees, attached to this Agreement as Appendix 2.   1.38 Project Team   shall have the meaning specified in Section 2.2.2 hereof and at the Effective Date shall consist of the persons listed in Appendix 3.   1.39 QAA

***Confidential Treatment Requested   8





  shall mean the Quality (Assurance) Agreement entered into between the Parties simultaneously with this Agreement and attached hereto as Appendix 5.   1.40 Representatives   shall have the meaning specified in Section 7.3 a hereof.   1.41 Service(s)   shall mean those certain services performed by BII under this Agreement.   1.42 Specification(s)   shall mean all the tests, analytical methods and/or limits, and the results thereof, as applicable, agreed by the Parties, within which the Product has to conform to be considered acceptable by XENCOR for clinical use set forth in Appendix 6. The Parties are in agreement, that in the first instance they will agree on preliminary specifications which shall then be fixed to final Specifications in accordance with Section 2.5.   1.43 Steering Committee   shall have the meaning specified in Section 2.2.3 hereof.   1.44 Technology   shall mean all cDNA, cell lines, cell banks, master cell banks, constructs, reagents, antibodies and/or other tangible materials, methods, techniques, processes, trade secrets, copyrights, know-how, data, documentation, regulatory submissions, specifications and other intellectual property of any kind (whether or not protectable under patent, trademark, copyright or similar laws).   1.45 Technology Access Fee   is defined in Section 5.2.3.   1.46 Total Amount   shall have the meaning specified in Section 3.1.2 hereof.   1.47 XENCOR Confidential Information and Know­How   shall mean all existing or future technical or other information relating specifically to (a) the Material, (b) the Product (and any modification, derivative or fragment thereof), and/or (c) the XENCOR Technology, in each case (a), (b) and (c) whether patented or not patented, and including, without limitation, all know-how, trade secrets, inventions, patent applications, processes, concepts, experimental methods and any other information concerning XENCOR's financial situation, business plans, and its research and product designs, that are disclosed or supplied to BII in connection with the Project, but always excluding BII Confidential Information and Know-How.   1.48 XENCOR Intellectual Property   shall have the meaning specified in Section 8.2.1 hereof.   1.49 XENCOR Technology   shall mean (i) the Material, (ii) the Product, and any modifications, derivatives, or fragments thereof, and (iii) the Technology of XENCOR developed or obtained by or on behalf of XENCOR independent of and without the use of technical or other information disclosed or supplied by BII or its Affiliated Companies to XENCOR relating specifically to the BII Facility, the Process, BII Intellectual Property and/or know-how for the development and manufacturer of biopharmaceuticals generally, and which was introduced by XENCOR to the Project.   9





  2 Cooperation between the Parties in the Course of a Project   2.1 General   2.1.1 General   This Agreement sets forth the terms and conditions under which BII and XENCOR will perform their tasks regarding the Project. BII shall (by itself or by its Affiliated Companies) perform for XENCOR the Services as specified in this Agreement and the Project Plan and BII and XENCOR shall adhere to their obligations under this Agreement and the Project Plan.   2.1.2 Priority   In the event of a conflict or ambiguity between any term of this Agreement and an Appendix, the terms of this Agreement shall prevail. In case the Parties mutually agree that a specific Section of this Agreement shall be modified by the terms of a Project Plan (and that such term of the Project Plan shall prevail) for a specific Service, they may only do so by explicit reference to the Section of this Agreement that shall be modified.   2.2 Personnel   2.2.1 Designation of Project Manager   Upon commencement of the Project, BII and XFNCOR will each appoint a Project Manager, who will coordinate and supervise the Project including communication of all instructions and information concerning the Project to the other Party. The Project Manager will serve as the primary contact person for the other Party. Each Project Manager will be available on an agreed basis for consultation at prearranged times during the course of the Project. The Project Managers shall be copied on all correspondence by other Project Team members and all correspondence between the Parties. In the absence of the Project Manager, a substitute shall be appointed. Additional modes or methods of communication and decision making may be implemented with the mutual written consent of each Party. Each Party will use reasonable efforts to provide the other Party with […***…] prior written notice of any change in such Party's Project Manager.   2.2.2 Project Team   The Parties shall establish a Project Team consisting of representatives of each Party from the necessary disciplines and their respective Project Managers to (a) ensure the progress of the Project, (b) coordinate the performance of the Project, and (c) facilitate communication among the Parties. Each Project Team member shall have knowledge and ongoing familiarity with the Project and will possess the authority to make decisions on matters likely to be raised in the Project Team. Each Party shall have the right to substitute its members of the Project Team as needed from time to time by giving written notice to the other Party due time in advance.   The Project Team shall meet in person or by means of a video conference or teleconference on a periodic basis (a) as agreed by the Project Managers within [...***...] after written request for such meeting by either Party, or (b) as specified in the Project Plan (Appendix 2, as amended from time to time), but in any event, unless otherwise agreed in writing by the Parties, the Project Team shall meet at least one (1) time per calendar quarter (by means of a video conference or teleconference or in person, provided, however, that at least two (2) of these meetings per calendar year are held in person on an alternating basis between XENCOR's facilities and BII's facilities in Fremont, CA, USA).   The Project Team shall oversee the Project. Prior to each meeting of the Project Team the Parties will distribute to each other written copies of all materials, data and information arising out of the conduct of their activities hereunder.

***Confidential Treatment Requested   10





  Each Party shall bear its own costs associated with such meetings and communications. It is the right of each Party to call for a Project Team meeting according to the covenants of this Section 2.2 upon written request at any time.   The Parties shall alternate responsibility for preparing minutes of the meeting which shall be circulated promptly following the meeting.   The initial members of the Project Team and the Project Managers are set forth in Appendix 3 attached hereto which may be updated from time to time to reflect changes in the Project Team and/or Project Managers as provided in this Section 2.2.   2.2.3 Steering Committee   The Parties shall form a Steering Committee, to which each Party will appoint three (3) executive employees, including the Project Managers, all of whom shall be familiar with the Project. The Steering Committee shall have general oversight and review of the activities of the Project Team and shall resolve any issues referred to the Steering Committee by the Project Team. Each Party shall have the right to substitute its members of the Steering Committee as needed from time to time by giving written notice to the other Party due time in advance.   The Steering Committee shall meet within [...***...] after receipt of a written request by one Party to the other Party. The request shall describe the matter in dispute and the solution which the requesting Party proposes to be decided. Each Party shall bear its own costs associated with meetings and communications of the Steering Committee.   The Steering Committee will take action by unanimous consent of the Parties, with the representatives of BII collectively having a single vote and the representatives of XENCOR collectively having a single vote, or by a written resolution signed by all of the representatives. If the Steering Committee is unable to reach unanimous consent on a particular matter, then the matter will be referred to the chief executive officers of the Parties, who will use good faith efforts to resolve such matter, and the decision reached by mutual agreement of the chief executive officers of the Parties shall be final and binding on the Parties. If, (i) after good faith efforts, the chief executive officers of the Parties are unable to resolve such matter by mutual agreement, and (ii) such matter concerns the Product or the Process, but does not concern the BI Facility or the management of manufacturing slots, then the chief executive officer of XENCOR shall make the final decision about how to resolve such dispute, after good faith consideration of BII's position, which decision shall be final and binding on the Parties; provided, however, that, in resolving such matter, XENCOR's chief executive officer shall not have any authority to require BII or its Affiliated Companies to incur additional expenses or obligations not contemplated by this Agreement. In no event will the Steering Committee, or the executive officers of the Parties in resolving any Steering Committee matter, have any authority to amend or modify this Agreement; any such amendment or modification of this Agreement must be in accordance with Section 11.8. For the avoidance of doubt, nothing in this Section shall prevent any Party from seeking arbitration proceedings pursuant to Section 11.6 hereof with regard to any matters other than matters resolved by mutual agreement of the chief executive officers in accordance with this Section 2.2.3.   The members of the Steering Committee are set forth in Appendix 3 attached hereto, which may be updated from time to time to reflect changes in the Steering Committee as provided in this Section 2.2.3.   2.3 Conduct of the Project and BII's Work and Tasks   The Parties shall engage in the Project upon the terms and conditions set forth in this Agreement. In the course of this Agreement the Parties shall perform the Project as laid down and detailed in the Project Plan.   Each Party shall fully and reasonably cooperate with the other Party to provide appropriate information and assistance to the other Party in connection with the Project, responding in a

***Confidential Treatment Requested   11





  reasonable and timely manner with respect to all reasonable requests for information and approval. Neither Party shall be liable for any delays in its performance of the Project to the extent caused solely by the other Party's failure to provide in a reasonably timely manner any information or approval reasonably requested by the other Party.   The Parties shall assign a sufficient number of professionally qualified personnel to perform the Project and shall perform its tasks under this Agreement according to the generally acceptable professional and then current industry standards and subject to terms and conditions as set forth herein, at all times in compliance in all material respects with all requirements of applicable laws and regulations. The Parties will use commercially reasonable efforts to achieve the estimated timelines as laid down in the Project Plan.   Changes to the Project Plan, if any, shall require the written consent of both Parties.   2.4 Deliverables   BII will deliver such deliverables expressly laid down in detail in the Project Plan, including but not limited to the Product (the Deliverables) within the timelines laid down in the Project Plan to XENCOR. Following the completion of the activities required under the Project, BII will provide to XENCOR then available Product (if any), Batch records and a summary containing manufacturing and analytical testing, including without limitation, the information and the results of the development phase according to the workscope as further described in the Project Plan.   2.5 Nature of the Project   As the Product has never been produced by BII or on behalf of BII by its Affiliated Companies at the BI Facility, XENCOR acknowledges that the Project is experimental in nature and that no favorable or useful results can be assured by BII. However, after […***…], the Parties shall in good faith agree on a revision (if necessary) to the preliminary specifications for the Product (that have been mutually agreed upon by the Parties) that shall then be the Specifications for subsequent runs in subsequent campaigns that shall form a basis for rejection or acceptance of the respective Product produced in any additional runs at such scale under the provisions of Section 4.1, and, provided that the Process has not been materially changed (i.e. a change that is subject to the Change Control procedures of the QAA), the Project shall no longer be considered experimental in nature and the obligation to meet the respective Specification shall apply to all future runs at such scale.   2.6 Additional Work   In case the Parties mutually agree on additional work for the benefit of the Project by changing the Project Plan by written agreement of the Parties, BII shall perform such additional work to sustain the progress of the Project on conditions in terms of money, time and scope to be subject to agreement of the Parties hereto as set forth in the then amended Project plan.   2.7 XENCOR Confidential Information and Know-How and Material   To the extent not already transferred by XENCOR, XENCOR shall transfer the Material for the Project to BII to the BII Facility subject to the terms of this Section 2.7, and BII shall use or have used by its Affiliated Companies such Material solely to conduct the Project in accordance with the Project Plan, this Agreement, or as otherwise may be agreed to by the Parties in writing. The Material will not be used in connection with any animal studies or diagnosis, treatment or any activity in humans or for any use not directly related to the Project. BII's use of the Material will be in compliance with all applicable laws in the state or country where the Services are performed. BII accepts the Material with the knowledge that it is experimental. The Material may not be transferred or otherwise made available, in whole or in part, by BII to any other individual, entity or institution other than any Affiliated Companies

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  of BII without the prior written consent of XENCOR, which may be withheld by XENCOR for any reason. Such consent is hereby given for BII or its Affiliated Companies to transfer the Material for quality control testing performed by a third party on a blinded basis. For the avoidance of doubt, in the event of a transfer of Material to an Affiliated Company of BII or to any third party with the consent of XENCOR, BII shall ensure that the respective Affiliated Company or third party shall use such Material solely to conduct the Project in accordance with the Project Plan, this Agreement, or as otherwise may be agreed to by the Parties in writing and shall not transfer or otherwise make available, in whole or in part, the Material to any other individual, entity or institution.   The Material is the property of XENCOR. It is agreed that the transfer of the Material hereunder shall not constitute a sale of Material or a grant, option or license of any patent or other rights except to allow BII to perform the Project. XENCOR shall retain and have all right, title and interest in and to the Material.   XENCOR will inform BII in a timely manner about any safety issues of which XENCOR becomes aware relating to the handling of the Material and the Product after the date of the execution of this Agreement.   BII shall at all times take reasonable measures to protect the Material from loss or damage and in no event measures less than employed by BII in the protection of its own proprietary materials, and shall promptly notify XENCOR, if at any time it believes the Material has been damaged, lost or stolen.   XENCOR and BII hereby acknowledge and agree that XENCOR is providing XENCOR Confidential Information and Know-How to BII for its use by BII for the purposes of this Agreement, and BII will make use thereof solely for such purposes and XENCOR hereby consents to such use.   2.8 Further Obligations of XENCOR   2.8.1 General   The Parties acknowledge and agree, that. subject to the terms and conditions of this Agreement, BII substantially finances the Project at the costs and fees outlined in Appendix 2 in advance and receives payments at a later point in the future. Accordingly, XENCOR agrees, in order to make both Parties benefit from their collaboration, that the success of the collaboration between the Parties depends strongly on the fact whether or not XENCOR is able to find a suitable business partner for the further development of the Product into a successful medicinal product with one or more marketing authorisations worldwide.   2.8.2 Obligations of XENCOR   Therefore, XENCOR shall use commercially reasonable efforts to conduct and complete at its own cost and risk a Phase 1 clinical trial with the Product as described in Section 2.8.3 within the timelines set forth herein (subject to Section 2.8.3); and find one or more suitable third party/parties as business partner(s) for the further development of the Product into a medicinal product (Business Partner).   For the avoidance of doubt, XENCOR bears the sole responsibility for the conduct and completion of the clinical trials of the Product and the search for the Business Partner and shall bear all costs and expenses in connection therewith. In no event will it be a breach of this Agreement by XENCOR if the Phase 1 clinical trial or other clinical trials of the Product are not completed or an agreement is not entered into with a Business Partner so long as XENCOR uses commercially reasonable efforts to do so.   2.8.3 Timelines and Information   XENCOR shall use commercially reasonable efforts to conduct and complete a Phase 1 clinical trial of the Product in a timely fashion and to search for the Business Partner. A summary of the preliminary plan for the Phase 1 clinical trial of the Product to be conducted by XENCOR is attached as Appendix 7, it being understood that timing of such clinical trial   13





  may be delayed to the extent (i) caused primarily by BII's failure to provide Product conforming to the Specifications; or (ii) by safety issues relating to the Product; or (iii) by regulatory delays; or (iv) other causes outside the control of XENCOR.   XENCOR shall promptly provide BII notice of the completion and a summary overview of the outcome/observations of the Phase 1 clinical trial regarding the Product and a summary overview of any negotiations with a possible Business Partner regarding the further development of the Product. Moreover, XENCOR shall inform BII on an annual basis or, if there is good cause, upon request of BII (whichever is the case) about the actual status of such Phase 1 clinical trial or such negotiations, such request not to be more often than twice per year.   3 Payments   3.1 Project Fee   3.1.1 Consideration for Services   As consideration for the performance of BII's Services, XENCOR shall pay BII all fees to be paid to BII as set forth in the Project Plan (the Project Fees) according to the terms and conditions set forth in the following subsections of this Section 3.1.   The Project Fees as set forth in the Project Plan include BII's internal and out­of­pocket cost and expenses for its performance of the Project, including without limitation, ordinary and standard raw materials, components and consumables, and XENCOR shall not be obligated to make any payments with respect to any Services except the Project Fees or payments for additional work agreed upon according to Section 2.6 (which shall then be considered Project Fees).   3.1.2 Payment of the Project Fees   The Project Fees referred to in Section 3.1.1 above, together with interest at a […***…] percent ([...***...]%) annual interest rate on any unpaid Project Fees accruing from the earlier of (i) the date of completion of the clinical summary report for the Phase 1 clinical trials of the Product as planned according to Appendix 7 unless delayed as described in Section 2.8.3 or (ii) the date that is five (5) calendar years after the Effective Date (each of the alternatives above, the Due Date) until paid in full (the Project Fees together with any such interest, referred to as the Total Amount), shall become duly payable in accordance with the following schedule:   a. In case XENCOR has entered into an agreement with at least one Business Partner, then, beginning from the later of (i) the effective date of such agreement or (ii) the Due Date, XENCOR will pay BII the Total Amount in [...***...] installments of [...***...] of the [...***...] (defined below) that [...***...]; provided, however, that in no event will [...***...] of the annual Licensing Revenue [...***...]; provided that, for the avoidance of doubt, [...***...] shall be excluded from [...***...].

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  b. In case XENCOR decides to proceed with the further development of the Product without a Business Partner, XENCOR will pay BII the Total Amount in one or more lump sum payments within five (5) calendar years from the Due Date.   c. As long as XENCOR, notwithstanding its commercially reasonable efforts after the completion of the Phase 1 clinical trial either (i) is not able to further develop the Product for technical and/or scientific reasons or (ii) does not decide to proceed with the further development of the Product without a Business Partner and does not enter into an agreement with a Business Partner within two (2) calendar years from the Due Date, then XENCOR shall have no obligation to pay BII any or all of the Total Amount. For the avoidance of doubt, such obligations will become due as described in this Section 3.1.2, at any time XENCOR enters into an agreement with at least one Business Partner or further develops the Product within ten (10) calendar years following the Effective Date, as provided in Section 10.3.   3.1.3 Invoicing   XENCOR shall notify BII in writing of any of the circumstances listed in Section 3.1.2.a to 3.1.2.c. BII shall issue an invoice for the payments of the Total Amount agreed upon with XENCOR according to the payment schedule in Section 3.1.2 and payment of the Technology Access Fee, as applicable. The amount of the Project Fees and the interest (if any) will be shown separately in the invoice.   XENCOR shall make payments of all invoiced amounts for the payments of the Total Amount and of the Technology Access Fee due and payable in accordance with Section 5.2.3 and 5.2.4, as applicable [...***...] from the date of receipt of BII's invoice. If XENCOR fails to make timely payment of the invoiced amount, interest shall accrue on the amount of the Project Fees shown in the invoice at a fixed annual rate equal to the highest rate of interest quoted as the prime rate in The Wall Street Journal on the day that payment was due. All payments due under this Agreement shall be paid in US dollars by wire transfer or by such other means agreed to in writing by the Parties. XENCOR will provide at least twenty-four (24) hours advance notice to BII of each wire transfer to the bank account identified below or such other bank accounts as BII shall designate in writing.

       Account Name:

  [...***...]

  Account Number:

  [...***...]







Bank:

  [...***...]

  BIC (SWIFT-CODE):

  [...***...]

  IBAN:

  [...***...]

    3.2 Technology Access Fee   The Technology Access Fee (if any) is due according to Section 5.2.3 and 5.2.4 below. Section 3.1.3 shall apply accordingly.   3.3 VAT   All payments under this Agreement (including the Technology Access Fee) shall be understood as net payments without value added tax (VAT). VAT, if applicable, shall be added to the respective payment. The Parties will reasonably cooperate in completing and filing documents required under applicable law in connection with any refund of or credit for any such payment of VAT.

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  4 Delivery Terms of Product   4.1 Delivery Terms   BII shall (a) deliver to XENCOR or, (b) at the request of XENCOR, store, the agreed amounts of the Product produced according to the Project Plan in accordance with agreed upon schedule, at the price set forth in the Project Plan. Delivery of Product by BII shall be made [...***...] BII Facility (Incoterms 2010).   BII shall package and arrange for shipment of Product to the delivery address specified by XENCOR, all in accordance with the instructions of XENCOR provided that BII shall not be responsible for any damages with respect to Product or third party claims arising out of such arrangements for shipment of Product after delivery of such Product to the shipper in accordance with such instructions in accordance with XENCOR's instructions. Each shipment of cGMP Product will include a Certificate of Analysis, a Confirmation of Compliance and such other documentation as reasonably required to meet all applicable statutory and regulatory requirements. Delivery of the Product shall be subject to quality and other provisions set forth in the QAA. The Parties shall cooperate reasonably to obtain all customs licenses or permits necessary to ship the Product (the evaluation of which customs licenses or permits required shall be performed by XENCOR), and no shipment shall be made until such licenses or permits, if any, have been obtained.   XENCOR shall diligently examine all Product delivered under this Agreement as soon as practicable after receipt. Notice of all claims arising out of or relating to Obvious Defects shall be given in writing to BII within [...***...] after the date of XENCOR's receipt of Product, otherwise, such Product shall be considered free of any Obvious Defects as between BII and XENCOR. XENCOR shall make a damaged Product available for inspection and shall comply with the requirements of any insurance policy covering the Product, and BII shall offer XENCOR all reasonable assistance, at the cost and expense of XENCOR, in pursuing any claims arising out of the transportation of the Product.   Except as otherwise provided herein and as set forth in Section 2.5, XENCOR shall have [...***...] after the date of XENCOR's receipt of Product, for all claims arising out of or relating to any Latent Defects and to reject such delivered Product for Latent Defects; provided, however that XENCOR shall only be permitted to reject the Product if the Acceptance Criteria are not met.   If XENCOR determines after reviewing the relevant documentation and performing reasonable testing that any Batch does not meet the Acceptance Criteria, or if Product is determined by BII to be unsuitable for release, then the Parties will mutually agree, as promptly as reasonably possible, whether (a) to produce a new Batch at BII's cost and expense, including the costs of materials used in the manufacture of such Batch, or (b) to rework or reprocess the Batch, at BII's cost and expense, so that the Batch can be deemed to have been manufactured in compliance with cGMP and the agreed Process Description, and to conform to the Acceptance Criteria (provided that the Parties have mutually agreed in writing on any procedures for reworking or reprocessing a Batch). If the remedy set forth in either (a) or (b) is agreed to be performed by BII, then BII shall start the applicable work as soon as reasonably practicable, such that the next reasonably available (taking into consideration BII's entire contract manufacturing business) manufacturing slot shall be used by BII to produce Product, and BII will use commercially reasonable efforts to resupply within [...***...] but in any event no later than [...***...] from time of rejection by XENCOR. For the avoidance of doubt, if Product is not accepted by XENCOR as provided above, then BII's obligations set forth above shall apply both to the drug product and the bulk drug substance contained therein.   In the event XENCOR rejects the Product for Obvious Defects or Latent Defects as provided above, BII shall have the right to sample and retest the Product, which shall be done as soon as

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  practicable, provided that, if BII does not notify XENCOR in writing of its election to retest the Product within [...***...] after notice of rejection from XENCOR, BII shall be deemed to agree with XENCOR's rejection of the Product. In the event of a discrepancy between XENCOR's and BII' s test results such that one Party's results fall within the Acceptance Criteria and the other Party's test results fall outside the Acceptance Criteria, or there exists a dispute over whether such failure is due (in whole or in part) to acts or omissions of XENCOR or any third party after delivery, the Parties shall cause a testing laboratory agreeable to both Parties to perform comparative tests and/or analyses on samples of the alleged defective Product. The testing laboratory's results shall be in writing and shall be final and binding save for manifest error on the face of its report. Unless otherwise agreed to by the Parties in writing, the costs associated with such testing and review shall be borne by the Party against whom the testing laboratory result finally rules. The testing laboratory shall be required to enter into written undertakings of confidentiality no less burdensome than set forth or referred to by this Agreement.   4.2 Cancellation of Order   If XENCOR at any time cancels or postpones any campaign set forth in the Project Plan for the manufacture of Product for non-technical reasons later than [...***...] prior to the date on which inoculation of the respective production fermenter is to take place, XENCOR shall nevertheless be obliged to pay [...***...] percent ([...***...]%) of the Project Fees for such campaign to the extent that BII is not able to adequately use the respective capacity for such campaign alternatively (e.g. for production of any other material for any third party or itself) provided always that BII shall use its commercially reasonable efforts to use such capacity and mitigate any losses that may incur arising from such cancellation or postponement, including, for the avoidance of doubt, the reapplication of raw materials, if possible.   5 Ownership and Use of Project Data   5.1 Project Data   In consideration of the Project Fees:   a. BII shall carry out the Project by itself or by its Affiliated Companies) and provide XENCOR with a summary of the results from the Project, including manufacturing and analytical release and also shall provide XENCOR with a summary report about the results on the various stages of Process development;   b. BII shall supply XENCOR with data, results and information required to comply with any mandatory request of any applicable regulatory body in the Major Territories to comply with such regulatory body's requirements. BII shall provide complete Batch records for all cGMP runs and will provide to XENCOR all data reasonably necessary from all process development and manufacturing activities to enable XENCOR's preparation of any regulatory filings; and shall not unreasonably reject supplying data results and information required to comply with any requirement of any applicable regulatory body outside the Major Territories or cooperating with XENCOR's preparation of the chemistry, manufacturing and controls section of any regulatory filing supporting the clinical development of the Product in and outside the Major Territories.   BII shall bear the cost of such supply and cooperation by BII, provided that, if there are specific requirements of a given country that are significant and in addition to requirements of the Major Territories, the Parties will enter into good faith discussions whether additional resources and costs are required, with the intent of minimizing any additional cost to XENCOR.

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  c. Certain trade secret information may be provided by BII via DMF or similar filing (e.g. to a notified body) directly to the respective authorities.   d. For the avoidance of doubt, all summaries and/or reports generated as a result of the BII's performance under this Agreement and delivered to XENCOR by BII will be part of the Process and the sole and exclusive property of BII. Subject to XENCOR's confidentiality and non-use obligations hereunder and without affecting the ownership of Improvements as set forth in Section 8, BII hereby grants to XENCOR a non-exclusive, worldwide license to use and reproduce all such summaries and/or reports for all uses in connection with development activities relating to Product that do not involve manufacturing of Product (e.g., formulation work, toxicology studies or the development of a manufacturing process), regulatory activities relating to the Product and, to the extent necessary, any commercial activities relating to the Product, which XENCOR may sublicense in connection with any license of rights to the Product.   5.2 Use of the Process; Right of Negotiation   5.2.1 Use of the Process outside this Agreement   Except as set forth in this Agreement, the Process shall not be used by XENCOR or any third party outside the scope of this Agreement without the prior written consent of BII.   5.2.2 Right of First Negotiation to Manufacture   a. XENCOR hereby grants and will make an eventual Business Partner do so, BII a first right to negotiate to manufacture and supply Product for use in Phase 2 and 3 clinical trials. XENCOR shall provide BII written notice (i) of the completion of the Phase 1 clinical trials of the Product, which notice shall include reasonable documentation of the results of such Phase 1 clinical trials of the Product or (ii) that XENCOR has entered into an agreement with at least one Business Partner, whichever of (i) and (ii) occurs earlier. If BII provides XENCOR written notice of its exercise of the first right to negotiate within [...***...] after receipt of such written notice from XENCOR, then for a period of [...***...] following such written notice from BII or such longer period as agreed in writing by BII and XENCOR (or its Business Partner) (the Clinical Negotiation Period), XENCOR (or its Business Partner) and BII will negotiate in good faith an agreement for the manufacture and supply of Product for use in Phase 2 and 3 clinical trials, at market rate terms and conditions common for the contract manufacture of monoclonal antibodies within the contract manufacturing industry, to be mutually agreed in writing by the Parties. If BII does not provide written notice of its exercise of the first right to negotiate within such [...***...] period, XENCOR and any Business Partner shall be free to enter into one or more agreements with third parties for the manufacture and supply of Product for use in Phase 2 and 3 clinical trials. If BII provides written notice of its exercise of the first right to negotiate within such [...***...] period but BII and XENCOR (or its Business Partner) do not enter into such a contract manufacturing agreement within the Clinical Negotiation Period, XENCOR and any Business Partner shall be free to enter into one or more agreements with third parties for the manufacture and supply of Product for use in Phase 2 and 3 clinical trials (which may include an agreement for any Business Partner or its affiliate to manufacture and supply Product for clinical trials), provided that the supply price for Product is no more than [...***...] percent ([...***...]%) of the clinical supply price of Product last proposed by BII during the negotiations between the Parties (or BII and the Business Partner). If the supply price for Product proposed by a third party (which may include a Business Partner or its affiliate) is more than [...***...] percent ([...***...]%) of the clinical supply price of Product last proposed by BII during the negotiations between the Parties (or BII and the Business Partner) , XENCOR (or its Business Partner) shall provide written notice to BII that XENCOR (and its Business Partner) will accept the clinical supply price last proposed by BII, and BII and XENCOR (or its Business Partner) will enter into a contract manufacturing agreement reflecting such clinical supply price; provided that, if BII does not agree to enter into such contract

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  manufacturing agreement within [...***...] after such written notice, XENCOR (or its Business Partner) shall be free to enter into an agreement with a third party (or an agreement for the Business Partner or its affiliate to manufacture and supply Product).   b. In addition, if BI has exercised its first right of negotiation in Section 5.2.2.a, XENCOR hereby grants and will make an eventual Business Partner do so, BII a first right to negotiate to manufacture and supply commercial Product as Principal Supplier for a period up to the [...***...], starting with the first commercial launch of the Product. XENCOR shall provide BII written notice (i) of the decision to have the Product manufactured at a commercial scale and to launch the Product commercially or (ii) that XENCOR has entered into an agreement with at least one Business Partner, whichever of (i) and (ii) occurs earlier. If BII provides XENCOR written notice of its exercise of the first right to negotiate within [...***...] after receipt of such written notice from XENCOR, then for a period of [...***...] following such written notice, or such longer period as agreed in writing by BII and XENCOR (or its Business Partner) (the Commercial Negotiation Period), XENCOR (or its Business Partner) and BII will negotiate in good faith an agreement for the manufacture and supply of commercial Product as Principal Supplier, at market rate terms and conditions common for the contract manufacture of monoclonal antibodies within the contract manufacturing industry to be mutually agreed in writing by the Parties. If BII does not provide written notice of its exercise of the first right to negotiate within such [...***...] period, XENCOR and any Business Partner shall be free to enter into one or more agreements with third parties for the manufacture and supply of commercial Product (which may include an agreement for any Business Partner or its affiliate to manufacture and supply commercial Product). If BII provides written notice of its exercise of the first right to negotiate within such [...***...] period but BII and XENCOR (or its Business Partner) do not enter into such a contract manufacturing agreement within the Commercial Negotiation Period, XENCOR and any Business Partner shall be free to enter into one or more agreements with third parties for the manufacture and supply, of commercial Product (which may include an agreement for any Business Partner or its affiliate to manufacture and supply commercial Product); provided that the supply price for Product is no more than [...***...] percent ([...***...]%) of the commercial supply price of Product last proposed by BII during the negotiations between the Parties (or BII and the Business Partner). If the supply price for Product proposed by a third party (which may include a Business Partner or its affiliate) is more than [...***...] percent ([...***...]%) of the commercial supply price of Product last proposed by BII during the negotiations between the Parties (or BII and the Business Partner), XENCOR (or its Business Partner) shall provide written notice to BII that XENCOR (and its Business Partner) will accept the commercial supply price last proposed by BII, and BII and XENCOR (or its Business Partner) will enter into a contract manufacturing agreement reflecting such commercial supply price; provided that, if BII does not agree to enter into such contract manufacturing agreement within [...***...] after such written notice, XENCOR (or its Business Partner) shall be free to enter into an agreement with a third party (which may include an agreement for any Business Partner or its affiliate to manufacture and supply Product).   c. The right set forth in Section 5.2.2.b shall automatically terminate if BII does not exercise the first right of negotiation set forth in Section 5.2.2.a. The rights set forth in Section 5.2.2.a and b shall automatically terminate if BII does not produce a viable Process for manufacture of Product as evidenced by failure to produce cGMP Product within a timeframe reasonably and customary in the biopharmaceutical industry for companies of comparable size and the respective activities.   d. In both cases set forth above, in Section 5.2.2.a. and b., if BII exercises its first right of negotiation, BII and XENCOR (and/or its Business Partner, as applicable) will negotiate in good faith a respective contract manufacturing agreement based on the market rate

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  terms and conditions common for the contract manufacture of monoclonal antibodies within the contract manufacturing industry, it being understood that any such contract manufacturing agreement would provide for Technology transfer, payment of the Technology Access Fee (if applicable), and other terms set forth in Sections 5.2.3, 5.2.4 and 5.2.5 below.   e. Any use of the Process by XENCOR or any third party outside the terms and conditions set forth in such contract manufacturing agreement is always subject to the provisions set forth in Section 5.2.3 below.   f. In the event that BII elects not to exercise its first right of negotiation described in Section 5.2.2.a or 5.2.2.b, or, despite their commercially reasonably efforts and good faith negotiations the Parties (or BII and the Business Partner) are unable to agree upon a manufacturing agreement within the Clinical Negotiation Period or, Commercial Negotiation Period, as applicable; and/or XENCOR (and/or XENCOR's Business Partner) wishes to use the Process outside the terms and conditions set forth in a contract manufacturing agreement with BII, BII shall transfer the Process in accordance with Section 5.2.3 below.   g. All of BII's rights of negotiation set forth in this Secti6n 5.2.2 shall terminate upon payment of the Technology Access Fee by XENCOR.   5.2.3 Technology Access Fee and Technology Transfer   In the event that XENCOR wishes to use or have used (e.g. by a Business Partner) the Process outside this Agreement or the terms and conditions set forth in a contract manufacturing agreement with BII, except as provided below, XENCOR shall pay BII a technology access fee of three million five hundred thousand (3,500,000.00) US dollars (the Technology Access Fee).   In the event that XENCOR pays the Technology Access Fee set forth above, XENCOR shall have the right to use or have used (e.g. by a Business Partner) the Process worldwide for the manufacture of Product in accordance with the terms and conditions of this Agreement, without entering into a contract manufacturing agreement with BII.   Notwithstanding the foregoing, no Technology Access Fee shall be due or payable if BII does not produce a viable Process for manufacture of Product as evidenced by failure to produce cGMP Product within the timeframe agreed in the Project Plan or, if factors outside of the reasonable control of BII (such as e.g. a cell-line not suitable for production, delay in the growth of the cell line; shortage of raw materials and supplies, delay or non­performance of BII's suppliers, requests or orders of governments or regulatory authorities, etc.) require the timeframe in the Project Plan to be extended, the extended timeframe agreed upon in writing between BII and XENCOR that is reasonable and customary for paying customers in the biopharmaceutical industry for companies of comparable size and the respective activities. In addition, no Technology Access Fee shall be due or payable in connection with XENCOR's election to use or have used (e.g. by a Business Partner) the Process if (i) BII does not exercise its first right to negotiate under either Section 5.2.2.a or 5.2.2.b, (ii) BII exercises its first right to negotiate but demands a supply price for clinical/commercial supply of Product that exceeds the bid price for the clinical/ commercial supply of Product of a comparable quantity and quality by a third party biopharmaceutical CMO of comparable size and respective activities to BII and with registered headquarters in the Major Territories, or (iii) XENCOR (or its Business Partner) has entered into a contract manufacturing agreement with BII, but BII is not able to supply XENCOR and its Business Partners [...***...] of the Product required. For the avoidance of doubt, nothing in this Section 5.2.3 (ii) shall affect such contract manufacturing agreement or BII's position as Principal Supplier, but XENCOR may solely request the Technology Transfer pursuant to the following sentences of this Section without paying the Technology Access Fee in order to have manufactured the amount of Product missing to satisfy XENCOR's and its Business Partners' demand.

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  For the avoidance of doubt, the Technology Access Fee is only due one time, and if XENCOR pays the Technology Access Fee, except for the Project Fees, no additional amount will be payable for use or having used the Process worldwide.   The Technology Access Fee includes Technology transfer support of [...***...] FTEs of BII for a period of [...***...] for each of the [...***...] FTEs in a time frame of [...***...] beginning with XENCOR's written request to use or have used (e.g. by a Business Partner) the Process outside the terms and conditions set forth in a contract manufacturing agreement with BII. Further support of BII requested by XENCOR shall be reimbursed at an hourly rate of [...***...] US dollars. The Parties will agree upon the times when to render such Technology transfer support in good faith.   Promptly following XENCOR's election to use the Process, BII shall start to transfer the Process and all reasonably necessary related BII Confidential Information and Know-How) to XENCOR or such designee experienced in the biopharmaceutical production and shall use commercially reasonable efforts, taking into consideration BII's entire contract manufacturing business and other contract manufacturing contracts, to transfer the Process as quickly as possible (and in any event within [...***...] from receipt of XENCOR's written election notice). Both Parties agree and XENCOR will make its Business Partner agree that BII may, however, select the way how to render such support of any Technology transfer at its own discretion, in particular but not only any support of such Technology transfer to a company whose primary business is providing biopharmaceutical CMO services (including e.g. a Technology transfer outside the BI Facility), provided, however, that BII's exercise of such discretion is not unreasonable.   XENCOR and/or any third party may not use the Process outside the terms and conditions set forth in a contract manufacturing agreement with BII except as set forth in Section 5.2.2 and this Section 5.2.3 and provided that XENCOR or it Business Partner strictly adhere to the license conditions set forth in Sect ion 5.2.5 herein.   5.2.4 Payment Terms   The Technology Access Fee, as applicable, shall be paid to BII upon completion of the Technology transfer described in Section 5.2.3 and shall be payable in accordance with the provisions set forth under Sections 3.2 and 3.3 above. Parties agree that the Technology transfer shall be completed upon the transfer of Process and all reasonably necessary related BII Confidential Information and Know-How.   5.2.5 License   Subject to XENCOR's adherence to the obligations under this Agreement, BII hereby grants XENCOR a worldwide, irrevocable, exclusive, sublicensable and royalty free license to use the Process and all reasonably necessary related BII Confidential Information and Know- How, BII Technology and BII Intellectual Property for the sole purpose of making and having made the Product; provided that such license shall become effective only upon complete payment of the Technology Access Fee, as applicable.   5.3 Acknowledgement   The Parties acknowledge that nothing in this Agreement shall limit or restrict XENCOR, itself or with or through any third party, from developing and using any process (except for the Process) for the manufacture of any of its products, including the Product, provided that no BII Confidential Information and Know-How is used and XENCOR adheres to its confidentiality and non-use obligations hereunder and complies with the ownership of intellectual property and Improvements as set forth in Section 8 below.

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  6 Representations, Warranties and Indemnification   6.1 Mutual Representations, Warranties and Covenants   Each Party hereby represents, warrants and covenants to the other Party as follows as of the Effective Date:   a. it is a corporation duly organized and validly existing under the laws of the state or other jurisdiction of incorporation or formation; and   b. the execution, delivery and performance of this Agreement by such Party has been duly authorized by all requisite corporate action; and   c. it has full corporate authority to execute and deliver this Agreement and to perform its obligations hereunder, and the Agreement is binding upon it in accordance with it terms; and   d. it has the right, without restriction, to grant the licenses granted under this Agreement.   6.2 XENCOR Warranties   XENCOR hereby warrants that:   a. XENCOR has the right to provide the Material, the XENCOR Technology, the XENCOR Intellectual Property and all XENCOR Confidential. Information and Know-How under this Agreement and to the best of its Knowledge at the Effective Date that there are no third party rights that will limit or restrict use thereof by BII in accordance with this Agreement; and   b. to the best of its Knowledge at the Effective Date XENCOR is not aware of any special or unusual hazards involved in handling the Materials and/or Product of which it has failed to inform BII; and that it will inform BII immediately of any changes related thereto after the date of execution of this Agreement; and   c. at the Effective Date, no third party has asserted any claim or lawsuit against XENCOR claiming that use of the Material, XENCOR Technology, the XENCOR Intellectual Property and the XENCOR Confidential Information and Know-How infringes any intellectual property owned by a third party, and it will promptly notify BII in writing should it become aware of any claims by a third party asserting that use of such infringes any third part intellectual property rights owned by such third party.   d. it will use commercially reasonable efforts to conduct and complete a clinical trial phase 1 regarding the Product; and   e. it will use commercially reasonable efforts to find and enter into an agreement with a suitable Business Partner.   For avoidance of doubt, all XENCOR liability or indemnification obligations that might result from representations and the warranties under this Section 6 are always subject to the limitations set forth in Section 7.4 of this Agreement.   6.3 BII Warranties   BII hereby warrants that:   a. BI is entitled to use the BI Facility and BII Confidential Information and Know-How, for the purposes set forth in this Agreement; and   b. BII at the Effective Date, it is not aware of any special or unusual hazards that would arise as a result of its carrying out of the Projects as planned; and   c. at the Effective Date, it has not been debarred, nor is it subject to a pending debarment, and that it will not, to the best of its Knowledge, use in any capacity in connection with   22





  the Services under this Agreement any person, who has been debarred pursuant to section 306 of the FDCA, 21 U.S.C. § 335a, or who is the subject of a conviction described in such section. BII agrees to notify XENCOR in writing immediately if it has Knowledge that BII or any person who is performing Services is debarred or is the subject of a conviction described in section 306, or if any action, suit, claim, investigation, or proceeding is pending, or to BII's Knowledge, is threatened, relating to the debarment or conviction of BII or any person performing Services under this Agreement; and   d. to the best of its Knowledge at the Effective Date its performance under this Agreement including, but not limited to, the BII Technology and its use in the Process, by BII, XENCOR or a third party manufacturer of XENCOR does not infringe the intellectual property rights of any third party and it will promptly notify XENCOR in writing should it become aware of any claims asserting such infringement or of any third party intellectual property rights, that would be infringed by the BII Technology and its use in the Process. For the avoidance of doubt, the currently pending Cabilly dispute is excluded and will be addressed/ compensated by XENCOR once applicable: and   e. as of the Effective Date no third party has asserted any claim or lawsuit against BII claiming infringement of any intellectual property owned by a third party with relation to BII Technology and/or the Process, or any part or component thereof.   For avoidance of doubt, all BII liability or indemnification obligation that might result from representations and the warranties under this Section 6 are always subject to the limitations set forth in Section 7.4 of this Agreement.   6.4 Process for Defense of Infringement of Third Party Intellectual Property   Subject to each Party's indemnification obligations, in the event that there occurs a Claim (as defined below), the Parties shall follow the following procedures with respect to the defense of the Claim:   a. BII agrees that if a third party threatens or asserts any claim or files any lawsuit, claiming that BII Intellectual Property utilized under this Agreement and necessary for manufacture and production of the Product in accordance with this Agreement, including, without limitation, the BII Technology or the Process, or the use thereof, constitutes infringement of any intellectual property owned by a third party (each, a Claim), BII will promptly and timely inform XENCOR of such Claim, and BII shall have the first right to negotiate, litigate and/or settle any such Claim, and shall defend any such Claim unless it would not be commercially reasonable for BII to bear the reasonably anticipated losses, damages, costs and expenses arising from any settlement or judgment resulting from such Claim. For the avoidance of doubt, the term commercially reasonable, as used in this paragraph a. shall be determined (i) in the context of BII's entire business related to the intellectual property that is the subject to the Claim, where the Claim asserts infringement that impacts aspects of BII's business beyond the XENCOR relationship, and (ii) if the Claim asserts infringement that is limited only to activities performed for XENCOR, in the context of the entire relationship between XENCOR and BII.   b. BII will keep XENCOR reasonably informed about such negotiation or litigation at all times, including all material events related thereto, and in the event that the amounts paid or to be paid by BII in settlement of any such Claim or group of related or unrelated Claims appear reasonably likely to exceed, individually or in the aggregate, BII's indemnification obligations, or any contemplated settlement would place any obligations or restrictions upon XENCOR or the Product, then BII shall immediately inform XENCOR.   c. XENCOR shall not be responsible to pay for any costs of any settlement by BII of any Claim(s) (including, without limitation, any payments resulting of such settlement) that   23





  exceed BII's indemnification obligations or be bound by any obligations or restrictions agreed to by BII in any such settlement, in case such settlement is made without the prior written consent of XENCOR, which may be granted or withheld in its sole discretion.   d. In the case that BII decides not to negotiate, litigate or settle any Claim, XENCOR shall have the right to negotiate, litigate and settle any such Claim, and, provided that XENCOR decides to pursue such negotiation, litigation or settlement, BII will provide all commercially reasonable cooperation to XENCOR such that XENCOR may appropriately defend such Claims.   6.5 Disclaimer of Warranties   EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO ANY INTELLECTUAL PROPERTY, TECHNOLOGY, RIGHTS, RESULTS OF THE PROJECTS, MATERIAL, THE DELIVERABLES OR OTHER SUBJECT MATTER OF THIS AGREEMENT OR THAT THE PROJECTS WILL RESULT IN A COMMERCIALLY-VIABLE PROCESS, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABIIITY AND FITNESS FOR A PARTICULAR PURPOSE.   7 Liability, Indemnification, Limitations and Insurance   7.1 General   BII has no control over the manner in which XENCOR intends to use the results of the Project, the Product or the Deliverables, if any, obtained in the Project and in particular does not know or control how XENCOR intends to use such Product or results in clinical studies.   7.2 Liability   a. Of BII   Always subject Section 7.4, in consideration of the aspects set forth in Section 7.1, BII shall only be liable for any losses, damages, costs or expenses including, without limitation, reasonable attorneys' fees of any nature (Losses) incurred or suffered by XENCOR or its Affiliated Companies or any third party (including but not limited to Business Partners) to the extent such Losses are arising from either (i) BII's non­compliance with the warranties given under Sections 6.1 and 6.3 of this Agreement, or (ii) gross negligence or willful acts or omissions of BII or its Affiliated Companies in performing its obligations under this Agreement.   BII shall not be liable to XENCOR or be obligated to indemnify XENCOR or its Representatives under Section 7.3 for any Losses incurred or suffered by XENCOR, its Affiliated Companies or by any third party, arising out of any dispute or other claims or proceedings made by or brought against XENCOR and/or its Affiliated Companies with respect to XENCOR's use of any results of the Project, the Deliverables (including but not limited to the Product, if any), the Process, the BII Technology and/or the BII Confidential Information and Know-How, obtained (including but not limited to the use under a license that may be granted under this Agreement) under this Agreement including, without limitation, product liability claims, except to the extent such Losses are caused by the gross negligence or wilful acts or omissions of BII or its Affiliated Companies in performing its obligations under this Agreement, nor shall BII be responsible in any way for dealing with any such disputes, claims or proceedings.   24

  b. Of XENCOR   Always subject to Section 7.4, XENCOR shall be liable for any Losses incurred or suffered by BII, its Affiliated Companies or by any third party arising from either (i) XENCOR's non­compliance with the warranties given under Sections 6.1 and/or 6.2 of this Agreement, or (ii) BII's or XENCOR's use of XENCOR Confidential Information and Know­How, the Material, the XENCOR Intellectual Property and/or the XENCOR Technology in accordance with this Agreement, or (iii) XENCOR's use of the Deliverables (including but not limited to the Product, if any), or (iv) XENCOR' s use of the Process, the BII Technology, the BII Confidential Information and Know-How, and/or any other results of the Project or this Agreement, not in accordance with this Agreement.   XENCOR shall not be liable to BII or its Affiliated Companies or be ob1igated to indemnify BII or its Representatives under Section 7.3 for any Losses incurred or suffered by BII or its Affiliated Companies or any third party arising out of any dispute or other claims or proceedings made by or brought against BII or its Affiliated Companies with respect to BII's use of the BII Confidential Information and Know-How, the Material, the XENCOR Intellectual Property, and/or the XENCOR Technology or BII's use of the license granted to BII under Section 8.2.5.a outside the scope of this Agreement, in each case except to the extent such liability is caused by the gross negligence or wilful acts or omissions of XENCOR, or its Affiliated Companies in performing its obligations under this Agreement, nor shall XENCOR be responsible in any way for dealing with any such disputes, claims or proceedings.   7.3 Indemnification   a. BII's Indemnification Obligations   Always subject to Section 7.4, BII shall indemnify, defend and hold XENCOR, its Affiliated Companies and their respective officers, employees and agents (the Representatives) harmless from and against all Losses incurred by them as a result of third





party claims based on or resulting from (i) BII's non­compliance with the warranties given under Sections 6.1 and 6.3 of this Agreement, or (ii) any gross negligence or wilful acts or omissions of BII or any of its Affiliated Companies in performing its obligations under this Agreement.   b. XENCOR's Indemnification Obligations   Always subject to Section 7.4, XENCOR shall indemnify, defend and hold BII and its Representatives harmless from and against all Losses incurred by them as a result of third party claims based on or resulting from (i) BII's use of the XENCOR Confidential Information and Know-How, the Material, the XENCOR Intellectual Property and/or the XENCOR Technology in accordance with this Agreement; or (ii) XENCOR's non­compliance with the warranties given under Sections 6.1 and 6.2 of this Agreement, or (iii) XENCOR's use of the Deliverables (including but not limited to the Product, if any), or (iv) XENCOR' s use of the Process, the BII Technology, the BII Confidential Information and Know-How, and/or any other results of the Project or this Agreement, not in accordance with this Agreement.   7.4 Limitation of Liability and Indemnification Obligations   With the exception of wilful misconduct by a Party, and such cases where a limitation of liability and/or indemnification is not possible under applicable law, for which cases there shall be no limitation, any and all liability and/or indemnification obligations of each of BII and XENCOR under this Agreement shall be:   a. excluded for incidental, indirect, consequential, punitive or special damages (provided that the foregoing shall not exclude a Party's right to consequential or incidental   25





  damages for any negligent or intentional breach of confidentiality and non-use obligations under Section 9); and   b. each Party's aggregate liability and/or indemnification obligations towards the other Party under this Agreement shall not exceed an amount equal to the average annual aggregate amount paid or to be paid by XENCOR to BII hereunder; provided, however, that in the case of a Party's negligent or intentional breach of confidentiality and non­use obligations pursuant to Section 9, this limitation of liability shall be increased to twice the average annual aggregate amount paid or to be paid by XENCOR to BII hereunder;   provided however that the foregoing Subsections a. and b. of this Section 7.4 shall not limit XENCOR' s liability and indemnification obligation towards BII with respect to any third party claims according to clause (iii) and (iv) of Section 7.3 b. regarding any use of the Deliverables (in particular the Product) in humans and/or with respect to any third party claim that BII's use of the Material to manufacture the Product infringes any issued patent owed by such third party (excluding any such claim based specifically on use of the Process but not on the use of the Material).   7.5 Insurance   XENCOR and BII shall obtain and/or maintain during the term of this Agreement and for a period of [...***...] thereafter, liability insurance in amounts which are reasonable and customary in the biopharmaceutical industry for companies of comparable size and the respective activities (i.e. BII as CMO and XENCOR as sponsor/pharmaceutical company) at the respective place of business and such liability insurance shall insure against all mandatory liability, including liability for personal injury, physical injury and property damage. BII shall have the right to reasonably self insure.   8 Intellectual Property   8.1 Existing Intellectual Property Rights   BII hereby acknowledges that XENCOR is the owner of XENCOR Confidential Information and Know-How and the XENCOR Technology and BII shall acquire no rights, title or interest whatsoever in or to any of XENCOR Confidential Information and Know-How and/or XENCOR Technology, except as specifically provided for in this Agreement.   XENCOR hereby acknowledges that BII is the owner of BII Confidential Information and Know-How and the BII Technology and XENCOR shall acquire no rights, title or interest whatsoever in or to any of BII Confidential Information and Know-How and/or the BII Technology, except as specifically provided for in this Agreement.   8.2 New Intellectual Property, Project Results and Licenses   8.2.1 XENCOR   Improvements that (i) relate specifically to XENCOR Confidential Information and Know-How and/or the Product (or any modification, derivative or fragment thereof), and (ii) do not relate to BII Confidential Information and Know­How (collectively, XENCOR Intellectual Property), will be exclusively owned by XENCOR and XENCOR shall control patent prosecution and maintenance thereof. BII (on behalf of itself and its Affiliated Companies) agrees to assign and hereby assigns to XENCOR all right title and interest it may have in any XENCOR Intellectual Property. BII shall provide reasonable assistance to XENCOR for any action which may be necessary to assign or otherwise transfer any rights to XENCOR Intellectual Property contemplated by this Section 8.2.1. BII shall notify XENCOR within [...***...] of becoming aware of such XENCOR Intellectual Property.

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  8.2.2 BII   Improvements that (i) relate specifically to BII Confidential Information and Know-How, and (ii) do not relate to XENCOR Confidential Information and Know­How (collectively, BII Intellectual Property) will be exclusively owned by BII, and BII shall control patent prosecution and maintenance thereof. XENCOR agrees to assign and hereby assigns to BII all right title and interest it may have in any BII Intellectual Property. XENCOR shall provide reasonable assistance to BII for any action which may be necessary to assign or otherwise transfer such rights to BII Intellectual Property contemplated by this Section 8.2.2.   8.2.3 Other Improvements   Any Improvements that are neither XENCOR Intellectual Property nor BII Intellectual Property shall be defined as Other Improvements and shall be jointly owned by BII and XENCOR, with the Parties entitled to practice the same as joint owners, without duty of accounting to the other Party and with the right to license to others without consent of the other Party. BII shall notify XENCOR within [...***...] days of becoming aware of such Other Improvements. Each Party agrees to assign and hereby assigns to the other Party such right title and interest it may have in any Other Improvements as necessary to effect joint ownership of the Other Improvements by BII and XENCOR. Each Party shall provide reasonable assistance for any action which may be necessary to assign or otherwise transfer such rights to Other Improvements to Parties as joint owners. BII shall have the first right to prosecute and maintain patent rights within the Other Improvements, at its expense, provided that if BII elects not to prosecute or maintain an Other Improvement it shall provide written notice to XENCOR, and XENCOR may elect to take over responsibility for prosecution and maintenance of such Other Improvement, at its own expense, by providing written notice to BII, in which case all rights to such Other Improvement shall be assigned to XENCOR. For the avoidance of doubt, except as expressly stated otherwise in Section 10.3, Parties agree that XENCOR's use of the Process is always subject to Section 5.2.3, 5.2.4 and 5.2.5.   For the avoidance of doubt, (i) know-how pertaining to manufacturing of biopharmaceuticals generally and gained during the course of performing this Agreement may be freely used by BII in its biopharmaceutical business without any restrictions, provided, that, notwithstanding the foregoing, BII may not use any Other Improvement that relates specifically to the Product.   a. Each Party shall ensure that all of such Party's (or its Affiliated Company's) employees or contractors acting on its behalf pursuant to this Agreement are and will be obligated under a binding written agreement or by law to assign to such Party all inventions and rights on the inventions made under this Agreement so that such Party can comply with the terms of this Agreement.   b. Subject to the terms and conditions contained in this Agreement, BII shall be responsible for filing, prosecution and maintenance of patent applications and patents granted or generated under this Agreement and owned by BR. XENCOR shall be responsible for filing, prosecution and maintenance of patent applications and patents granted or generated under this Agreement and owned by XENCOR.   c. BII shall keep XENCOR and XENCOR shall keep BII reasonably informed about prosecution of any patent applications and maintenance of any patents generated under this Agreement.   8.2.4 Licenses to Xencor   BII grants to XENCOR the license set forth in Section 5.2.5 as provided therein.   8.2.5 Licenses to BII   a. Freedom to operate XENCOR hereby grants to BII and BII herewith accepts a non exclusive, worldwide, irrevocable, sublicensable (in several cascades), perpetual, royalty-free/fully paid up license under the XENCOR Intellectual Property to the extent it is generally applicable to the manufacturing of biopharmaceutical products, handling   27





  of cell lines and/or development of manufacturing processes, to use such XENCOR Intellectual Property in for the manufacture of biopharmaceutical products, handling of cell lines and/or development of manufacturing processes, but excluding any use with respect to the Product (or any modification, derivative or fragment thereof). BII expressly agrees not to practice any XENCOR Intellectual Property specific to the Product or for any purpose other than as expressly provided in this Section 8.2.5.   b. Performance of Project: During the term of this Agreement, XENCOR hereby grants to BII and BII hereby accepts for the purpose of pursuing the Project a non-exclusive, non-sub-licensable (except to Affiliated Companies), royalty-free, license to use the XENCOR Confidential Information and Know-How, the Material, the XENCOR Intellectual Property and/or any part of the Other Improvements for the sole purpose to develop the Process, and for the manufacturing of the Product for clinical purposes in accordance with this Agreement. BII expressly agrees not to use or practice any XENCOR Confidential Information and Know- How, the Material, and/or the XENCOR Intellectual Property for any purpose other than performance or the Services in accordance with this Agreement, except if otherwise expressly permitted in this Agreement.   9 Confidentiality   9.1 General   The Parties agree, for the duration of this Agreement and a term of [...***...] after the Effective Date: (a) to hold in strict confidence all Confidential Information and Know­How of a Party (Disclosing Party) or its Affiliated Companies which has been or will be made available to the other Party (Receiving Party) or its Affiliated Companies, and not to disclose such Confidential Information and Know­ How of the Disclosing Party to any third party whatsoever, (b) not to use such Confidential Information and Know-How of the Disclosing Party for any purpose other than those set forth herein. For clarification, all XENCOR Confidential Information and Know-How, XENCOR Technology and XENCOR Intellectual Property shall be Confidential Information and Know-How of XENCOR and XENCOR shall be the Disclosing Party and BII shall be the Receiving Party with respect thereto, and all BII Confidential Information and Know-How, BII Technology and BII Intellectual Property shall be Confidential Information and Know-How of BII and BII shall be the Disclosing Party and XENCOR shall be the Receiving Party with respect thereto.   The Receiving Party undertakes to protect the Disclosing Party's Confidential Information and Know ­How against unauthorized access by third parties using all commercially reasonable efforts.   If Confidential Information and Know-How is disclosed by Disclosing Party or its Affiliated Companies other than in written or electronic form, then Receiving Parties' obligations of confidentiality and non­use shall only apply if the Confidential Information and Know­How is indicated upon disclosure as being confidential and is then summarised electronically or in writing and provided to Receiving Party within [...***...] after initial disclosure. Notwithstanding the foregoing, in no event shall a failure to provide such an electronic or written summary preclude either Party from asserting that such information is Confidential Information and Know-How.   The obligations to keep secret, not to disclose and not to use the Disclosing Party's Confidential Information and Know­How or parts thereof shall not apply in the event that the respective Confidential Information or and Know-How such parts thereof:

***Confidential Treatment Requested   28





  a. can be shown by written documentation to have been known to Receiving Party or its Affiliated Companies prior to disclosure by the Disclosing Party or its Affiliated Companies hereunder or under the MTA (in no event will Confidential Information and Know- How of the Disclosing Party that is generated by the Receiving Party or its Affiliated Companies (e.g., Improvements that are XENCOR Intellectual Property) be considered to be known by the Receiving Party or its Affiliated Companies prior to disclosure by the Disclosing Party or its Affiliated Companies),   b. is or comes into the public domain by publication or otherwise through no breach of this Agreement or the MTA, or   c. can be shown by written documentation to have been made known to Receiving Party or its Affiliated Companies from another source free from any obligation of confidentiality and was not obtained either directly or indirectly from Disclosing Party or its Affiliated Companies, or   d. can be shown by written documentation to have been independently developed or created by Receiving Party or its Affiliated Companies without access to the other Party's Confidential Information and Know­How (in no event will Confidential Information and Know-How of the Disclosing Party that is generated by the Receiving Party or its Affiliated Companies (e.g., Improvements that are XENCOR Intellectual Property) be considered to be independently developed by the Receiving Party or its Affiliated Companies).   Confidential Information and Know-How not be deemed to be in the public domain merely because they may be derived from one or more items which are publicly known.   Receiving Party shall not disclose Disclosing Party Confidential Information and Know-How to any third party without the prior written consent of Disclosing Party, except to such of the Receiving Party's or its Affiliated Companies' responsible employees and/or advisors to whom it is necessary to disclose such Confidential Information and Know-How for purpose set forth herein. Before such Confidential Information and Know-How is disclosed to such employees and/or advisors, Receiving Party shall first impose on such employees and/or advisors confidentiality and non-use obligations not less stringent than those set forth herein, however, the imposition of such obligations shall not relieve Receiving Party of its obligations hereunder.   In the event that Receiving Party or its Affiliated Companies are required by law, regulation, rule, act or order of any governmental authority or agency to disclose the Disclosing Party's Confidential Information and Know­How, the Receiving Party or its Affiliated Companies shall be entitled to do so provided that Receiving Party shall first notify Disclosing Party forthwith of any such required disclosure and limit such disclosure as far as is possible under applicable law. Such disclosure shall, however, not relieve Receiving Party of its other obligations contained herein.   Furthermore, a Receiving Party may make such disclosures of the Disclosing Party's Confidential Information and Know­How to governmental entities to the extent reasonably necessary in connection with pursuit of intellectual property protection, development and commercialization activities related to the Product as contemplated by this Agreement, and approvals to use and sell the Product. Moreover, XENCOR may disclose BII Confidential Information and Know-How to entities (i) with whom XENCOR has (or may have) a marketing and/or development collaboration for the Product (including an actual or potential Business Partner) or (ii) that are actual or potential investors in or acquirers of XENCOR, to the extent reasonably necessary for the pursuit of such actual/ potential collaboration or relationship pursuant to (i) or (ii), and, in both cases, who have a specific need to know such information and who are bound by obligations of confidentiality and restrictions on use similar to those set forth in this Agreement, provided always that XENCOR may not disclose any BII   29





  Confidential Information and Know-How to any company whose primary business is providing biopharmaceutical CMO services except with BII's prior written consent.   9.2 MTA Superseded   The confidentiality and non-use obligations under the MTA shall be superseded hereby and all information disclosed pursuant to the MTA shall be Confidential Information and Know-How subject to this Agreement.   9.3 Controlled Technology   XENCOR hereby agrees and covenants that if it or its Affiliated Companies intend to provide Confidential Information and Know-How to BII or its Affiliated Companies that XENCOR has Knowledge may be listed on the Commerce Control List or the Chemical Weapons Convention Schedules of Chemicals, both contained within the U.S. Export Administration Regulations (hereinafter Controlled Technology), then XENCOR shall notify promptly BII of such Knowledge as soon as possible prior to such intended disclosure. In order for BII to take any appropriate precautionary actions before receipt of such Controlled Technology and to ensure compliance with U.S. export laws, XENCOR shall, before providing the Controlled Technology:   a. identify all Confidential Information and Know-How of XENCOR that may be Controlled Technology; and   b. inform BII, to the extent known to XENCOR, where the Controlled Technology is listed on the Commerce Control List or the Chemical Weapons Convention Schedules of Chemicals and what restrictions apply to the export or disclosure of the Controlled Technology under U.S. law.   XENCOR further agrees to cooperate with BII by providing upon request information and other assistance necessary for the export classification, export documentation and export licensing, if required, for the Controlled Technology under U.S. export laws.   In any event, XENCOR hereby agrees that it will not disclose Controlled Technology to BII or its Affiliated Companies without the express prior consent of BII.   10 Term and Termination   10.1 Term   This Agreement shall take effect as of the Effective Date and shall expire upon completion of the Project as set forth in the Project Plan and after payment of all payments due and payable according to this Agreement, unless terminated earlier in accordance with this Agreement.   10.2 Termination of this Agreement   10.2.1 If it is apparent to either Party at any stage of the Project that it will not be possible to carry out the Project for scientific, technical or business reasons, such Party may terminate this Agreement upon one hundred eighty (180) days prior written notice to the other Party.   10.2.2 Termination for Material Breach: This Agreement may be terminated at once by written notice by either Party, if the other Party breaches this Agreement in any material manner and shall have failed to remedy such default within thirty (30) days after written notice thereof from the terminating Party.   10.3 Effects of Termination of this Agreement   30





  10.3.1 Effect of Termination prior to completion of the Phase 1 clinical trial with the Product as described in Section 2.8.3.   a. In the event of termination by XENCOR according to Section 10.2.1 prior to completion of the Phase 1 clinical trial with the Product as described in Section 2.8.3 for technical and/or scientific reasons, XENCOR shall have no obligation to pay BII any or all of the Total Amount. For the avoidance of doubt, in such case, XENCOR may not use the Process outside BII, except as otherwise agreed in writing by XENCOR and BII.   b. In the event of termination by XENCOR according to Section 10.2.1 prior to completion of the Phase 1 clinical trial with the Product as described in Section 2.8.3. for any other reason than the reasons set forth under Section 10.3.1.a the Total Amount shall be limited to all non-cancellable expenses reasonably incurred by BII in accordance with the Project Plan prior to such termination in respect of the purchase of supplies or raw materials, and reasonable wind-down costs not to exceed sixty (60) days. BII shall mitigate all wind-down costs and non-cancellable expenses to the extent possible. Campaigns cancelled shall be paid as provided for in Section 4.2 above. For the avoidance of doubt, in such case, XENCOR many not use the Process outside BII, except as otherwise agreed in writing by XENCOR and BII.   c. In the event of termination by BII according to Section 10.2.1 prior to completion of the Phase 1 clinical trial with the Product, XENCOR shall have no obligation to pay BII any or all of the Total Amount. The use of the Process is subject to Section 5.2.3, 5.2.4 and 5.2.5.   d. In all of the foregoing cases a.-c., at the request of XENCOR and to the extent available at BII, BII shall destroy the Material or deliver the Material to XENCOR at XENCOR's cost and shall promptly return all XENCOR Confidential Information and Know­How to XENCOR; except for a copy and/or sample of each material for documentation purposes only, which shall remain to the confidentiality and non­use provisions in Section 9, and shall refrain from using the Material. Except for the foregoing, BII's responsibility to keep and store the Material and any other materials shall terminate one hundred eighty (180) days after expiration or termination of the respective Project or this Agreement.   In the foregoing cases a.-c., XENCOR shall promptly return all BII Confidential Information and Know-How to BII, except for a single copy and/or sample for documentation purposes only, which shall remain to the confidentiality and non-use provisions in Section 9, and shall refrain from using the Process, except as contemplated in Section 10.3.1.c or 10.3.1.d.   For the a voidance of doubt, in the event of a termination by XENCOR as contemplated in clause b of this Section 10.3.1, Section 3.1.2.c shall continue in effect, but Section 3.1.2 shall not survive in the event of any termination described in clause a. and c.   10.3.2 Effect of Termination after completion of the Phase 1 clinical trial with the Product as described in Section 2.8.3.   a. In the event of termination by XENCOR according to Section 10.2.1 after completion of the Phase 1 clinical trial with the Product as described in Section 2.8.3 for technical and/or scientific reasons, XENCOR shall have no obligation to pay BII any or all of the Total Amount. For the avoidance of doubt, in such case, XENCOR may not use the Process outside BII, except as otherwise agreed in writing by XENCOR and BII. For the avoidance of doubt, in the event of a termination as contemplated in this Section 10.3.2a, Section 3.1.2 c shall survive.   b. In the event of termination by XENCOR according to Section 10.2.1 after completion of the Phase 1 clinical trial with the Product as described in Section 2.8.3 for a reason not listed in Section 10.3.2.a, the Total Amount shall be limited to all non-cancellable expenses reasonably incurred by BII in accordance with the Project Plan prior to such   31





  termination in respect of the purchase of supplies or raw materials, and reasonable wind-down costs not to exceed sixty (60) days. BII shall mitigate all wind-down costs and non-cancellable expenses to the extent possible. Campaigns cancelled shall be paid as provided for in Section 4.2 above. For the avoidance of doubt, in the event of a termination as contemplated in this Section 10.3.2b, Section 3.1.2.c shall continue in effect. The use of the Process is subject to Sections 5.2.3, 5.2.4 and 5.2.5.   c. In the event of termination by BII according to Section 10.2.1 after completion of the Phase 1 clinical trial with the Product, XENCOR shall have no obligation to pay BII any or all of the Total Amount. The use of the Process is subject to Sections 5.2.3, 5.2.4 and 5.2.5. For the avoidance of doubt, in the event of a termination as contemplated in this Section 10.3.2c, Section 3.1.2 shall not survive.   10.3.3 Effect of Termination due to Material Breach   a. In case of a termination by BII according to Section 10.2.2, the Total Amount shall become immediately due and BII shall be free to claim for damages according to the applicable law and, subject to Section 7.4 above. All licenses granted by either Party to the other Party hereunder shall be null and void. For the avoidance of doubt, XENCOR may not use the Process outside BII, except as otherwise agreed in writing by XENCOR and BII; except that, if XENCOR has already exercised its rights under Sections 5.2.3, 5.2.4 and 5.2.5, all such rights granted prior to termination shall remain in effect.   b. In case of a termination by XENCOR according to Section 10.2.2, XENCOR shall have no obligation to pay BII any or all of the Total Amount, and subject to Section 7.4 above, XENCOR shall be free to claim for damages according to the applicable law. All licenses granted by XENCOR to BII hereunder shall be null and void. For the avoidance of doubt, Section 3.1.2 shall not survive in the event of termination as described in this Section 10.3.3.b. The use of the Process is subject to Sections 5.2.3, 5.2.4 and 5.2.5.   10.4 Surviving Provisions   Upon any expiration or termination of this Agreement by either Party pursuant to Section 10.2, all rights and obligations of the Parties under this Agreement shall terminate and be of no further force or effect, except as otherwise expressly set forth below in this Section 10.4 and in Section 10.3. The expiration or termination of this Agreement for any reason shall not release either Party from any liability that, at the time of such expiration or termination, has already accrued to the other Party or that is attributable to a period prior to such expiration or termination. The following provisions of this Agreement shall survive expiration or termination of this Agreement for any reason: Section 1 (Definitions), Section 3 (Payments) except as expressly set forth in Section 10.3; Section 5 (Ownership and Use of Project Data), Section 6.4 (Process for Defense of Infringement of Third Party Intellectual Property); Section 6.5 (Disclaimer of Warranties); Section 7 (Liability, Indemnification, Limitations and Insurance); Section 8 (Intellectual Property), but excluding the last sentence of the first paragraph of Section 8.2.3 (Other Improvements) referring to Sections 5.2.3, 5.2.4 and 5.2.4 except to the extent that those sections are expressly stated to survive termination as set forth in Section 10.3, and excluding Section 8.2.5b; Section 9 (Confidentiality); Section 10.3 (Effects of Termination of this Agreement), including the provisions referenced in Section 10.3 as continuing after termination, as applicable; Section 10.4 (Surviving Provisions); and Section 11 (Miscellaneous).   11 Miscellaneous   11.1 Force Majeure   Neither Party shall be in breach of this Agreement if there is any failure of performance under this Agreement (except for payment of any amounts due hereunder) occasioned by any reason   32





  beyond the control of either Party, including, without limitation, any act of God, fire, act of government or state, war, civil commotion, insurrection, embargo, prevention from or hindrance in obtaining energy or other utilities, or labour disputes of whatever nature.   11.2 Conflict with Improvements under the MTA   The Parties agree that with respect to the ownership of intellectual property rights and/or ownership of Improvements, this Agreement shall prevail over the terms and conditions of the MTA and shall also cover the term of the MTA.   11.3 Secrecy Agreement between the Parties   The Parties agree that all information exchanged pursuant to the Secrecy Agreement between the Parties with effectiveness as of June 28, 2011 shall be Confidential Information and Know-How protected in accordance with this Agreement, and such Secrecy Agreement shall be superseded by the terms of this Agreement and shall have no further force or effect.   11.4 Publicity   XENCOR or BII may issue the mutually agreed press release attached as Appendix 8 announcing the execution of this Agreement. Except as provided in the preceding sentence, no press release or other form of publicity regarding a Project or this Agreement shall be permitted by either Party to be published unless both Parties have indicated their consent to the form of the release in writing. The same applies, to any changes in the press release attached as Appendix 8. Nothing in this Section shall prevent the Parties from disclosing this Agreement, if and as far as required by applicable laws, rules or regulations. However, the disclosing Party shall inform the other Party well in advance whenever reasonably possible and shall provide the opportunity to comment on such required disclosure (e.g. under SEC rules). In addition, subject to XENCOR's compliance with Section 9.1, nothing in this Section shall prevent XENCOR from disclosing the status of development, regulatory approval or commercialization of the Product.   11.5 Notices   Any notice required or permitted to be given hereunder by either Party shall be in writing and shall be (i) delivered personally, (ii) sent by registered mail, return receipt requested, postage prepaid or (iii) delivered by facsimile with immediate confirmation of receipt, to the addresses or facsimile numbers set forth below:   If to BII:   Boehringer Ingelheim International GmbH Binger Straße 17355216 Ingelheim Federal Republic of Germany Attention: Mr. Alois Konrad (Global Dept. Biopharma Contract Manufacturing Business) Fax: 0049- 7351/54 - 4845 Phone: 0049- 7351/54 - 96145   33





  If to XENCOR:   111 West Lemon Avenue Monrovia, CA 91016 Attention: Chief Executive Officer Phone: (626) 305-5900 Fax: (626) 305-0350   11.6 Applicable Law and Arbitration   This Agreement shall be exclusively governed by and construed in accordance with the laws of the State of New York, USA without regard to its conflict of laws provisions.   The application of the UN Convention on Contracts for the International Sale of Goods is excluded.   The Parties agree that all disputes, claims or controversies arising out of, relating to, or in connection with this Agreement, including any question regarding its formation, existence, validity, enforceability, performance, interpretation, breach or termination, shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce (ICC) by one arbitrator appointed in accordance with said rules.   The exclusive place of arbitration shall be New York State of New York, USA and the proceedings shall be conducted in English language.   The award for arbitration shall be final and binding and may be enforced in any court of competent jurisdiction against BII or XENCOR. Nothing in this Section shall prevent any Party, before an arbitration has commenced hereunder or any time thereafter during such arbitration proceedings, from seeking conservatory and interim measures, including, but not limited to temporary restraining orders or preliminary injunctions, or their equivalent, from any court of competent jurisdiction.   The Parties further agree that   a. except as may be otherwise required by applicable laws, rules or regulations, neither Party, its witnesses, or the arbitrator may disclose the existence, content, results of the arbitration hereunder without prior written consent of both Parties; and   b. neither Party shall be required to give general discovery of documents, but may be required only to produce specific, identified documents, or narrow and specific categories of documents, which are relevant to the case and material to its outcome and reasonably believed to be in the custody, possession or control of the other Party; and   c. decisions ex aequo et bono or in equity are not permissible.   11.7 Entire Agreement   This Agreement (including the Exhibits and Schedules attached hereto) constitutes the entire agreement between the Parties relating to its subject matter and supersedes all prior or contemporaneous agreements, understandings or representations, either written or oral, between XENCOR and BII with respect to such subject matter (including the Secrecy Agreement effective as of June 28, 2011).   11.8 Waiver; Amendment   No waiver of any term, provision or condition of this Agreement whether by conduct or otherwise in any one or more instances shall be deemed to be or construed as a further or continuing waiver of any such term, provision or condition or of any other term, provision or   34

  condition of this Agreement. No amendment or modification of any provision of this Agreement shall be effective unless in writing signed by a duly authorized representative of each Party. No provision of this Agreement shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or any other matter not set forth in an agreement in writing and signed by a duly authorized representative of each Party.   11.9 Severability   If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction all other provisions shall continue in full force and effect. The Parties hereby agree to attempt to substitute for any invalid or unenforceable provision a valid and enforceable provision which achieves to the greatest extent possible the economic legal and commercial objectives of the invalid or unenforceable provision.   11.10 Dispute Resolution   Any dispute relating to the Project shall first be submitted for resolution to the Steering Committee.   11.11 Assignment   This Agreement shall be binding upon the successors and assigns of the Parties and the name of a Party appearing herein shall be deemed to include, the names of its successors and assigns. This Agreement shall not be assignable by either Party, except with the written





consent of the other Party hereto; provided, however, that either Party may assign this Agreement without the other Party's consent to an acquiring party in connection with the transfer or sale of all or substantially all of the business of such Party to which this Agreement relates to such acquiring party, whether by merger, sale of stock, sale of assets or otherwise, provided that in the event of such a sale or transfer (whether this Agreement is actually assigned or is assumed by the acquiring party by operation of law (e.g,. in the context of a reverse triangular merger)).   11.12 Independent Contractors   Nothing in this Agreement is intended, or shall be deemed, to establish a joint venture or partnership (or any fiduciary duty) between XENCOR and BII. Neither Party to this Agreement shall have any express or implied right or authority to assume or create any obligations on behalf of, or in the name of, the other Party, or to bind the other Party to any contract, agreement or undertaking with any third party.   11.13 Counterparts   This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.   35





  IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the Effective Date.





  Monrovia, February 16 2012

  Biberach, February 13, 2012









  XENCOR, Inc.

  Boehringer Ingelheim International GmbH











 ppa.   ppa.







  /s/ Bassil Dahiyat





 /s/ Alois Konrad



 /s/ Dr. Andreas Felder   Bassil Dahiyat





 Alois Konrad



 Dr. Andreas Felder   President and CEO













  36





  List of Appendices:   Appendix 1: Material and Product   Appendix 2: Project Plan   Appendix 3: Members of the Project Team, Steering Committee and Chief Executive Officers   Appendix 4: MTA   Appendix 5: Quality Agreement   Appendix 6: Specifications, incl. shipping and packing instructions agreed by the Parties (to be attached upon agreement of the Parties)   Appendix 7: Summary Plan for Phase 1 Clinical Trials   Appendix 8: Press Release   37





  Appendix 1:   XmAb®6755 : Anti­TNF_Adalimumab_lgG1/2_M428L/N434S_Xtend Heavy Chain ORF (Protein) [...***...] [...***...]   [...***...]   [...***...] [...***...]   [...***...]

***Confidential Treatment Requested   38





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***Confidential Treatment Requested   39









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***Confidential Treatment Requested   40





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***Confidential Treatment Requested   41









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***Confidential Treatment Requested   42









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***Confidential Treatment Requested   43





  Appendix 2:   Appendix 2.1: Project Plan and Price Project Plan Xtend-TNF Process Development Manufacturing of Clinical Grade Material   44



  Appendix 2.1: Project Plan and Price Project Plan Xtend-TNF Process Development Manufacturing of Clinical Grade Material   Version of December 19, 2011   45





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***Confidential Treatment Requested   48





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***Confidential Treatment Requested   50





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***Confidential Treatment Requested   51





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***Confidential Treatment Requested   53





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***Confidential Treatment Requested   56





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***Confidential Treatment Requested   58





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***Confidential Treatment Requested   59





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***Confidential Treatment Requested   60





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***Confidential Treatment Requested   62





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***Confidential Treatment Requested   63





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***Confidential Treatment Requested   64

  Appendix 3:   Members of the Project Team and Steering Committee   […***…]   […***…]   […***…]   […***…]     […***…]   […***…]   […***…]   […***…]

***Confidential Treatment Requested   65





  Appendix 4:   MTA   […***…]     […***…]   […***…]   […***…]   […***…]   […***…]   […***…]   […***…]   […***…]   […***…]   […***…]   […***…]   […***…]

***Confidential Treatment Requested   66





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***Confidential Treatment Requested   67





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***Confidential Treatment Requested   68





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***Confidential Treatment Requested   69





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***Confidential Treatment Requested   70





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***Confidential Treatment Requested   71





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***Confidential Treatment Requested   72





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***Confidential Treatment Requested   73





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***Confidential Treatment Requested   74

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***Confidential Treatment Requested   75





  Appendix 5   Quality Agreement     […***…]   […***…]   […***…]     […***…]     […***…]   […***…]   […***…]   […***…]   […***…]     […***…]     […***…]     […***…]   […***…]   […***…]     […***…]

***Confidential Treatment Requested   76





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***Confidential Treatment Requested   77





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***Confidential Treatment Requested   78





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***Confidential Treatment Requested   79





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***Confidential Treatment Requested   80





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***Confidential Treatment Requested   81





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***Confidential Treatment Requested   85





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***Confidential Treatment Requested   86





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***Confidential Treatment Requested   87





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***Confidential Treatment Requested   88





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***Confidential Treatment Requested   89





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***Confidential Treatment Requested   90





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***Confidential Treatment Requested   91





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***Confidential Treatment Requested   92





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***Confidential Treatment Requested   93







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***Confidential Treatment Requested   94

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***Confidential Treatment Requested   95





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***Confidential Treatment Requested   96





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***Confidential Treatment Requested   97





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***Confidential Treatment Requested   98





  Appendix 6:   Specifications, incl. shipping and packing instructions agreed by the Parties (to be attached upon agreement of the Parties)   […***…]

***Confidential Treatment Requested   99





  Appendix 7:   Summary Plan for Phase I Clinical Trials   […***…]

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***Confidential Treatment Requested   100





  Appendix 8:   Press Release   February 8th, 2012   Boehringer Ingelheim GmbH Corporate Communications: Heidrun Thoma +49/6132 77 3966 Heidrun.Thoma@boehringer-ingelheim.com Twitter: www.twitter.com/boehringer   Xencor Media Contact Heidi Chokeir, Ph.D. Canale Communications Tel: 619-849-5377 heidi@canalecomm.com   Boehringer Ingelheim and Xencor Enter a Collaboration Agreement for the  Development, Manufacture, and Supply of Biosuperior Monoclonal Antibodies   Antibodies engineered with Xencor's proprietary Xtend™ technology for increasing antibody half­life   MONROVIA, Calif., USA and INGELHEIM, Germany — February 14 , 2012 — Xencor, Inc., a company using its proprietary Protein Design Automation® (PDA) platform technology to engineer next­generation antibodies, and Boehringer Ingelheim announced today a collaboration agreement for certain Xencor biosuperior monoclonal antibodies. Under the terms of the agreement, Boehringer Ingelheim will provide all manufacturing and product supply from preclinical through Phase I development. Xencor is responsible for preclinical and clinical studies and retains all development and commercial rights to products under the agreement. Upon successful advancement of clinical programs beyond Phase 1 development, Boehringer Ingelheim has certain manufacturing rights to supply clinical and commercial material to Xencor. Xencor has developed deep portfolio of biosuperior antibodies with the potential for superior clinical and commercial performance, and this collaboration agreement with Boehringer Ingelheim allows us to establish an important relationship with the leading global contract manufacturer of biologics, said Bassil Dahiyat, Ph.D., president and CEO of Xencor. Xencor and Boehringer Ingelheim will share the financial risk in early preclinical and clinical development with the incentive of sharing in future success of the programs.   We are delighted to start this collaboration with Xencor. It reflects one of our new business models in the contract manufacturing in which both parties are enabled to focus on their core competencies, stated Corporate Senior Vice President Simon Sturge at Boehringer Ingelheim Biopharmaceuticals. We are convinced that this creates a win­win situation for both parties. Xencor's lead biosuperior compound is an anti­TNF antibody engineered using the company's proprietary Xtend™ antibody engineering technology for increasing antibody half­life. Xencor expects to initiate a Phase 1 trial in 2013 potentially resulting in key human pharmacokinetic data validating Xtend technology.   101

th





  About Xencor, Inc.   Xencor, Inc. engineers superior biotherapeutics using its proprietary Protein Design Automation® technology platform, and is a leader in the field of antibody engineering to significantly improve antibody half-life, immune-regulatory function and potency. The company is advancing multiple XmAb® antibody drug candidates in the clinic, including XmAb®5871 targeting CD32b and CD19 for autoimmune diseases, and an anti­ CD30 candidate XmAb®2513 for the treatment of Hodgkin's lymphoma. Xencor is also advancing a portfolio of biosuperior versions of blockbuster antibody drugs engineered for superior half-life and dosing schedule. Xencor has entered into multiple partnerships with industry leaders such as Amgen, Pfizer, Centocor, MorphoSys, Boehringer Ingelheim, CSL Ltd. and Human Genome Sciences. In these partnerships Xencor is applying its suite of proprietary antibody Fc domains to improve antibody drug candidates for traits such as sustained half-life and/or potency. For more information, please visit www.xencor.com.   About Boehringer Ingelheim   The Boehringer Ingelheim group is one of the world's 20 leading pharmaceutical companies. Headquartered in Ingelheim, Germany, it operates globally with 145 affiliates in 50 countries and more than 42,000 employees. Since it was founded in 1885, the family-owned company has been committed for 125 years to researching, developing, manufacturing and marketing novel products of high therapeutic value for human and veterinary medicine.   Today, Boehringer Ingelheim is one of the world's leading companies for contract development and manufacture of biopharmaceuticals. All types of services from mammalian cell line or microbial strain development to final drug production can be delivered within a one-stop-shop concept. Boehringer Ingelheim delivers services for pre-clinical development up to global market supply with a strong commitment to its customers at its global manufacturing facilities for mammalian cell culture and microbial fermentation. Boehringer Ingelheim has brought 19 molecules to market and has many years of experience in multiple molecule classes such as monoclonal antibodies, recombinant proteins, interferons, enzymes, fusion molecules and plasmid DNA. Furthermore, high-titer platform technologies for new antibody mimetic formats such as scaffold proteins and antibody fragments are available for the manufacture of customer products. www.biopharma-cmo.com.   For more information, please contact:   Xencor Inc. Heidi Chokeir, Ph.D. Canale Communications for Xencor Tel: 619-849-5377 heidi@canalecomm.com   Boehringer Ingelheim GmbH Heidrun Thoma Corporate communications Boehringer Ingelheim GmbH 55216 Ingelheim/Germany Phone: +49/6132 77 3966   Twitter: www.twitter.com/boehringer More information: bio-cmo@boehringer-ingelheim.com   102 
Question: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?
[EX A]: XENCOR and BII shall obtain and/or maintain during the term of this Agreement and for a period of [...***...] thereafter, liability insurance in amounts which are reasonable and customary in the biopharmaceutical industry for companies of comparable size and the respective activities (i.e. BII as CMO and XENCOR as sponsor/pharmaceutical company) at the respective place of business and such liability insurance shall insure against all mandatory liability, including liability for personal injury, physical injury and property damage.

[EX Q]: Exhibit 10.1     SPONSORSHIP AGREEMENT   BY AND BETWEEN   ANTHEMIC, LLC & VNUE   This Sponsorship Agreement (the Agreement) is entered into as of JUNE 23, 2015 (the Effective Date) by and between ANTHEMIC, LLC (ANTHEMIC) and VNUE INC (the Sponsor).   A. ANTHEMIC is producing FLOODFEST Chicago 2015. In this Agreement, Event means the FLOODfest Event at the Virgin Hotel Chicago. The Event is scheduled for Thursday July 30, 2015 thru Saturday, August 1st, 2015 (the Event Date(s)).   B. VNUE is a video streaming App/Technology Company. ANTHEMIC and VNUE both want VNUE to be a sponsor of the Event under the terms of this Agreement.   For and in consideration of the mutual covenants, rights, and obligations set forth in this Agreement, the parties agree as follows:   1. Sponsorship.   (a) During  the term of this Agreement, the Sponsor will be a co-presenting sponsor of FLOODfest Chicago at Virgin Hotel, which entitles the Sponsor to the following:   (i) Sponsor will be a non-exclusive co-presenting sponsor of the Event.   (ii) ANTHEMIC shall provide to Sponsor space for a VNUE activation on the 3rd Floor at Virgin Hotel (the Sponsor area). This space will be roughly 10 feet by 10 feet (100 square feet).   (iii) Sponsor shall receive access to the On-Site Event Dates location for onsite distribution of Company approved marketing materials. Specific amount of said materials To Be Determined, after being mutually agreed upon by both ANTHEMIC and VNUE.   (iv) Sponsor will be included as co-presenting partner upon on-site signage.   (v) Distribute approved promotional materials as part of VNUE's activation, VNUE responsible for staffing of said activation.   (vi) Conduct demonstrations, approved activation in designated area on 3rd Floor   (vii) Name  or logo usage of FLOODfest Chicago use, No Rights for use of official Lollapalooza Festival are given as part of this sponsorship.   (viii) Rights to event marks subject to FLOOD Magazine and ANTHEMIC approval.   (ix) The Sponsor's logo or name on Event website and opt in on RSVP page for event   (x) Full page ad in fall issue of FLOOD Magazine   (xi) Dedicated e-mail sent to attendees post-event to watch and/ or listen to FLOODfest content

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  (xii) One month ROS of FLOODMAGAZINE.COM. Campaign beginning August 2015. All finished art and deliverables must be sent from VNUE to ANTHEMIC by no later than July 15, 2015 to insure inclusion. Refer to media plan for specific dates. (xiii) The Sponsor's logo or name on all print and/or web Event collateral (xiv) The Sponsor's logo or name included on Event website and opt-in RSVP pages, as follows: FLOODmagazine.com/ FLOODfestChicago and/ or FLOODfest.com (xv) The Sponsor's logo or name also included on any FLOODfest Chicago flyers (digital and/ or physical). (xvi) The Sponsor's logo or name also included on FLOODfest Chicago-dedicated email blasts, both pre and post event. These email blasts will include a call to action to watch and/ or listen to content from FLOODfest Chicago shows, with a link to download the VNUE app. (xvii) Post-event email blast(s) will go out as soon as possible, once the FLOODfest Chicago content is ready, ideally targeting that next Monday, August 10, 2015. Formal blast date will be dependent upon turn-around time of content from VNUE (maximum ANTHEMIC/ FLOOD Magazine turnaround time = VNUE content delivery date+7 days). This post-event email blast will go out to tall ANTHEMIC and FLOOD Magazine RSVP's, as well as our FLOOD Magazine's national newsletter list of roughly 100,000 recipients. (xviii) There will be a press release generated by ANTHEMIC and FLOOD Magazine for FLOODfest Chicago. This press release will include mention of VNUE as co-presenting sponsor of said event. (xix) ANTHEMIC and FLOOD Magazine will promote FLOODfest Chicago content page(s), including The Sponsor logo or name via FLOOD Magazine socials including: Twitter, Facebook and Instagram. (xx) FLOOD Magazine will have at least one future editorial piece based around FLOODfest Chicago content, and VNUE will be featured within this piece. (xxi) FLOODfest Chicago data will be collected, compiled and forwarded to VNUE by Monday August 10, 2015. (xxii) VNUE may include approved FLOOD Magazine logo or name on top of videos. VNUE is also approved to use the phrasing FLOODfest LIVE at Virgin Hotel Chicago above applicable FLOODfest Chicago video content. (xxiii) ANTHEMIC and/ or FLOOD Magazine agree to introduce key VNUE personnel/ staff to key VIRGIN HOTEL CHICAGO personnel/ staff, upon receipt of final payment, on or before July 15, 2015. (b) All  costs associated with the creation, operation and management of the Sponsor Area and  any activities conducted, included (without limitation) the set-up, breakdown and staffing of the Sponsor Area, recording and filming of live shows, and artist and label/ mechanical clearances shall be the sole responsibility of the Sponsor.

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    (c) ANTHEMIC will have no liability whatsoever for (and Sponsor shall indemnify and hold ANTHEMIC harmless for) any injuries to persons, or loss of damage to property arising out of or  in any way related to the Sponsor Area, or to any property, materials, products and/or merchandise which Sponsor uses, distributes and/or exhibits during Event Dates.       2. Sponsorship Consideration.       (a) To be a sponsor of the Event, the Sponsor will pay ANTHEMIC the following:

Fee Due Dates

$75,000 - Sponsorship Fee $50,000 due upon receipt of this term sheet   $25,000 final balance payment due upon announcement date of July 15, 2015.

  (b) If the Sponsor fails to pay ANTHEMIC within the designated time period, then interest will begin to accrue immediately on the past due amount at the rate of the lesser of the maximum amount allowed by law or 10% annually. If it becomes necessary for ANTHEMIC to retain legal counsel to collect any portion of the fees due under this Agreement, in addition to all such fees, the Sponsor will be liable for payment of all legal fees incurred by ANTHEMIC plus interest at the maximum rate permitted by law on any late payments plus any other costs of collection.   3.  Term and Termination: This term of this Agreement commences on the Effective Date and terminates on August 2nd, 2015 upon completion of event. ANTHEMIC may at any time terminate this Agreement if the Sponsor breaches any material term or provision of this Agreement.   4. Sponsorship of Future FLOODfest Chicago event. Before April 1, 2016 ANTHEMIC will not discuss in any manner with any person or entity (other than the Sponsor) to be a sponsor of the Event in the Video App category. If ANTHEMIC produces the Event in 2016 and seeks a sponsor in the category, ANTHEMIC will first contact the Sponsor and provide the Sponsor with written notice (the Notice) of the terms under which the Sponsor can be the category sponsor for the 2016 Event. The Sponsor will have 15 days from receipt of the Notice to accept the terms to be the category sponsor of the 2014 Event. If the Sponsor decides not to be the category sponsor of the 2016 Event or fails to timely respond to the Notice, then ANTHEMIC may approach other parties to be the category sponsor.

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  5. License.   (a) The Sponsor grants ANTHEMIC a license to use the Sponsor's name, logo, and other identifying characteristics in promoting the Event. ANTHEMIC may use the Sponsor's name, logo, and other identifying characteristics on merchandise related to the Event, and the Sponsor is not entitled to any compensation from the sale of such merchandise. The right to use the Sponsor's name, logo and other identifying characteristics in connection with merchandise for the 2015 Event survives termination of this Agreement. After termination of this Agreement, ANTHEMIC may not design new merchandise that includes the Sponsor's name, logo, or other identifying characteristics for the 2015 Event but may produce additional previously designed and approved merchandise.   (b) During the term of this Agreement, the Sponsor may identify itself as a sponsor of the Event in any and all of its advertising for the Sponsor's products and or services in the Category. ANTHEMIC will provide the Sponsor with a suite of official logos and images for the Event to use on advertising, web site and other avenues as approved by ANTHEMIC. Any use by the Sponsor of the Event's name or logo must be approved in advance by ANTHEMIC. Any creative work used by the Sponsor with respect to this Agreement must be approved by ANTHEMIC.   (c) Any use by ANTHEMIC of the Sponsor's name or logo, must be approved in advance by the Sponsor. Subject to the preceding, ANTHEMIC has absolute control and discretion regarding all signage at the Event.   (d)  ANTHEMIC acknowledges the Sponsor's exclusive ownership in the Sponsor's trademarks and further acknowledges that the trademarks are unique and original to the Sponsor and that the Sponsor is the owner of the trademarks. ANTHEMIC will not, at any time during or after the Effective Date, dispute or contest, directly or indirectly, the Sponsor's exclusive ownership in the Sponsor's trademarks. ANTHEMIC acknowledges that its use of the Sponsor's trademarks inures to the Sponsor's benefit, and that ANTHEMIC will not acquire any ownership in the Sponsor's trademarks as a result of the license granted by this Agreement.   (e)  The Sponsor acknowledges ANTHEMIC's exclusive ownership in their respective trademarks and further acknowledges that the trademarks are unique and original to ANTHEMIC and that ANTHEMIC are the owners of their respective trademarks. The Sponsor will not, at any time after the Effective Date, dispute or contest, directly or indirectly, ANTHEMIC's exclusive ownership in their respective trademarks. The Sponsor acknowledges that its use of ANTHEMIC's trademarks inures to ANTHEMIC's benefit, and that the Sponsor will not acquire any ownership in ANTHEMIC's trademarks as a result of the license granted by this Agreement.

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  The Sponsor acknowledges that it has no claims or rights in the FLOODfest trademark and, during or after the Term of this Agreement, will not assert any claim in the FLOODfest trademark.   6. Sponsor Merchandise. The Sponsor may not distribute any merchandise or articles at the Event without ANTHEMIC's prior written consent.   7. Force Majeure. Any delay or failure of either party to perform its obligations under this Agreement is excused to the extent that it is caused by an event or occurrence beyond its reasonable control, including acts of God, actions by governmental authority (whether valid or invalid), fires, floods, windstorms, explosions, riots, natural disasters, wars, sabotage or labor problems, provided the party claiming force majeure promptly notifies the other party of the event of force majeure, the anticipated duration of the event of force majeure, and the steps being taken to remedy the failure.   8. Rain or Shine. ANTHEMIC anticipates that the Event will be held regardless of the weather. If the Event cannot be held on the scheduled dates, ANTHEMIC will make good faith efforts to re-schedule the Event. The Sponsor must provide the consideration in Section 2 regardless of whether the Event is actually held.   9. Warranties.   (a) The Sponsor's Warranty. The Sponsor warrants to ANTHEMIC that: (i) the Sponsor has the right and authority to enter into and perform its obligations under this Agreement; (ii) the Sponsor will perform its obligations under this Agreement in a commercially reasonable manner; (iii) the Sponsor's marks do not and will not violate any applicable law or regulation or infringe any proprietary, intellectual property, contract or tort right of any person; and (iv) the Sponsor owns its marks and all intellectual property rights therein.   (b) ANTHEMIC Warranty. ANTHEMIC represents and warrants to the Sponsor that: (i) ANTHEMIC has the rights and authority to enter into and perform its obligations under this Agreement, and that, in doing so, it will not violate the rights of any third parties; (ii) any ANTHEMIC- provided materials (including trademarks) will not contain any content, materials or advertising that actually or potentially violates any applicable law or regulation or infringe any proprietary, intellectual property, contract or tort right of any person; and (iii) ANTHEMIC will perform its obligations under this Agreement in a commercially reasonable manner.

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  10. Indemnification.   (a)  By The Sponsor.  The Sponsor will indemnify, hold harmless and defend ANTHEMIC, and their directors, officers, shareholders, members, managers, employees and agents from and against any action, claim, demand, expense, or liability, including reasonable attorneys' fees and court costs incurred in connection with any claim, demand, or suit for damages, injunction, or other relief to the extent such claim arises out of: (i) any allegation that the Sponsor's marks infringe a third person's copyright or trademark right, or misappropriate a third person's trade secret; (ii) any gross negligence or willful misconduct of the Sponsor; (iii) Sponsor's products; (iv) consumer or other contesting/ prizing. ANTHEMIC will have the right to participate, at its own cost, in the defense of any such claim through counsel of its own choosing.   (b) By ANTHEMIC. ANTHEMIC will indemnify, hold harmless and defend the Sponsor, and its directors, officers, employees and agents from and against any action, claim, demand, expense, or liability, including reasonable attorneys' fees and court costs incurred in connection with any claim, demand, or suit for damages, injunction, or other relief to the extent such claim arises out of: (i) any allegation that ANTHEMIC's marks infringe a third person's copyright or trademark right, or misappropriate a third person's trade secret; or (ii) any gross negligence or willful misconduct of ANTHEMIC. The Sponsor will have the right to participate, at its own cost, in the defense of any such claim through counsel of its own choosing.   11. Insurance. Without limiting or qualifying the Sponsor's liabilities, obligations, or indemnities, before the Event, the Sponsor will obtain, at its sole cost and expense, a comprehensive general liability insurance policy from a company acceptable to ANTHEMIC and authorized to do business in the state of Illinois with limits of no less than $1,000,000.00 per occurrence and $2,000,000.00 as an annual aggregate. The insurance mentioned in the preceding sentence will name ANTHEMIC as additional insured. The Sponsor will also maintain any statutorily required workers compensation insurance. The Sponsor will provide ANTHEMIC with properly executed certificates of insurance before the Sponsor provides any products or services at the Event, and the insurance will contain a provision that it cannot be reduced or cancelled unless and until the insurance company notifies ANTHEMIC. Any third party that performs services on the Event grounds on behalf of the Sponsor will be required to satisfy the same insurance requirements as provided in this section.   12. Independent Contractors. The parties and their respective personnel, are and will be independent contractors and neither party by virtue of this Agreement will have any right, power or authority to act or create any obligation on behalf of the other party, unless expressly provided in this Agreement.

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    13. Notices. All notices and payment given in accordance with this Agreement will be effective if hand delivered or sent by overnight courier or by certified mail, return receipt requested to the following addresses:   ANTHEMIC, LLC 5810 W. 3rd Street LA, CA 90036 Attn: Alan Sartirana     VNUE INC 2003 Western Avenue, Suite 460 Seattle, Washington 98121 ATTN: Matthew Carona   Addresses for notice may be changed from time to time by written notice to the other party. Any communication or payment given by mail will be effective upon the earlier of (a) five business days following deposit in a post office or other official depository under the care and custody of the United States Postal Service; or (b) actual receipt, as indicated by the return receipt. If notice or payment is given by personal delivery or by overnight air courier, the notice or payment will be effective when delivered to the appropriate address set forth above.   14.  LIMITATION OF DAMAGES. EXCEPT FOR INDEMNIFICATION  OBLIGATIONS DUE TO LIABILITIES TO THIRD PARTIES, NOTWITHSTANDING ANY PROVISION CONTAINED IN THIS AGREEMENT TO THE CONTRARY, NO PARTY TO THIS AGREEMENT WILL BE LIABLE TO ANY OTHER PARTY TO THIS AGREEMENT FOR ANY INCIDENTAL, INDIRECT, SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES (INCLUDING DAMAGES FOR LOSS OF USE, POWER, BUSINESS GOOD WILL, REVENUE OR PROFIT, NOR FOR INCREASED EXPENSES, OR BUSINESS INTERRUPTION) ARISING OUT OF OR RELATED TO THE PERFORMANCE OR NON PERFORMANCE OF THIS AGREEMENT UNLESS THE DAMAGES AROSE DUE TO A PARTY'S GROSS NEGLIGENCE OR WILLFUL BREACH OF THIS AGREEMENT.   15. Survival. Those provisions of this Agreement that by their nature extend  beyond termination or expiration of this Agreement will survive such termination or expiration.   16.  Assignment.  This Agreement is personal to each of the parties, and neither party may assign or delegate any of its rights or obligations under this Agreement without first obtaining the other party's written consent.

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  17. Governing Law and Venue. This Agreement is to be governed and construed according to the laws of the State of California without regard to conflicts of law. The proper exclusive venue for resolution of any dispute related to this Agreement is only in Los Angeles, California, and both parties consent to jurisdiction and venue in Los Angeles, California.   18. Entire Agreement. This Agreement contains the entire agreement between the parties relative to the subject matter and supersedes any other prior understandings, written or oral, between the parties with respect to this subject matter. No variations, modifications, or changes in the Agreement are binding on any party to the Agreement unless set forth in a document duly executed by or on behalf of such parties.   19. Section References. When this Agreement makes reference to an article, section, paragraph, clause, schedule or exhibit, that reference is to an article, section, paragraph, clause, schedule or exhibit of this Agreement unless the context clearly indicates otherwise. Whenever the words include, includes, or including are used in this Agreement, they are deemed to be followed by the words without limitation.   20. Severability. If a mediator, arbitrator, or court holds, for any reason, that one or more provisions of this Agreement is invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability will not affect any other provision of this Agreement, but such provision will be deemed deleted, and the deletion will not affect the validity of other provisions of this Agreement.   21. Counterparts. The parties may execute this Agreement in any number of counterparts, each of which is deemed an original, but all of which together constitute one and the same instrument. This Agreement may be executed by facsimile, PDF, or other electronic signature.   22. Construction. All parties have been advised to seek their own independent counsel concerning the interpretation and legal effect of this Agreement and have either obtained such counsel or have intentionally refrained from doing so and have knowingly and voluntarily waived such right. Consequently, the normal rule of construction to the effect that any drafting ambiguities are to be resolved against the drafting party will not be employed in the interpretation of this Agreement or any amendment or exhibits.

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  By their representative's signature, the parties agree to and accept this Agreement.   ANTHEMIC, LLC   VNUE, INC               By: Alan Sartirana   By: /s/ Matthew Carona                 Title: CEO/ Founder   Title: CEO                 Date: June 23, 2015   Date: June 23rd 2015

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Question: Highlight the parts (if any) of this contract related to Covenant Not To Sue that should be reviewed by a lawyer. Details: Is a party restricted from contesting the validity of the counterparty’s ownership of intellectual property or otherwise bringing a claim against the counterparty for matters unrelated to the contract?
[EX A]:
ANTHEMIC will not, at any time during or after the Effective Date, dispute or contest, directly or indirectly, the Sponsor's exclusive ownership in the Sponsor's trademarks.