Document:

Amended and Restated Development and Licensing Agreement

 CERTAIN INFORMATION IN THIS EXHIBIT IS SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT. IN ACCORDANCE WITH RULE 24b-2
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, SUCH INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATION OF SUCH OMITTED INFORMATION HAS BEEN INDICATED WITH ASTERISKS (*****).

  
 AMENDED AND RESTATED 
 DEVELOPMENT AND LICENSING AGREEMENT 
  
 This Amended and Restated Development and Licensing Agreement (“Agreement”) is made and entered into as of the 25th day of February, 2004 (the “Effective Date”), between Tanox, Inc. (formerly known as Tanox Biosystems, Inc.),
originally a Texas corporation and reincorporated as a Delaware corporation (“Tanox”), and Novartis Pharma AG, a company organized and existing under the laws of Switzerland (as successor-in-interest of Ciba-Geigy Limited)
(“Novartis”). (Each of Novartis and Tanox is referred to herein individually as a “Party” and all are referred to collectively herein as the “Parties.”) 
  
 R E C I T A L S: 
  
 WHEREAS, Tanox and Ciba-Geigy Limited (“Ciba-Geigy”) entered
into that certain Development and Licensing Agreement dated as of May 11, 1990 (the “Original D&L Agreement”), providing for cooperation in the research, development and commercialization of anti-IgE antibody-based treatments in
humans for IgE-mediated diseases; and 
  
 WHEREAS, Tanox and
Ciba-Geigy also entered into that certain Loan Agreement effective December 13, 1994 (the “Loan Agreement”), pursuant to which Ciba-Geigy agreed to lend Tanox ***** for the construction, validation, and start-up of a mammalian
cell-culture pilot manufacturing facility located at Tanox’s facility in Houston, Texas; and 
  
 WHEREAS, Genentech Inc., a Delaware corporation (“Genentech”), Genentech International Limited, Tanox, and Ciba-Geigy entered into a
certain Outline of Terms for Settlement of the Litigations among Genentech, Genentech International Limited, Tanox and Ciba-Geigy, dated as of July 8, 1996, relating to anti-IgE inhibiting antibodies (the “Outline of Terms”), which
contemplated that the Parties will negotiate and enter into (a) detailed agreement(s) implementing and completing the terms contained in the Outline of Terms; and 
  
 WHEREAS, Tanox and Ciba-Geigy entered into a certain Supplemental Agreement dated as of July 8, 1996, which modified and
amended the Original D&L Agreement (the “Supplemental Agreement”); and 
  
 WHEREAS, subsequent to the execution of the Original D&L Agreement, the Outline of Terms and the Supplemental Agreement, Ciba-Geigy has been succeeded by Novartis with respect to the research, development,
manufacture and commercialization of pharmaceutical specialty products and with respect to all the rights and obligations relevant to Ciba-Geigy under the Original D&L Agreement, the Outline of Terms and the Supplemental Agreement, as a result
of its merger with Sandoz Ltd.; and 
  
 WHEREAS, certain disputes
have arisen between Novartis and Genentech, on the one hand, and Tanox, on the other hand, concerning their respective rights regarding anti-IgE 

  

 
inhibiting monoclonal antibodies and certain lawsuits and arbitration proceedings have been initiated by the Parties to resolve such disputes; and

  
 WHEREAS, Novartis, Genentech and Tanox intend to enter into a
Tripartite Cooperation Agreement (the “TCA”) for the purpose of resolving certain of those disputes, terminating such lawsuits and arbitration proceedings, implementing certain aspects of the Outline of Terms and cooperating with
each other with respect to the development and commercialization of Anti-IgE Antibodies and Anti-IgE Products (each as defined in the TCA) throughout the world on the terms and subject to the conditions set forth in such Tripartite Cooperation
Agreement; and 
  
 WHEREAS, Novartis and Tanox wish to amend and
restate the Original D&L Agreement as set forth herein such that, with effect from the date hereof, this Agreement (a) applies only to Potential Products (as defined herein) and (b) represents: (i) all aspects of the Original D&L Agreement,
as the same shall be amended herein, related to such Potential Products; and (ii) Section 3 of the Supplemental Agreement. 
  
 WHEREAS, in connection with entering into this Agreement, Tanox and Novartis intend to enter into an Ancillary Development & Licensing Agreement which
represents: (a) all aspects of the Original D&L Agreement related to Anti-IgE Antibodies and Anti-IgE Products in East Asia and the Rest of World (as defined in the TCA); (b) Sections 1 and 2 of the Supplemental Agreement; and (c) all bipartite
aspects (as between Novartis and Tanox) of the Detailed Agreement envisaged by the Outline of Terms relating to the development and commercialization of Anti-IgE Antibodies and Anti-IgE Products in East Asia and the Rest of World ; 
  
 NOW, THEREFORE, in consideration of the following mutual promises and
obligations, and for other good and valuable consideration the adequacy and sufficiency of which is hereby acknowledged, the Parties hereto hereby agree as follows: 
  

	 	1.	Definitions. 

  
 1.1 “Abandoned Product(s)” shall mean any Product(s) (including the related Family of Antibodies and Novartis derivatives thereof) with
respect to which Novartis relinquishes its rights in one or more countries under this Agreement in accordance with Section 6.9, at which point such Product (including the related Family of Antibodies and Novartis derivatives thereof) shall no longer
be a “Product” under this Agreement. 
  
 1.2
“Affiliate” shall mean, with respect to any Person, (i) any other Person of which the securities or other ownership interests representing fifty percent (50%) or more of the equity or fifty percent (50%) or more of the ordinary
voting power or fifty percent (50%) or more of the general partnership interests are, at the time such determination is being made, owned, Controlled or held, directly or indirectly, by such Person, or (ii) any other Person which, at the time such
determination is being made, is Controlling, Controlled by or under common Control with, such Person. As used solely in this definition, the term “Control,” whether used as a noun or verb, refers to the possession, directly or
indirectly, of the power to direct, or cause the 

  

 -2- 

 
direction of, the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise. 
  
 1.3 “Agreement Term” shall mean the period of time
commencing on the date of execution of the Original D&L Agreement and extending on a country by country basis until the later of: (a) *****; and (b) such time as no Product is any longer being Developed or Commercialized hereunder by or for
Novartis (or a sublicensee of Novartis) except and unless the lack of any such activity constitutes a material breach hereunder. 
  
 1.4 “Applicable Territories” shall have the meaning set forth in Section 6.7(a), (b) or (c), as applicable. 
  
 1.5 “Approval” shall mean any approval, registration,
license or authorization from any Public Authority required for the manufacture, Development, Commercialization, storage or transport of a Product (or Potential Product or Abandoned Product, as the case may be) in any Regulatory Jurisdiction, and
shall include, without limitation, an approval, registration, license or authorization granted in connection with any Approval application, but shall not include any pricing approval. 
  
 1.6 “Antibody” shall mean any immunoglobulin protein (excluding immunoadhesins), and any fragment, less
than full-length antibody form (such as Fv, Fab, and F(ab’)2), single-chain antibodies, and antibody conjugate bound to a toxin, label or other moiety which, in each case, includes one or more CDRs and is capable of immunospecific binding to an
antigen, regardless of the method or means by which such immunoglobulin protein, fragment, less than full-length antibody form, single-chain antibody or antibody conjugate is produced. 
  
 1.7 “Capture Period” shall mean the period of time
commencing on the date of execution of the Original D&L Agreement and extending until *****. 
  
 1.8 “Commercialize” shall mean to promote, market, use for commercial purposes, import, export, distribute and sell or offer to sell
(including, without limitation, obtain pricing approvals), or to conduct any post-marketing clinical trial or Phase IV clinical trial (other than any post-marketing clinical trial or Phase IV clinical trial intended to support expanded labeling or
required to satisfy requirements of a Public Authority in connection with any Approval), or to the extent permitted under this Agreement, to have any of those things done, and “Commercialization” shall have a corresponding meaning.

  
 1.9 “Commercially Reasonable Efforts” shall
mean, as applied to a Party or Parties, those efforts and diligence (including the deployment of resources) that would be typically exercised by a company in the business of developing and selling biopharmaceutical products which is pursuing the
development, manufacture or commercialization of products similar or comparable to the Products *****.  
  
 1.10 “Control” or “Controlled” means owned or in-licensed from a Third Party or an Affiliate with the ability to grant
access to or a license or sublicense hereunder without violating the terms of any agreement or other arrangement with any Third Party. 
  

 -3- 

 1.11 “Co-Marketing” shall mean the separate Commercialization of Product(s) by each
Party in East Asia, in accordance with Section 8.2(a), under a separate trademark, chosen by each Party. 
  
 1.12 “Co-Promotion” shall mean the joint Commercialization of Product(s) in accordance with Sections 8.2(b) and 8.3(a)(i) and (b) by both
Parties under the same trademark. 
  
 1.13 “Co-Promotion
EA Territories” shall mean those countries in East Asia where Co-Marketing is prohibited but where Co-Promotion is permitted under applicable Legal Requirements. 
  
 1.14 “Develop” shall mean to develop, to use for development purposes, or to conduct clinical trials, in
each case in support of any Approval application, including without limitation, any post-marketing clinical trial or Phase IV clinical trial intended to support expanded labeling or to satisfy requirements of a Public Authority in connection with
any Approval, or to the extent permitted under this Agreement, have any of those things done, and “Development” and “Developing” shall have a corresponding meaning. 
  
 1.15 “Development Costs” shall mean an amount equal to:

  
 (a) ***** 
  
 *****. 
  
 1.16 “Dispute” shall mean any dispute, controversy or claim arising on or after the Effective Date out of
or in connection with this Agreement, or the Parties’ activities hereunder *****. 
  
 1.17 “East Asia” shall mean the territories of Taiwan, Hong Kong, Singapore, China, South Korea and (to the extent permitted by applicable law) North Korea. 
  
 1.18 “Effective Date” shall have the meaning set forth in
the introductory paragraph to this Agreement. 
  
 1.19
“Exclusive Rights” shall mean rights granted hereunder where the licensee has the right to exercise such rights to the exclusion of all others, including, without limitation, the licensor. 
  
 1.20 “Exclusive Territories” shall mean all countries of the
world except the Semi-exclusive Territories. 
  
 1.21
“Exclusively Licensed Tanox Patent” shall mean (a) each of the patents and patent applications listed on Exhibit A, as such Exhibit is amended from time to time pursuant to Section 2.2 of this Agreement, together with (b) any
patents issuing therefrom or claiming priority back thereto, including any foreign counterparts thereof, (c) any substitutions, continuations, continuations-in-part, divisions, reissues, re-examinations, renewals, or extensions of any of the
foregoing. 
  

 -4- 

 1.22 “Family of Antibodies” shall mean, with respect to any Product, the other
Antibodies *****; provided, however, that Family of Antibodies shall in any event exclude all Anti-IgE Antibodies and Anti-IgE Products (each as defined in the TCA),*****. 
  
 1.23 “Field” shall mean anti-IgE Antibody-based treatments
in humans for IgE-mediated reactions *****. 
  
 1.24
“Generated” shall mean: (i) in the case of subject matter and inventions claimed in patents and patent applications, invented; and (ii) in the case of know-how, developed or conceived. 
  
 1.25 *****  
  
 1.26 “Invented” shall mean invented in accordance with US
patent laws. 
  
 1.27 “Know-How” shall mean any
and all technical data, test results, techniques, specifications, designs, processes, information, materials, biological materials, such as plasmids, vectors, DNA sequences, organisms, cell lines, and antibodies, samples and other information
Controlled by Tanox or Novartis during the Agreement Term which (i) relate to Product(s) or Abandoned Product(s), including, without limitation, its chemical, biological, pharmacological, toxicological, nonclinical and clinical data, formulations,
specifications and/or usage, or (ii) relate to processes, techniques and specifications for the manufacture of Product(s) or Abandoned Product(s), including, without limitation, preparation, synthesis, culture, recovery and purification and quality
control processes, techniques and specifications. Know-How shall not encompass Patent Rights. 
  
 1.28 “Legal Requirements” shall mean all applicable laws, statutes, ordinances, codes, rules, regulations, published standards, permits, judgments, decrees, writs, injunctions, rulings, orders and
other requirements of any Public Authority. 
  
 1.29
“Major Country” shall mean and include the following countries:*****. 
  
 1.30 “Net Profits” and “Net Losses” with respect to a given territory shall be calculated as agreed by the Parties in the financial appendix to be agreed as set forth in Section
8.3(a), but in any event in a manner generally consistent with corresponding definitions pursuant to the Financial Appendices to the TCA and the Ancillary D&L Agreement except as otherwise expressly set forth herein and except as circumstances
may otherwise reasonably require. 
  
 1.31 “Net
Sales” shall mean the gross amount recorded by Novartis, its Affiliate(s) or sublicensees, in accordance with Generally Accepted Accounting Principles or International Accounting Standards, whichever is applied by Novartis, its Affiliates
or sublicensees in preparing financials statements for such jurisdiction (in each case, consistently applied) and Novartis then-standard and documented accounting practices, on sales (excluding distribution of samples) of Product(s) to Third Parties
less the sum of (A) and (B) with respect to a given time period for calculating Net Sales, where: 
  
 A. is a provision for such time period, reasonably determined by Novartis, its Affiliates and sublicensees for sales of Products under
Generally 

  

 -5- 

 
Accepted Accounting Principles or International Accounting Standards, whichever is applied by Novartis, its Affiliates or sublicensees in preparing
financials statements for such jurisdiction (in each case, consistently applied), which provision is reasonable and customary in the industry, for *****; and 
  

B. is a periodic adjustment of the provision determined in (A) (whether positive or negative) to reflect amounts actually incurred by
Novartis, its Affiliates and sublicensees, as the case may be, for items ***** in clause (A) as such items were reported in a given previous period (such adjustment to be made within ***** of when the applicable amounts were actually incurred).

  
 Deductions in the calculation of Net Sales shall not include
*****. 
  
 1.32 “Patent Rights” shall mean any
patent applications or patent(s) (including inventor’s certificates) throughout the world owned or Controlled by Tanox or Novartis during the Agreement Term the claims of which cover a Product or Abandoned Product (including, in each case, its
related Family of Antibodies and Novartis derivatives thereof, if any) or its manufacture, use, or sale, including any substitutions, supplemental patent certificates, continuations, continuations-in-part, divisions, reissues, re-examinations,
renewals, or extensions of the terms thereof. 
  
 1.33
“Person” shall mean an individual, corporation, partnership, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of
entity not specifically listed herein. 
  
 1.34 *****. 

 
 1.35 “Potential Product(s)” shall mean (a) any Antibodies
***** Invented and synthesized by Tanox during the Capture Period or Invented and synthesized by a Third Party during the Capture Period and Controlled by Tanox, together with all Antibodies within the same Family of Antibodies as any such
Antibodies and (b) any human pharmaceutical formulation containing or comprising such an Antibody described in (a), either alone or in combination with other active or inactive ingredients, components or materials (which such ingredients, components
and materials are not IgE inhibiting Antibodies) in the same formulation as such Antibody; provided, however, that Potential Products shall in any event exclude all Anti-IgE Antibodies and Anti-IgE Products (each as defined in the TCA)
and any Abandoned Products.***** 
  
 1.36 “Potential
Product Report” shall have the meaning given thereto in Section 2.1. 
  
 1.37 “Product(s)” shall mean: (a) such Potential Products as are added to Exhibit B after the date hereof pursuant to Section 2.1; (b) any Antibody within the same Family of Antibodies as such
Potential Products; and (c) any Antibody which is Invented and synthesized by Novartis and either ***** provided, however, that Products shall in any event exclude all Anti-IgE Antibodies and Anti-IgE Products (each as defined in the
TCA).  
  

 -6- 

 1.38 “Public Authority” shall mean any supranational, national, regional, state or local
government, court, governmental agency, authority, board, bureau, instrumentality or regulatory body. 
  
 1.39 “Regulatory Jurisdiction” shall mean any jurisdiction in which Approval for manufacturing, Developing or Commercializing a Product
is required. 
  
 1.40 “Required Third Party
Rights” shall mean such Third Party intellectual property rights as are necessary for, or material to, the Development, manufacture or Commercialization of any Product pursuant to this Agreement. 
  
 1.41 “Royalty Period” shall mean the period of time
commencing on the date of execution of the Original D&L Agreement and extending on a country-by-country basis and Product-by-Product basis (with “Product-by-Product” measured by reference to whether separate Approvals are required for
the Products to be compared) until the later of (a) the last to expire of a Valid Claim of an Exclusively Licensed Tanox Patent Controlled by Tanox which would be infringed by the import, manufacture, use or sale of the applicable Product actually
manufactured or Commercialized in such country and (b) the expiry of ***** from the day of the first commercial sale of the applicable Product actually manufactured or Commercialized in the applicable country. 
  
 1.42 “Semi-Exclusive Rights” shall mean rights granted
hereunder where the licensee has the right to exercise such rights to the exclusion of all others but shall not have the right to exclude the licensor (or its sublicensees as permitted hereunder). 
  
 1.43 “Semi-exclusive Territories” shall mean the U.S.A. and
East Asia. 
  
 1.44 “Settlement and Cross-License
Agreement” shall mean the Settlement and Cross-License Agreement between Genentech and Tanox amended and restated as of the Effective Date hereof. 
  
 1.45 “Third Party(ies)” shall mean any Person other than a Party to this Agreement or its Affiliate(s). 
  
 1.46 “United States” or “U.S.A.” shall mean
the United States of America, its territories and possessions. 
  
 1.47 “Valid Claim” shall mean a then-existing claim of an issued and unexpired Patent Right that has not been held invalid, unpatentable or unenforceable by a decision of a governmental body or court of competent
jurisdiction, that is unappealable or unappealed within the time allowed for appeal, and that has not been rendered unenforceable through disclaimer or otherwise. 
  
 1.48 Other commonly used terms or abbreviations, such as Food and Drug Administration (“FDA”), Phase I
Phase II, Phase III, Investigational New Drug Application (“IND”), Biologics License Application (“BLA”) and Establishment License Application (“ELA”), shall mean or have the meanings indicated in
the United States Food, Drug and Cosmetic Act and applicable regulations promulgated thereunder, and all such terms or 

  

 -7- 

 
abbreviations shall apply equally, as applicable, to any counterpart or equivalent agencies or activities in countries outside the U.S.A. 
  

	 	2.	Scope of Agreement and Independent Development. 

  
 2.1 Identification of Products Covered by This Agreement. Prior to initiating human clinical trials of any Potential Product during the term of
this Agreement, Tanox shall disclose such Potential Product to Novartis under a Potential Product Report and make such Potential Product available to Novartis for Development and Commercialization hereunder, all in accordance with the provisions of
this Section 2.1 and other applicable terms and conditions of this Agreement. Tanox shall provide written notice to Novartis not less than ***** prior to the delivery of each Potential Product Report. ***** If Novartis desires to pursue the
Development and Commercialization of such Potential Product on the terms and conditions set forth in this Agreement, it must notify Tanox in writing within *****of receipt of the complete Potential Product Report, in which case such Potential
Product shall be added to Exhibit B and deemed to be a Product (and no longer a Potential Product) subject to this Agreement. ***** 
  
 2.2 Addition of Exclusively Licensed Patents. If Novartis elects to pursue the Development and Commercialization of a Potential Product in
accordance with the foregoing, any Patent Rights covering such Potential Product (or its import, manufacture, use or sale) which are listed by Tanox in the respective Potential Product Report shall thereupon automatically be added to Exhibit A and
become Exclusively Licensed Tanox Patents. Furthermore, in the event Novartis desires to add to Exhibit A (and thus to become Exclusively Licensed Tanox Patents) other Patent Rights not yet within the Exclusively Licensed Tanox Patents which are
Controlled by Tanox, Novartis may do so by providing written notice thereof to Tanox, subject to any licenses Tanox may have granted to Third Parties in the interim. Upon the giving of such notice, the applicable Patent Rights shall thereupon become
Exclusively Licensed Tanox Patents (but the license thereto shall still be subject to any licenses Tanox may have granted to Third Parties in the interim, or any licenses Tanox may grant outside the Field at any time). 
  
 2.3 Tanox’s Right of Independent Development. 
  
 (a) In the event that Novartis does not notify Tanox that it
desires to pursue Development and Commercialization of any Potential Product within the ***** period referred to in Section 2.1, Tanox will have the right to pursue Development and Commercialization of such Potential Product (including the related
Family of Antibodies) on its own and without any further obligation to or by Novartis; subject, however, to the right of first refusal of Novartis to license such Potential Product(s) as provided under Section 12 of this Agreement in
the event Tanox elects to out-license any of its rights to such Potential Product(s). Novartis shall not use for any purpose any proprietary or confidential information, data or know how set forth in, or provided by Tanox in connection with, any
Potential Product Report with respect to a Potential Product which Novartis declines to pursue under Section 2.1 hereunder, and, unless the Parties agree otherwise, shall return to Tanox all copies of such Potential Product Report and certify to
Tanox the destruction of all reports generated by Novartis which incorporate any information included in such Potential Product, except, in each case for one copy of each such report which shall be maintained by Novartis in its legal files (to be
used solely for purposes of confirming compliance by the Parties with the terms and conditions of this 

  

 -8- 

 
Agreement). The information, data and know how included in any Potential Product Report with respect to a Potential Product which Novartis declines to pursue
under Section 2.1 hereunder shall otherwise be subject to the nondisclosure provisions of Section 11, subject, however, to the provisions of Section 3.1(b). For the avoidance of doubt, no right or license is provided hereunder from
Tanox to Novartis for Novartis to use, modify or make Potential Products that do not become Products hereunder. 
  
 (b) Notwithstanding any other provision of this Section 2.3, in no event shall Tanox’s right of independent Development and
Commercialization apply to any Antibody which is within the same Family of Antibodies as any Product (excluding, for the avoidance of doubt, any Product that becomes an Abandoned Product). 
  
 (c) *****. 
  

	 	3.	Grant of Licenses; Sublicense Rights; Representations. 

  
 3.1 Licenses to Novartis. 
  
 (a) Subject to the other provisions of this Agreement, Tanox grants to Novartis a world-wide license under its Know-How and Patent Rights,
with the right to grant sublicenses, to make, have made, import, use, sell and offer to sell the Product(s) for use in the Field during the Agreement Term. Said license shall grant Exclusive Rights with respect to Exclusively Licensed Tanox Patents
in the Exclusive Territories and shall grant Semi-exclusive Rights with respect to Exclusively Licensed Tanox Patents in the Semi-exclusive Territories, and in each case, such exclusivity will extend to all Antibodies within the definition of the
applicable Product. Except as otherwise set forth in the preceding sentence, the license grant in this Section 3.1 shall be non-exclusive. For the avoidance of doubt, subject to and except as provided for in any agreements with Third Parties in
existence as of the Effective Date, Tanox shall not grant to any Third Parties any rights in the Field under any Exclusively Licensed Tanox Patent, other than with respect to: (i) any Potential Product which is not accepted by Novartis for
Development and Commercialization hereunder; and (ii) any Product which becomes an Abandoned Product. ***** 
  
 (b) *****. 
  
 3.2 Licenses to Tanox. 
  
 (a) Subject to the other provisions of this Agreement, Novartis grants to Tanox a license under its Know-How and Patent Rights, with the
right to grant sublicenses to Affiliates of Tanox (and to Third Parties in East Asia to the extent contemplated in any plan developed by the Project Steering Committee or Working Group hereunder), to make, have made, import, use, sell and offer to
sell the Product(s) for use in the Field during the Agreement Term. Said license shall be limited to the Semi-exclusive Territories, shall grant Semi-exclusive Rights in said Semi-exclusive Territories. Notwithstanding the foregoing, Tanox’s
rights under the foregoing licenses shall be limited to: (i) Development activities to be conducted by Tanox as agreed by the PSC (or the Parties) hereunder; (ii) the manufacture of preclinical, Phase I and Phase II(a) requirements of Products, and
in the event that Novartis elects under Section 7.4(a) to have Tanox manufacture one or more Products, then also to the manufacture of Phase II(b), 

  

 -9- 

 
Phase III and commercial requirements for such Products; (iii) Commercialization activities in East Asia only to the extent that Tanox is Co-Marketing or
Co-Promoting a Product as set forth in Sections 8.2(a) and (b) respectively; and (iv) Commercialization activities in the USA only to the extent Tanox elects to actively participate in the Co-Promotion of the applicable Product as set forth in
Section 8.3(a)(i) and (b). 
  
 (b) *****

  
 (c) Subject to the other provisions of this
Agreement, Novartis grants to Tanox a license under its Know-How and Patent Rights, with the right to grant sublicenses, to make, have made, import, use, sell and offer to sell Abandoned Product(s). The foregoing license shall grant Exclusive Rights
for a given Abandoned Product in the Applicable Territories for such Abandoned Product and no rights outside the Applicable Territories for such Abandoned Product; provided however, where the Abandoned Product is no longer being
Developed or Commercialized by Novartis in any country, the Novartis Patent Rights included in the foregoing license shall be limited to those that cover the Abandoned Product in the form that existed or was contemplated to exist at the time of
abandonment. 
  
 3.3 Sublicense Agreements. All permitted
sublicenses hereunder shall be subject to the applicable terms and conditions of this Agreement and shall be made pursuant to written sublicense agreements that protect the rights of the licensor hereunder to at least the same extent as protected in
this Agreement. ***** 
  
 3.4 Third Party Participation.

  
 (a) Novartis shall warrant the performance of
any and all rights and obligations of this Agreement by its Affiliate(s) and/or sublicensees. Tanox shall warrant the performance of any and all rights and obligations of this Agreement by its Affiliate(s) and/or any sublicensee permitted pursuant
to Section 3.2(c) above. 
  
 (b) Tanox agrees, if
Novartis so requests, to enter into a separate agreement with any Affiliate(s) of Novartis granting a license in accordance with the provisions of this Agreement. Such agreement shall incorporate all of the terms of this Agreement to the extent that
they are applicable. Novartis shall guarantee the performance of any and all responsibilities of the Affiliate(s) under such separate agreement. 
  

(c) Additionally, the Parties may by mutual written consent, license rights granted or retained under this Agreement to a Third Party
to manufacture the commercial supply of Product(s) for itself and/or the other Party.  
  
 3.5 Certain Representations. Each Party represents and warrants to the other that it is the owner of, or has exclusive rights to Commercialize,
with the right to grant the licenses granted by it hereunder to its respective Patent Right(s) and Know-How and has not assigned, conveyed or otherwise encumbered by any agreement, either oral or written, any right, title or interest in and to the
respective Patent Rights and Know-How which would be inconsistent with the rights granted hereunder, except as set forth in the TCA and in the JCA (as it existed prior to the date hereof). Each Party warrants that it is free to enter into this
Agreement and is free to carry out all of its obligations under this Agreement. Tanox represents and 

  

 -10- 

 
warrants that, as of the Effective Date, Tanox has not entered into any agreements to license any Exclusively Licensed Tanox Patents within the Field except
pursuant to the TCA and pursuant to the “Ancillary Agreements” and “Related Agreements” as such terms are defined in the TCA. 
  
 3.6 Disclaimers. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE PARTIES MAKE NO, AND HEREBY DISCLAIM ALL, OTHER REPRESENTATIONS AND
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 
  

	 	4.	Project Steering Committee / Working Groups 

  
 4.1 Oversight of Development and Commercialization. Subject to the express provisions of this Agreement and Section 4.4 below, the Parties’
manufacture, Development and Commercialization (other than Co-Marketing (if any)) of Products and their cooperation with respect thereto will be subject to the governance, approval, direction and oversight of the committees and working groups
described in this Article 4. ***** For the avoidance of doubt, in the event that the Parties Co-Market any Product in any of the Semi-exclusive Territories, the provisions of this Section 4 shall not apply with respect to the Co-Marketing of such
Product in such country, other than with respect to the conduct of Phase IV clinical trials. 
  
 4.2 Project Steering Committee. 
  
 (a) The Parties’ cooperation hereunder shall be overseen by a Project Steering Committee which shall be formed as soon as reasonably practicable upon acceptance of the first Potential Product (if any) by Novartis
pursuant to Section 2.1 and to which each Party shall be entitled to appoint up to *****representatives. A member of the Project Steering Committee appointed by Novartis shall assume the chairmanship of this Project Steering Committee. *****
Notwithstanding the foregoing but without limiting any obligations expressly provided for in this Agreement, no action may be taken by the Project Steering Committee to impose or increase upon either Party financial or any other obligations not
expressly contained in this Agreement except with the prior written consent of such Party. 
  
 (b) The Project Steering Committee shall: 
  
 (i) agree from time to time on the Development and detailed working program (including timetable) to be carried out and the budgets
thereto, whereby the Project Steering Committee shall set up the priorities and determine various tasks of each Party as hereinafter described; 
  
 (ii) coordinate and monitor the progress of such Development work; 
  
 (iii) provide for a free exchange of any relevant information and results relating to the Development work
under this Agreement, in each case (i), (ii) and (iii) subject to the terms of this Agreement; and 
  
 (iv) facilitate the implementation of Commercialization (other than Co-Marketing) of Products in accordance with this Agreement and
approve any Phase IV  

  

 -11- 

 
clinical trials proposed to be conducted in any country in which the Parties are Co-Marketing the applicable Product. 
  
 (c) As necessary or required, the Project Steering Committee
shall hold meetings at intervals and locations to be mutually agreed upon, but at least once a year following its formation. Meetings of the PSC may be held in person or in reasonable manner including, without limitation, by telephone or video
conference. The results of such meetings shall be recorded in writing. The minutes shall be approved and signed by or on behalf of both Parties. The minutes to the meetings shall be marked as “Confidential” and shall be subject to the
secrecy obligations and restrictions on use as per Section 11 hereinafter. 
  
 4.3 Working Groups. 
  
 (a) Upon its formation, the PSC shall establish Working Groups which shall be responsible for proposing a detailed development plan (setting forth the different steps and time frames, as well as the budget for the
Parties’ respective activities for the Development of Products) to the Project Steering Committee. After approval of the development plan by the Project Steering Committee, which must occur in a timely way so as not to impede the progress of
the Working Groups, the Working Groups shall coordinate and implement all day-to-day activities of the Parties, respectively, under this Agreement. The Working Groups shall work openly and cooperatively and shall meet periodically as the Parties
reasonably determine may be necessary, to coordinate research, preclinical and clinical development, process development and production, and other activities conducted by the Parties according to the objectives and priorities of the cooperation
under this Agreement. The results of such meetings shall be recorded in writing. The minutes shall be approved and signed by both Parties’ project leaders. The minutes shall be marked as “Confidential” and shall be subject to the
secrecy obligations and restrictions on use as per Section 11 hereinafter. 
  
 (b) The Working Groups shall include those of its employees that each Party reasonably determines to be necessary or appropriate (such employees may participate in more than one Working Group which, unless requested
by a Party, need not include an equal number of each Party’s expert employees). Decisions of the Working Groups shall be by mutual agreement of the Parties, with any disputes to be resolved by the Project Steering Committee. 
  
 (c) The Working Groups shall initially include the following
and such other Working Groups as may be agreed from time to time by the Project Steering Committee: 
  
 (i) Clinical Development Group - The Clinical Development Group shall be responsible for proposing the clinical development plans for any
Products, including IND-enabling toxicology studies, to the Project Steering Committee, supervising all clinical activities with respect to any Products, and coordinating and implementing the clinical trials and regulatory submissions in connection
with those various clinical trial activities. The Clinical Development Group shall report to the Project Steering Committee from time to time the results of Development activities for review and for decisions on subsequent activities. 
  

 -12- 

 (ii) Process Development and Production (PDP) Group—The PDP Group shall be
responsible, as necessary from time to time, for proposing the process development and production activities with respect to any Products to the Project Steering Committee supervising such activities, and coordinating and implementing initial,
adaption and scale-up activities. The PDP Group also shall support with its activities the clinical development process for any Products. The PDP Group shall report to the Project Steering Committee from time to time the results of the work
performed for decisions on subsequent activities. 
  
 4.4 Other
Committees. As Products proceed through Development and Commercialization, the Parties agree to expand the functions and responsibilities of the PSC and Working Groups by amendment in writing the governance mechanisms provided herein as may be
reasonably necessary to facilitate such Development and Commercialization of Products, including without limitation, creation of new Working Groups. 
  

	 	5.	Exchange of Information. 

  
 5.1 Exchange. Subject to the confidentiality provisions of Section 11, Tanox and Novartis shall each share with the other such of their Know-How as
may be reasonably required for the performance of the other’s obligations or the exercise of the other’s rights hereunder. If necessary, each Party also shall provide such information to the other, to the extent reasonable, in suitable
form for regulatory approval and registration purposes. Tanox shall not be obligated to share or provide any of the foregoing with respect to Abandoned Products where the Applicable Territory for such Abandoned Product is worldwide. Subject to
Sections 3.1(b) and 3.2(b), Know-How that is subject to the confidentiality obligations of Section 11 received by each Party from the other shall only be used for the Development, manufacture and Commercialization of Product(s) or Abandoned Products
(with respect to Tanox, as applicable), except with the express written consent of the other Party. 
  
 5.2 Role of Committees. The Project Steering Committee and Working Groups, as described in Section 4, shall be responsible for the exchange of
Know-How between Tanox and Novartis. 
  
 5.3 Patent
Matters. 
  
 (a) Each Party shall be deemed
for the purposes of this Agreement to solely own all intellectual property (other than trademarks and domain names, but including, without limitation, patents, patent applications, extensions, supplementary patent certificates, reissues, renewals,
divisions, continuations or continuations-in-part, proprietary information, trade secrets (including, without limitation, customer lists and marketing and sales information), and inventions) which is Generated by that Party (on its own and/or with
its Affiliates and/or with the other Party and/or with a Third Party ) (with such Party being the “Developing Party”) relating to the manufacture, development, use, marketing, promotion or sale of any Product ***** 
  
 (b) All intellectual property (other than trademarks and
domain names, but including, without limitation, patents, patent applications, extensions, supplementary patent 

  

 -13- 

 
certificates, reissues, renewals, divisions, continuations or continuations-in-part, proprietary information, trade secrets (including, without limitation,
customer lists and marketing and sales information), and inventions) Generated jointly by the Parties hereunder (i.e., an invention in which one or more inventors from each Party, including individuals obliged to assign or transfer an
invention to a Party, have made an inventive contribution as determined by United States patent Legal Requirements) under this Agreement or the Original D&L Agreement *****, and any patent applications and patents thereon, shall be jointly owned
by the Parties. 
  
 (c) Each Party will obtain
***** its Patent Right(s) covering the Product(s) in each country in which such Party believes patent protection to be appropriate. Not later than ***** before the expiration date of the priority year of the filing of any foreign patent
applications, the Party holding the patent application shall advise the other Party as to those countries where it does not intend to timely file for patent protection and will offer at the same time in writing to file in the remaining countries
suggested by the other Party corresponding patent applications within such applicable priority year on such other Party’s behalf and cost. ***** The Parties will communicate to each other, not later than ***** after the filing thereof, the text
of any priority patent applications covering subject matter Invented hereunder which are filed or notice of intention to abandon any such application so as to permit the other Party to assume prosecution of same *****. 
  

	 	6.	Development and Regulatory Activities. 

  
 6.1 Development of Products Generally. Novartis shall use Commercially Reasonable Efforts to Develop Products worldwide and Tanox shall use
Commercially Reasonable Efforts to Develop Products in East Asia; provided, however, that notwithstanding the definition of “Products” hereunder (but without limiting the generality of the foregoing obligation) ***** Subject
to the express provisions of this Agreement, all decisions with respect to the selection of Products and respective indications for Development and Commercialization worldwide shall be made through the Project Steering Committee (the
“PSC”) and/or other applicable committees as described in Article 4 of this Agreement *****. Without limiting the foregoing, Novartis shall consult with Tanox, through the PSC and applicable Working Group(s) regarding its plans for,
and activities with respect to, the Development of Products in the U.S.A. and shall advise Tanox, through the applicable Working Group(s) regarding its plans for, and activities with respect to, the Development of Products in the Exclusive
Territories. 
  
 6.2 Development Activities in East Asia.

  
 (a) Tanox shall have the primary
responsibility for, and shall use Commercially Reasonable Efforts in, planning and conducting, in consultation with Novartis, such Development activities in countries in East Asia relating to Products as are agreed by the Project Steering Committee,
at the direction of and under the oversight of the Clinical Development Group and in accordance with applicable work program, if any. Novartis shall assist and conduct such additional Development activities for countries in East Asia relating to
Products as are agreed by the Project Steering Committee, at the direction of and under the oversight of the Clinical Development Group and in accordance with applicable work program, if any. Subject to the foregoing, each Party’s
responsibilities with respect to such Development in countries in East Asia, and any work programs relating thereto, will be determined by the 

  

 -14- 

 
Project Steering Committee. Development activities in East Asia shall be subject to review and approval by the Project Steering Committee as set forth in
Article 4 above, and protocols for clinical trials and other studies with respect to any Product in East Asia shall be subject to review and approval by the Clinical Development Group and the Project Steering Committee. 
  
 (b) Subject to the terms of this Agreement, Novartis shall
be the official holder of the Approvals for Products in Co-Promotion EA Territories and will have primary responsibility for, and shall use Commercially Reasonable Efforts in, planning and conducting, with input from and in consultation with Tanox,
all post-marketing clinical trials or Phase IV clinical trials intended to support expanded labeling or required to satisfy requirements imposed by a Public Authority in connection with any Approval of Products in Co-Promotion EA Territories. The
Project Steering Committee shall decide which Party (or in the case of Novartis, its Affiliate designee) has primary responsibility for planning and conducting Phase IV clinical trials (other than any post-marketing clinical trial or Phase IV
clinical trial intended to support expanded labeling or required to satisfy requirements imposed by a Public Authority in connection with any Approval). The Project Steering Committee will determine which of Novartis (or its Affiliate designee) or
Tanox shall have the primary responsibility for planning and conducting all other clinical trials of Products in Co-Promotion EA Territories. 
  
 (c) For Co-Marketing EA Territories, subject to Section 6.2(a) above, the Parties shall reasonably agree upon a fair and appropriate
arrangement for Development of the applicable Products and for obtaining necessary Approvals with respect thereto, based on the model of an arms length arrangement between two parties separately bringing to market the same product in the same
country under separate trademarks, but in any event with the goal of finding the fastest and most efficient manner of obtaining Approval for such Product and of facilitating global coordination for worldwide Development of such Product. 

 
 (d) Tanox and Novartis shall *****, and the Parties shall
reasonably agree on an appropriate process for reimbursement, as applicable, of such costs. 
  
 6.3 Development Activities in the U.S.A. 
  
 (a) Novartis shall be responsible for, and shall use Commercially Reasonable Efforts in, planning and conducting such Development
activities for the U.S.A. relating to Products as are agreed by the Project Steering Committee, at the direction of and under the oversight of the Clinical Development Group and in accordance with applicable work programs, if any. Development
activities in the U.S.A. shall be subject to review and approval by the Project Steering Committee as set forth in Article 4 above, and protocols for clinical trials and other studies with respect to any Product in the U.S.A. shall be subject to
review and approval by the Clinical Development Group and the Project Steering Committee. 
  
 (b) Subject to the terms of this Agreement, Novartis, as official holder of the Approvals for Products in the U.S.A., will have primary
responsibility for, and shall use Commercially Reasonable Efforts in, planning and conducting, with input from and in consultation with Tanox, all post-marketing clinical trials or Phase IV clinical trials intended to support expanded labeling or
required to satisfy requirements imposed by a Public Authority in connection with any Approval of Products in the U.S.A. The Project Steering Committee shall  

  

 -15- 

 
decide which Party (or in the case of Novartis, its Affiliate designee) has primary responsibility for planning and conducting all other clinical trials of
Products in the U.S.A. 
  
 (c) *****.

  
 6.4 Development Activities in Exclusive Territories.
Novartis shall be responsible for, and shall use Commercially Reasonable Efforts in, planning and conducting all Development activities relating to Products in the Exclusive Territories; provided, however, that Novartis shall advise
Tanox, through the Development Working Group, regarding its plans for, and activities with respect to, the Development of Products in the Exclusive Territories. All Development Costs incurred by Novartis in Developing Products for the Exclusive
Territories will be borne*****. 
  
 6.5 Sharing of Development
Results. Each Party shall share with the other through the PSC or appropriate Working Group, the results of Development activities with respect to Products undertaken by such Party as contemplated by this Agreement. 
  
 6.6 Regulatory Activities.  
  
 (a) With respect to regulatory activities in all countries
that are not Co-Marketing EA Territories: 
  
 (i)
Novartis shall use Commercially Reasonable Efforts to apply for, obtain and maintain any Approvals and any other licenses, permits, approvals or registrations as may be required by the FDA or any other relevant Public Authority for Commercializing
Products in the United States and in such other countries in the world as Commercially Reasonable Efforts would require; 
  
 (ii) Both Parties will have full access to all submissions to, including clinical studies and other supporting information, and
communications with, the FDA and foreign counterparts thereof relating to the Product(s), and each Party, or its Affiliate(s) (or in the case of Novartis and at its discretion, sublicensees), shall have the irrevocable right to refer to and
cross-reference in accordance with applicable Legal Requirements all such documents for purposes of obtaining an Approval for a Product in a Co-Marketing EA Country (to the extent Tanox is applying for an Approval for such Product in accordance with
Sections 6.2(c) and 6.6(b)) or an Abandoned Product; 
  
 (iii) Except as otherwise agreed by the Project Steering Committee or as required by Legal Requirements, Novartis shall comply with all regulatory requirements, and shall maintain all government agency contacts, relating to the Products;
such activities shall include maintaining and updating any Approvals, the development and submission of Approval Applications for new indications (if any, and after approval by the Project Steering Committee), the reporting of any adverse incidents
or drug reactions to the FDA or other Public Authority, and the filing with the FDA or other Public Authority of any promotional and other materials as may be necessary to comply with Legal Requirements; 
  

 -16- 

 (iv) Tanox shall cooperate with Novartis to obtain and maintain the effectiveness of any
Approvals and any licenses, permits, approvals or registrations obtained in connection with the performance of this Agreement, including by providing materials, information and necessary personnel in connection with regulatory approval functions;
and 
  
 (v) Subject to Sections 6.2(c) and
6.6(b)with respect to Co-Marketing (if any) in East Asia, Novartis will hold all Approvals for Products, subject to: (A) providing Tanox, promptly on Novartis’ receipt thereof, with copies of all material Products licensing/regulatory affairs
correspondence and materials with respect to Approval activities in the USA or the Co-Promotion EA Territories; (B) promptly notifying Tanox of any meetings or material communications between Novartis and the FDA or other regulatory agency in the
Co-Promotion EA Territories; (C) the right of Tanox to attend and participate in such meetings and to review, comment upon and approve all such written material communications including, without limitation, draft documents, meeting materials,
letters and submissions to the FDA. 
  
 (b) With
respect to regulatory activities in all Co-Marketing EA Territories, the Parties will operate in accordance with the arrangement agreed upon under Section 6.2(c). 
  
 (c) Novartis and Tanox shall timely advise each other of (i) all adverse drug reactions and other similar
matters relevant to maintaining approvals and registrations of the Product(s) of which either of them may be aware and (ii) any governmental regulatory problems, notices, actions or material communications relating to the Product(s). 
  
 6.7 Safety and Reporting. Prior to the commencement of clinical
development of any Product hereunder, the Parties shall establish and implement a procedure for the mutual exchange of adverse event reports and safety information associated with Products. Details of the operating procedure shall be the subject of
a Safety Addendum (“Safety Addendum”) to this Agreement, to be agreed between the designated pharmacovigilance primary liaisons of the Parties. The Safety Addendum shall be agreed in writing and implemented at a time sufficient to
permit compliance with Legal Requirements. The Safety Addendum may be updated by the Parties in writing from time to time and expanded as needed to permit compliance with new Legal Requirements. Notwithstanding the foregoing, during the Term of this
Agreement, each Party shall notify the other and the PSC immediately of any information received by it regarding any threatened or pending action by the FDA or any Public Authority which may affect the safety, efficacy or other labeling claims of
any Product. Upon receipt of any such information, the Parties shall discuss such information and possible actions with respect thereto, and the PSC shall determine a procedure for taking appropriate action. Each Party shall provide to the other
copies of any periodical safety update reports issued by such Party with respect to any Product. Notwithstanding the foregoing, nothing contained herein shall be construed as restricting any Party’s right to make a timely report of such matter
to the FDA or any other Public Authority or take other action that it deems to be appropriate with respect to such matter or required by Legal Requirements with respect to such matter. 
  
 6.8 *****. 
  

 -17- 

 6.9 Abandonment of Products by Novartis.  
  
 (a) Novartis may voluntarily abandon its right and
obligation hereunder to Develop and Commercialize a given Product (including its related Family of Antibodies and Novartis derivatives thereof), upon written notice to Tanox, at any time prior to submission of the first BLA (or foreign equivalent)
for such Product(s) to the FDA (or foreign equivalent) in the first Major Country. Between the time of submission and the time of approval of said BLA, Novartis may voluntarily abandon its right and obligation hereunder to Commercialize such
Product(s), upon written notice to Tanox, solely for the reasons set forth in Section 13.2(a)(ii) as grounds for a termination. In the event of any voluntary abandonment under this Section 6.9(a) the applicable Product (including its related Family
of Antibodies and Novartis derivatives thereof) shall become, upon the giving of notice by Novartis, an Abandoned Product hereunder and the “Applicable Territory” for such Abandoned Product shall be worldwide.

  
 (b) The Parties acknowledge and agree that,
in Developing and Commercializing a particular Product on a worldwide basis, Commercially Reasonable Efforts may not require the Development and Commercialization of such Product in all countries. In the event Commercially Reasonable Efforts would
require Novartis to Develop and Commercialize a Product in a particular country, Novartis may voluntarily abandon its right and obligation hereunder to Develop and Commercialize such Product (including its related Family of Antibodies and Novartis
derivatives thereof) in such country subject to and only in accordance with the following provisions. If Novartis elects not to pursue Development and Commercialization of a Product in a given country, whether or not Commercially Reasonable Efforts
so require, Novartis shall provide written notice to Tanox, within ***** after the filing any Approval application in the first of the U.S.A. or in any Major Country with respect to abandonment in any Major Country, and within ***** after the filing
any Approval application in the first of the U.S.A. or in any Major Country with respect to abandonment in any country other than a Major Country (the end of such period being the “Opt Out Date”), indicating (i) the country(ies) in
which Development and Commercialization will not be pursued, (ii) the reasons for not pursuing Development and Commercialization in such jurisdiction(s), including without limitation, whether Novartis asserts that Commercially Reasonable Efforts
does or does not require pursuit of such Product in such country, and (iii) any material facts and analyses upon which Novartis based its decision. 
  
 Without limiting Novartis’ obligation to exercise Commercially Reasonable Efforts hereunder, if, as a result of comments or discussions with
the regulatory agencies regarding an Approval application for such Product in the U.S.A. or other Major Country (as the case may be): (i) a further or revised Approval application must be filed or (ii) the expected indications for which Approval may
be secured for the Product in any country is significantly more limited than anticipated as of the applicable Opt-Out Date, or if the cost of Development, due to additional required trials, is significantly more than anticipated as of the applicable
Opt-Out Date, Novartis may extend such Opt-Out Date for the applicable Product to the date that is ***** after the first Approval in the U.S.A. or Major Country with respect to abandonment in a Major Country and ***** after the first Approval in the
U.S.A. or Major Country with respect to abandonment in a country other than a Major Country. In such event, at any time prior to such extended Opt-Out Date; but as soon as Novartis has made a decision (if any) to abandon a 

  

 -18- 

 
particular country, Novartis may, by notice in writing to Tanox, amend its notice issued pursuant to the preceding paragraph. 
  
 Within ***** of Tanox’s receipt of any timely notice in which Novartis
asserts that failure to Develop or Commercialize a Product in a particular jurisdiction(s) is consistent with Commercially Reasonable Efforts (and therefore abandonment hereunder has not occurred), Tanox shall advise Novartis whether Tanox agrees
with Novartis’ assertion. If Tanox disagrees, either Party shall be free to initiate the Dispute Resolution procedures set forth in Section 14.5 with respect to such matter. Novartis may not abandon a Product in a given jurisdiction under this
Section 6.9(b) unless it gives timely notice thereof in accordance with the foregoing. Any Product that Novartis abandons in a given country(ies) under this Section 6.9(b), which abandonment is not consistent with Commercially Reasonable Efforts,
shall become, upon the giving of notice by Novartis or, in the event that the Parties disagree, relevant determination by the arbitrators, an Abandoned Product hereunder, and the “Applicable Territory” for such Abandoned Product
shall be all the country(ies) where abandonment is designated in such notice. 
  
 (c) If at any time Novartis fails to use Commercially Reasonable Efforts to Develop and Commercialize at least one Antibody in each Family of Antibodies in a particular country, Tanox may issue notice to Novartis
identifying such Product, the country in which it is alleged that the has been a failure to use Commercially Reasonable Efforts and the grounds for such assertion. In the event that Novartis disputes Tanox’s assertion of a failure to use
Commercially Reasonable Efforts, the dispute shall be subject to the provisions of Section 14.5. If any such failure to use Commercially Reasonable Efforts is not remedied within ***** (provided that Novartis has initiated reasonable efforts
to cure such breach within*****) from the date of written notice from Tanox identifying such failure (or, in the event that Novartis disputes Tanox’s assertion of a failure to use Commercially Reasonable Efforts, within the reasonable period
*****, if any, permitted by the arbitration panel for such cure following resolution of the dispute in accordance with Section 14.5), Novartis shall be deemed to have abandoned its rights hereunder to Develop and Commercialize such Product(s) in
such country. Such Product shall become, upon expiration of the ***** cure period without the failure being remedied, an Abandoned Product hereunder and the “Applicable Territory” for such Abandoned Product shall be all the
country(ies) where the Commercially Reasonable Efforts obligation has not been fulfilled. The foregoing does not limit any rights or remedies of Tanox with respect to any breach by Novartis of this Agreement. 
  
 (d) Upon the abandonment or deemed abandonment by Novartis
of a Product in one or more jurisdictions as provided in clauses (a) through (c) above, Tanox will have the right (but not the obligation) to pursue Development and Commercialization of such Abandoned Product (including its related Family of
Antibodies and Novartis derivatives thereof) in the Applicable Territory at Tanox’s sole expense, either directly or through one or more sublicensees as more fully provided in Section 8.5 hereof. In the event that the Applicable Territory for
the Abandoned Product is worldwide and Tanox chooses to continue Development and Commercialization of such Abandoned Product, the provisions of Sections 6.9(e) and 13.3(d) shall apply with respect to such Abandoned Product. In the event that the
Applicable Territory for such Abandoned Product is not worldwide and Tanox chooses to continue Development and Commercialization of such Abandoned Product, the provisions of Sections 6.7(f) and 13.3(d) (in so far as relates to such Applicable
Territory only) shall apply, and if 

  

 -19- 

 
Novartis is manufacturing and supplying the Abandoned Product for countries outside the Applicable Territory pursuant to Section 7.5(b), it shall supply such
Abandoned Product to Tanox for sale by Tanox in the Applicable Territory at *****. In any event, Novartis shall provide all cooperation and assistance reasonably requested by Tanox to enable Tanox (or its designee) to assume with as little
disruption as reasonably possible, the continued manufacture (if applicable), Development and Commercialization of the Abandoned Products in the Applicable Territories then being Commercialized or Developed hereunder at the time of abandonment (the
“Active Products”), if Tanox so chooses to pursue such continued manufacture, Development and/or Commercialization. Such cooperation and assistance shall be provided in a prompt and timely manner (having regard to the nature of the
cooperation or assistance requested) and shall include, without limitation, the matters consistent with those set forth in Schedule D (“Transitional Arrangements”) to the TCA. 
  
 (e) With respect to any Abandoned Product for which the Applicable Territory is worldwide which such
Abandoned Product has been abandoned subsequent to initiation of Phase III clinical trials therefor in the U.S.A. or any Major Country, in the event Tanox chooses to continue Development and Commercialization of such Abandoned Product, Tanox shall
pay to Novartis*****. 
  
 (f) Notwithstanding any
other provision of this Agreement, with respect to any Abandoned Product for which the Applicable Territory is not worldwide, Tanox shall not, without Novartis’ prior written consent, Develop or Commercialize such Abandoned Product in any
country where such Development or Commercialization would be likely to *****. 
  
 6.10 Opt-Out by Tanox. Tanox may voluntarily abandon its rights and obligations hereunder to Develop and Commercialize a given Product (including its related Family of Antibodies and Novartis derivatives
thereof) in one or more countries in East Asia, upon written notice to Novartis, at any time prior to the date which is ***** prior to the anticipated date of commercial launch of such Product in such country in East Asia. In such event, Tanox and
Novartis shall no longer be obligated hereunder to Develop or Commercialize such abandoned Product in such abandoned country and Novartis shall have the right, but not the obligation, to continue the Development and Commercialization of such Product
in such country, alone or with one or more Third Parties, without further obligation to Tanox with respect thereto, other than the obligation to pay royalties as set forth in Section 9.2 and applicable obligations under Articles 10 and 11. For the
avoidance of doubt, in no event will Novartis be obliged to reimburse Tanox for *****. 
  

	 	7.	Product Manufacturing. 

  
 7.1 Manufacturing Products. Novartis and Tanox (to the extent each is obligated to manufacture and supply under Sections 7.4 and 7.5) shall use
Commercially Reasonable Efforts, through the mechanisms set forth in this Agreement (including through a worldwide manufacturing and supply plan approved by the Project Steering Committee) and any Manufacturing and Supply Agreement(s), to ensure
that an adequate supply of Products is available to meet worldwide clinical requirements and commercial requirements. The Parties’ specific obligations and responsibilities with respect to manufacture and supply of clinical 

  

 -20- 

 
requirements and commercial requirements of Product shall be as set forth in this Article 7, the Manufacturing and Supply Agreements and any approved
worldwide manufacturing and supply plan (provided, however, that in no event shall any worldwide manufacturing and supply plan modify or amend any provision of this Agreement or any Manufacturing and Supply Agreement or impose a new
obligation on any Party without its consent). 
  
 7.2
Commercially Reasonable Efforts*****. To the extent that it is manufacturing any Product as provided in this Article 7, each Party shall *****. 
  
 7.3 Allocation of Product Supply. The Project Steering Committee shall have the responsibility and authority to allocate available supplies of
Products between different markets on a global basis consistent with *****. 
  
 7.4 Preclinical, Phase I and Phase II(a) Requirements. Tanox shall manufacture Product(s) required for pre-clinical and Phase I and Phase II (excluding any Phase II(b)) clinical trials pursuant to a clinical
development plan and budget approved by the Project Steering Committee, subject to reimbursement by Novartis of Tanox’s *****. *****. 
  
 7.5 Phase II(b), Phase III and Commercial Requirements. 
  

(a) In the event that Tanox desires to manufacture and supply all or some portion of a given Product as required for Phase II(b) and
Phase III clinical development and worldwide Commercialization, it shall provide written notice thereof to Novartis within ***** after initiation of the first Phase II clinical trials for such Product. ***** Upon receipt of such notice by Novartis,
Novartis shall have ***** to review and consider such proposal and to request additional information reasonably necessary (and reasonably available from Tanox) for Novartis to evaluate the proposal. ***** Novartis is free to propose revised or new
terms to Tanox. If, within such ***** period, Novartis decides to have Tanox manufacture such Product under such proposed terms and conditions (or such revised terms as Tanox may agree within such time period), Novartis shall advise Tanox of such in
writing, and Novartis and Tanox shall thereafter negotiate in good faith a Manufacture and Supply Agreement with terms and conditions that are consistent with the terms and conditions in Tanox’s notice and this Agreement. Such Manufacture and
Supply Agreement shall provide that Novartis shall purchase such Product from Tanox at a price equivalent to ***** (except for Product supplied for sale in Co-Promotion EA Territories, and the USA unless Tanox exercises Option IV as set forth in
Section 8.3(a)(iv), which Product shall be sold to Novartis at ***** and shall contain such other terms and conditions as are reasonable and customary in supply agreements for similar products including, without limitation, warranties, disclaimer of
implied and express warranties, limitation of liability, and indemnification provisions. If Tanox does not provide a notice of proposed manufacturing with respect to a given Product within the ***** period provided above, or if Novartis does not
accept Tanox’s manufacturing proposal within the other ***** period provided above, Tanox shall have no right or obligation to manufacture or supply such Product hereunder beyond Phase II clinical trials. 
  
 (b) In the event that Tanox does not manufacture and supply
such Product required for post-Phase II clinical trials and Commercialization as provided for under (a) above, Novartis shall have the exclusive right and obligation to manufacture and supply (itself or 

  

 -21- 

 
through an Affiliate or worldwide sublicensee) the worldwide post-Phase II development and commercial requirements for such Product, in accordance with the
remainder of this Article 7 and the terms of a technology transfer agreement to be entered into between the Parties to govern the transfer or any manufacturing technology from Tanox to Novartis. Such Product shall be supplied by Novartis: (i) at
***** for countries other than EA Co-Marketing Countries and the USA (unless Tanox exercises Option IV as set forth in Section 8.3(a)(iv)); and (ii) at ***** for EA Co-Marketing Countries and the USA (unless Tanox exercises Option IV as set forth in
Section 8.3(a)(iv)). In the event that any Product is to be sold by Tanox in a Co-Marketing EA Territory, Novartis and Tanox shall negotiate in good faith a Manufacture and Supply Agreement, which shall provide, among other things, that Novartis
shall supply Product to Tanox at a price equivalent to ***** for sale by Tanox in such Co-Marketing EA Territories. For any territories under which profit and loss sharing between Novartis and Tanox applies, the applicable supply price ***** for
Novartis shall be included within the calculation of such net profit and net loss (rather than paid separately by one party to the other). 
  
 (c) In the event Novartis manufactures and supply any Product hereunder, ***** Novartis shall pay Tanox, in the aggregate for each
calendar year and for each Product not manufactured by Tanox (on a Product-by-Product basis), commencing in the year of the first commercial production, an amount equal *****. For any territories under which profit and loss sharing between Novartis
and Tanox applies, the applicable supply price ***** for Novartis shall be included within the calculation of such net profit and net loss (rather than paid separately by one party to the other). 
  

	 	8.	Commercialization. 

  
 8.1 General Obligations; Exclusive Territories. Subject to Section 6.9, Novartis will bear overall responsibility, and shall use Commercially
Reasonable Efforts, to Commercialize the Product(s) and optimize the value of the Product(s) to the Parties worldwide;***** Subject to the terms and conditions of this Agreement, Novartis will have Exclusive Rights to Commercialize Products in the
Exclusive Territories during the Agreement Term. ***** 
  
 8.2
Commercialization in East Asia. Subject to the terms and provisions of this Agreement, both Tanox and Novartis will have Semi-Exclusive, Co-Marketing Rights (and/or, if necessary, Co-Promotion Rights) in East Asia as more fully described
herein during the Agreement Term; provided, however, that neither Party will Commercialize, directly or indirectly, any Product or Potential Product, or any modified version of either of them, other than: (i) a Product co-Developed by
the Parties for East Asia as set forth in Section 6.2; (ii) an Abandoned Product in the applicable country in East Asia; or (iii) with respect to Tanox only, a Potential Product which was not accepted by Novartis pursuant to Section 2.1. Costs and
profits for Commercialization of Products in East Asia shall be allocated as set forth in Section 9.4. 
  
 (a) To the extent allowed by any Legal Requirements in each country in East Asia, Tanox and Novartis shall Co-Market Products through
independent sales forces and under independent trademarks. Tanox and Novartis agree to negotiate in good faith a Co-Marketing agreement setting forth the details of such Co-Marketing arrangement (in accordance with the terms and conditions described
in this Section 8.2 and elsewhere in this Agreement as 

  

 -22- 

 
applicable) at a mutually agreeable time prior to the earlier of commencement of clinical trials for such country or preparation of any Approval application
for such country. Such Co-Marketing Agreement shall contain appropriate cross indemnities. 
  
 (b) In countries in East Asia where Co-Marketing as set forth in clause (a) above is prohibited by Legal Requirements, Tanox and Novartis
shall Co-Promote Products. To the extent allowed by any Legal Requirements in such countries, Novartis and Tanox shall coordinate the promotion of Products by Novartis and Tanox (each with a direct or contracted sales force comprised, in each case,
of appropriately experienced and qualified sales representatives), which Products will be invoiced, booked and distributed by Novartis under a trademark chosen by Novartis with due consideration to trademark suggestions, if any, from Tanox. Tanox
and Novartis agree to negotiate in good faith a Co-Promotion agreement setting forth the details of such Co-Promotion arrangement (in accordance with the terms and conditions described in this Section 8.2 and elsewhere in this Agreement as
applicable) at a mutually agreeable time prior to the earlier of commencement of clinical trials for such country or preparation of any Approval application for such country. 
  
 (c) In countries in East Asia where both Co-Marketing, as set forth in (a) and Co-Promotion as set forth in
(b) are prohibited by Legal Requirements, Novartis shall Commercialize such Products in such countries and Tanox and Novartis shall*****. 
  
 8.3 Commercialization in U.S.A. 
  
 (a) Upon receipt of data showing that the primary endpoint(s) have been met in all pivotal Phase III clinical trials for the initial
Approval of a Product for sale in the U.S.A., Novartis shall provide to Tanox a written report detailing all Development Costs incurred by or on behalf of Novartis in the U.S.A. to date for such Product. Within ***** of receiving such report, Tanox
shall provide written notice to Novartis indicating which of the following options Tanox desires to pursue: 
  
 (i) Tanox may participate in Co-Promotion of such Product in the U.S.A. (including by providing a direct or contracted sales force
comprised, in each case, of appropriately experienced and qualified sales representatives) and share U.S.A. Development Costs and Net Profits and Net Losses in the U.S.A. with respect to such Product on an ***** basis (“Option I”);

  
 (ii) Tanox may share U.S. Development Costs
and Commercialization Costs and Net Profits and Net Losses in the U.S.A. with respect to such Product on an *****) basis (“Option II”); 
  
 (iii) Tanox may share U.S. Development Costs and Net Profits and Net Losses in the U.S.A. with respect to such Product on a ***** basis
(“Option III”); and 
  
 (iv)
Tanox may forego participation in costs and net profits on such Product in the U.S.A (and not have the obligation to share U.S. Development Costs), in which case the U.S.A. shall be deemed to be an Exclusive Territory, and Novartis’ only
financial obligation to Tanox with respect thereto will be to pay Tanox the milestones and 

  

 -23- 

 
royalties on U.S.A. Net Sales as set forth Sections 9.1 and 9.2(a)(i) and (iv) (“Option IV”); 
  
 provided that, in the case of Option I, Option II or Option III: (A) Net Profits and
Net Losses shall be determined in accordance with a financial appendix to be agreed upon by the Parties within ***** of the earlier of the approval of the first development plan for East Asia and Tanox’s selection of any of such options, which
shall be substantially consistent with the applicable portions of the Financial Appendices to the TCA and Ancillary D&L Agreement (which financial appendix to this Agreement shall also cover East Asia); and (B) Tanox’s obligation for such
U.S.A. Development Costs will be paid solely out of ***** 
  
 (b) In the event that Tanox elects Option I, Tanox and Novartis agree to negotiate in good faith a Co-Promotion agreement which shall set forth the details of their Co-Promotion arrangement (in accordance with the
terms and conditions described in this Section 8.3 and elsewhere in this Agreement as applicable). Such negotiation shall commence upon the delivery to Novartis of Tanox’s election of Option I.  
  
 (c) Subject to Article 4 and applicable committee
consideration and approvals, Tanox acknowledges that it shall permit Novartis to design and implement the overall marketing and sales program as Novartis determines is commercially reasonable for the Product(s), with consideration of such input as
Tanox representatives may from time to time provide, for a reasonable time following the launch of the Product(s). Novartis acknowledges that after said reasonable time which shall be no less than ***** following the commercial launch of the
Product(s) in the U.S.A., *****. For the avoidance of doubt, nothing in this Section 8.3(c) shall limit Novartis’ obligations hereunder to exercise Commercially Reasonable Efforts or limit Tanox’s remedies with respect thereto. 

 
 8.4 If Novartis abandons or is deemed to have abandoned its right to
Develop and Commercialize a Product in a country as provided in Section 6.9, then (i) Tanox shall thereafter be granted or retain the Exclusive Rights to Develop and Commercialize such Product in such country under all Tanox and Novartis Patent
Rights and Know-How, and (ii) Tanox or a Third Party licensee or sublicensee of Tanox may freely carry on future Development and Commercialization of the Abandoned Product in the Applicable Territory, without further obligation to Novartis;
provided, however, that where the Abandoned Product is no longer being Developed or Commercialized by Novartis in any country: (i) Tanox shall be subject to ***** and (ii) the Novartis Patent Rights included in the foregoing license
shall be limited to those that cover the Abandoned Product in the form that existed or was contemplated to exist at the time of abandonment. 
  

 -24- 

	 	9.	Financial Commitments of Novartis 

  
 9.1 Milestone Payments. Novartis shall pay the following amounts to Tanox within ***** of the occurrence of the events specified hereinafter:

  

			
	 Event

	  	Payment

	 	  	*****
	 1. *****
	  	*****
	 2. *****
	  	*****
	 3. *****
	  	*****
	 4. *****
	  	*****
	 5. *****
	  	*****
	 6. *****
	  	*****
	 7. *****
	  	*****
	 8. *****
	  	*****

  
 The above payments
shall be made on a Product-by-Product basis for each different Product Developed and/or Commercialized hereunder (with “Product-by-Product” measured by reference to whether separate Approvals (excluding supplemental Approvals) are required
for the Products to be compared) *****. 
  
 9.2 Royalties.

  
 (a) In consideration of the rights herewith
granted, Novartis shall pay royalties to Tanox on Net Sales of the Product(s) based on the following: 
  
 (i) in all Exclusive Territories, for all applicable countries in the Exclusive Territories (aggregated together), for the applicable
Royalty Period with respect to each such country, on a Product-by-Product basis, on all Net Sales of each Product covered by a Valid Claim of an Exclusively Licensed Tanox Patent Right within a calendar year: 
  
 on that portion of the aggregate Net Sales in that calendar year which does
not exceed ***** of all units of such Product, the manufacture, importation, use or sale of which in a country would infringe (absent a license) a Valid Claim of an Exclusively Licensed Tanox Patent Right in such country: ***** 
  

 -25- 

 on that portion of the aggregate Net Sales in that calendar year which is greater than ***** but does
not exceed ***** of all units of such Product, the manufacture, importation, use or sale of which in a country would infringe (absent a license) a Valid Claim of an Exclusively Licensed Tanox Patent Right in such country: ***** 
  
 on that portion of the aggregate Net Sales in that calendar year which is
greater than ***** of all units of such Product, the manufacture, importation, use or sale of which in a country would infringe (absent a license) a Valid Claim of an Exclusively Licensed Tanox Patent Right in such country: ***** 
  
 provided, however, that in the event that more
than one Product is covered by the same Valid Claim of an Exclusively Licensed Tanox Patent Right in a country in the Exclusive Territories, then the Net Sales of each such Product in such country shall be aggregated to calculate the thresholds set
forth above. 
  
 (ii) in all Semi-exclusive
Territories, for the applicable Royalty Period, on Net Sales of Product(s) covered by a Valid Claim of an Exclusively Licensed Tanox Patent Right within a calendar year (in the aggregate): ***** 
  
 (iii) in countries outside of the U.S.A., for the applicable
Royalty Period, on Net Sales within a calendar year of all Products not covered by a Valid Claim of an Exclusively Licensed Tanox Patent Right(s): ***** 
  
 (iv) in the U.S.A., for the applicable Royalty Period, on Net Sales within a calendar year of all Products not covered by a Valid Claim of
an Exclusively Licensed Tanox Patent Right(s): ***** 
  
 Notwithstanding the
foregoing, the royalties payable to Tanox under this Section 9.2(a) shall be reduced, on a country-by-country and Product-by-Product basis, by an amount equal to the amounts set forth in Section 10.2(b) with respect to sales of such Product in such
country for the applicable period, subject to the limits set forth in Section 10.2(b) and Section 9.3. 
  
 (b) Tanox may permanently waive its Semi-Exclusive Rights in one or more countries in the Semi-exclusive Territory by giving written
notice thereof to Novartis, as provided for in Section 6.10 with respect to East Asia and in Section 8.3(a) with respect to the USA. In that event, such countries shall thereafter be considered as countries within the Exclusive Territories with
Exclusive Rights held by Novartis for purposes of calculating royalties on Net Sales of such Product. 
  
 (c) If any Product contains an Antibody and one or more therapeutically active substances besides an Antibody within the same Family of
Antibodies (or Novartis derivatives thereof) and besides any other Antibody licensed from Tanox to Novartis hereunder, and such other active substances are of comparable significance, or the added one(s) 

  

 -26- 

 
are of greater significance than such Antibody, then the Parties shall in good faith renegotiate a reduction to the above royalty rates applicable to such
Product. 
  
 (d) When royalty payments to Tanox
become due, Novartis shall have the right to receive a credit for ***** of the total amount of each such royalty payment (aggregated worldwide) until such time as the cumulative credits received under this provision shall equal the sum of (i) *****
of the amounts paid under Section 9.1, event numbers 5, 6, 7 and 8 only, and (ii) such amounts as may be permitted to be credited against royalty payments under Section 8.3; provided however,***** 
  
 (e) If in any country any Product is covered by more than
one of Tanox’s Patent Rights which entitles Tanox to royalty payments hereunder, the highest royalty rate shall be applicable, but no cumulation of royalties shall be made. 
  
 (f) The royalties for a given Product in a given country shall be payable for the applicable Royalty Period
for such Product and country. If all Valid Claims of the Tanox Exclusively Licensed Patents expire in a country prior to the end of the ***** period following the first commercial sale of the Product in that country, then the royalty rate for that
country shall thereafter drop to the rate applicable in countries without patent protection. 
  
 (g) All royalty payments shall be made in U.S. Dollars for each ***** within ***** after the end of such *****. Such royalty payments
shall be accompanied by a written statement indicating gross sales and Net Sales of the Product(s), as applicable, by country. Should any Party fail to make any payment to another Party under this Agreement when due, unless and to the extent that
the payment obligation is disputed (in good faith), the unpaid amount shall bear interest from the date due until paid at a rate equal to *****. 
  
 For the purpose of this Agreement, for Novartis all currencies will be converted using the then Novartis official currency conversion system *****. For
the purpose of this Agreement, for Tanox all currencies will be converted using a standard currency conversion system. 
  
 (h) If Novartis is required to pay or withhold any income tax or other tax with respect to royalty payments, Novartis shall first (i)
furnish Tanox, in writing, with satisfactory evidence that such payment or withholding is required, (ii) give Tanox its reasonable assistance to enable or assist Tanox to claim exemption from any such deduction and (iii) shall provide satisfactory
documentation to confirm the payment of the tax. 
  
 (i) To the extent and as long as the laws and/or regulations in force in any country prohibit the payment, conversion or remittance of the royalties as hereby contemplated, Novartis’ obligations under this Section 9.2. shall be
discharged by the deposit thereof to the account of Tanox, or its designee, in any commercial bank or trust company selected by Tanox located in such country; provided, that no infraction of law or regulation occurs in making such deposit.

  
 (j) Each Party shall maintain books and
records of account in sufficient detail to permit a determination of the accuracy of the payments made to the other hereunder and the amount of any discrepancy for a period of at least ***** from the date of their 

  

 -27- 

 
origin unless the records are in dispute. If the records are in dispute, the Party whose records are disputed shall keep the records until the dispute is
settled. 
  
 (k) Each of the Parties shall, at
its expense (except as provided below), have the right to audit, on an annual basis, the records maintained by the other Party under Section 9.2(j) in order to determine, with respect to any calendar year, the accuracy of any report or payment made
or required to be made under this Agreement. If a Party desires to audit such records, it shall engage an internationally-recognized independent accounting firm reasonably acceptable to the other Party to examine such records during normal business
hours; provided, however, that such right to audit shall be exercised only on at least ***** advance written notice, shall not occur more than once in any twelve (12) month period, and shall not occur more than once per year in the
***** following termination or expiration of this Agreement (with such audit rights expiring after such ***** period). Such accountant may not be paid on a contingency or other basis related to the outcome of the audit. Furthermore, such accountant
shall, prior to the audit, enter into a confidentiality agreement with the audited Party prohibiting the accountant from disclosing or using information obtained in connection with the audit other than the resulting accuracy, provided
however that the accountant shall be permitted to provide to the auditing Party information which should properly have been contained in any report required hereunder or otherwise disclosable to such Party. If the audit shows any
under-reporting or underpayment, or overcharging by any Party, that under-reporting, underpayment or overcharging shall be reported to the other Party and the underpaying or overcharging Party(s) shall remit such underpayment or reimburse such
overcompensation (together with interest as provided above with respect to any underpayment or overcharge) to the underpaid or overcharged Party(s) within ***** of receiving the audit report. The expense of such audit shall be borne by the auditing
Party; provided, however, that if an error of more than ***** in favor of the audited Party is discovered, then such expenses shall be paid by the audited Party.  
  
 9.3 Royalty reduction floor. Notwithstanding any other set-offs,
credits or other reductions to royalties which may be provided under this Agreement, the Parties agree that the total annual aggregate royalties and profit share payments payable to Tanox under this Agreement shall in no event be reduced by greater
than ***** of the total annual aggregate amount which would be payable absent any such set-offs, credits or reductions. 
  
 9.4 Cost and Profit Sharing in East Asia. 
  
 (a) All Development Costs associated with Development activities undertaken for Commercialization of Product(s) in East Asia, which may
include production of clinical materials, clinical trials and other activities for obtaining marketing authorization, and supporting activities/services and fees, shall be shared between Novartis and Tanox*****, except to the extent that each Party
is undertaking any such activity separately in an Co-Marketing EA Territory, in which case *****. 
  
 (b) All Net Profits and Net Losses in East Asia from Commercialization of the Product in Co-Promotion EA Territories shall be shared
between Novartis and Tanox *****, and*****. 
  

 -28- 

 (c) All costs for the manufacture/purchase of Product(s) and the costs for
Commercialization in Co-Marketing EA Territories, ***** 
  
 (d) Each Party shall*****. 
  
 9.5
Cost and Profit Sharing in U.S.A. In the event that Tanox exercises Option I, II or III as set forth in Section 8.3, Development Costs, net profits and net losses in the U.S.A shall be shared as set forth in Sections 8.3(a)(i),
(ii) and (iii), as applicable. In the event that Tanox exercises Option IV as set forth in Section 8.3,*****. 
  
 9.6 Loan Repayment Obligation. As of the Effective Date, the *****”Loan”, as described in Section 3 of the Supplemental Agreement and in
the Term Sheet for Secured Loan by and between Tanox (as Borrower) and Novartis (as successor in interest to Ciba-Giegy, as Lender) dated as of December 13, 1994 (collectively, together with any definitive agreement between Tanox and Novartis
implementing such Term Sheet, “Loan and Security Agreement”) and the other Loan Documents (as defined therein), together with any interest or penalties thereon, is hereby forgiven in full and Tanox shall have no obligation or liability to
Novartis (or any of its Affiliates, successors or assigns) with respect to the Loan or any interest or penalties thereon. On the Effective Date: (i) the Loan and Security Agreement and the other Loan Documents and all other agreements executed by
Tanox or any other obligor in connection with the Loan and Security Agreement will terminate, and Tanox and any other obligor under any of the Loan Documents will have no further liabilities or obligations thereunder; and (ii) all security interests
that Tanox and the other obligors have granted to Novartis with regard to, or in connection with, the Loan and Security Agreement shall be released, automatically and without any further act. To further evidence and effect termination of the Loan
and Security Agreement and the release of the security interests and liens granted to Novartis pursuant to the Loan and Security Agreement or any other agreement executed and delivered in connection therewith Novartis hereby authorizes Tanox to file
any and all evidences of the termination of the security interests in any and all locations in which a UCC-1 or other evidence of the security interests was filed. Novartis agrees that at any time and from time to time, it will, and will execute and
file such other termination statements or other agreements and instruments in form and substance reasonably satisfactory to Tanox or any other obligor, as the case may be, as Tanox or such obligor may reasonably request to further evidence and
effect termination described in this Section 9.6.  
  
 9.7
Reimbursement of Development Costs. Subject to Section 6.2(d), Novartis shall reimburse Tanox for all Development Costs incurred by Tanox hereunder in accordance with budgets and plans approved by Novartis or the PSC or applicable Working
Groups*****. Novartis shall reimburse such amounts on a ***** basis within ***** of its receipt of an invoice from Tanox therefore. 
  

	 	10.	Indemnification; Liability; Infringement. 

  
 10.1 Indemnification. 
  
 (a) Novartis shall indemnify, defend and hold Tanox, its Affiliates, successors, and permitted assigns and their respective directors,
officers employees and agents 

  

 -29- 

 
(the “Tanox Indemnitees”) harmless from and against any and all Third Party damages, costs, expenses, and other liabilities based upon *****

  
 (b) Tanox shall indemnify, defend and hold
Novartis, its Affiliates, successors, and permitted assigns and their respective directors, officers employees and agents (the “Novartis Indemnitees”) harmless from and against any and all Third Party damages, costs, expenses, and
other liabilities based upon ***** 
  
 (c) It is
understood that neither Party nor their officers, directors and employees shall be liable for any loss or damage caused by the negligence of the other Party while the latter Party is performing its work under this Agreement. 
  
 (d) For purposes of this Section 10.1, the Party requesting
indemnification hereunder shall give prompt written notice to the other Party of any Third Party suits, claims, actions, proceedings, investigations or demands which may give rise to any Damages for which indemnification will be sought under this
Section 10.1, such notice to describe in reasonable detail the basis for the requesting Party’s claim for indemnification; provided, however, that failure to give such notice shall not relieve the indemnifying Party of its
obligation to provide indemnification hereunder except, if and to the extent that such failure materially and adversely affects the ability of the indemnifying Party to defend the applicable claim, action, suit, investigation or proceeding.*****
Neither the indemnifying Party nor the indemnified Party shall settle or dispose of any such matter in any manner which would materially and adversely affect the rights or interests of the other Party (including the obligation to indemnify
hereunder) without the prior written consent of the other Party, which shall not be unreasonably withheld or delayed. The Parties shall cooperate with each other and their counsel, at the expense of the indemnifying Party, in the course of the
defense of any such claim, action, suit, investigation or proceeding, such cooperation to include without limitation using reasonable efforts to provide or make available documents, information and witnesses, regardless of whether such Party is
named as a party or is involved as an indemnified or indemnifying Party in any such claim, action, suit, investigation or proceeding. Except as provided above, the reasonable and verifiable costs and expenses, including fees and disbursements of
counsel, incurred by the indemnified Party in connection with any claim will be reimbursed on a calendar quarter basis by the indemnifying Party, without prejudice to the indemnifying Party’s right to contest the indemnified Party’s right
to indemnification and subject to refund in the event the indemnifying Party is ultimately held not to be obligated to indemnify the indemnified Party. 
  

(e) Any and all Third Party damages, costs, expenses, and other liabilities (except Excluded Costs) incurred by a Party based
upon any product liability claim, action, suit, proceeding or investigation by a Third Party (including without limitation claims by or on behalf of patients for personal injury or wrongful death) with respect to any Product Developed or
Commercialized under this Agreement shall be *****.  
  
 10.2 *****. 
  
 (a) Tanox shall
indemnify and hold harmless Novartis, its Affiliates and sublicensees from and against any and all damages, costs, expenses, and other liabilities incurred by them as the result of *****. Any amount due to Novartis, its Affiliates or  

  

 -30- 

 
sublicensees pursuant to this indemnification shall be paid solely out of royalties thereafter due by Novartis to Tanox hereunder (subject to the applicable
terms of this Agreement).  
  
 (b)
*****. 
  
 10.3 Infringement by a Third
Party. If Tanox, Novartis, or its respective Affiliate(s) or sublicensees becomes aware of any actual or threatened infringement of any Novartis or Tanox Patent Rights in the Field, such Party shall promptly notify the other Party in writing.
Subject to the TCA, Novartis and its Affiliate(s) or sublicensees, shall have the first right to bring, at Novartis’ own expense, an infringement action in the Field against any Third Party in its own name, or if necessary in the name of Tanox.
If Novartis, or its Affiliate(s) or sublicensees, do not bring a particular patent infringement action with respect to a Tanox Patent Right (or any Novartis Patent Right which is specific to the Antibody in an Abandoned Product worldwide and which
has been Developed and/or Commercialized by Tanox pursuant to Section 6.9) within ***** from the date of notification, or within ***** prior to expiration of any applicable statute of limitations on such action if earlier, Tanox shall be entitled to
bring such infringement action at Tanox’s own expense. The Party not conducting such suit shall assist the other Party and cooperate in any such litigation at the other’s reasonable request without out-of-pocket expense to the Party
providing such assistance. The award or settlement in such litigation shall*****. 
  
 10.4 Insurance. Prior to a Party hereunder initiating human clinical trials or the manufacture, marketing or sale of any Product(s) hereunder, such Party shall self-insure for, or procure and maintain,
liability insurance in such amounts and having such limits and terms as are reasonable and customary in the industry for products of the nature of the Products. 
  

10.5 Cost Sharing in Co-Promotion EA Territories. Notwithstanding any other provision of this Agreement (but without limiting the indemnity
obligations of the Parties under Sections 10.1 and 10.2), the Parties acknowledge and agree that all damages (other than Excluded Costs) incurred by any Party with respect to any product liability claim, action, suit, proceeding or investigation by
a Third Party (including without limitation claims by or on behalf of patients for personal injury or wrongful death and patent infringement) with respect to any Product Developed or Commercialized under this Agreement in Co-Promotion EA Territories
shall be treated as ***** for the country in which the claim, action, suit, proceeding or investigation is brought. 
  

	 	11.	Confidentiality and Publications. 

  
 11.1 Confidentiality Obligations. Subject to the other terms of this Agreement (including Section 11.2 below), each Party acknowledges and agrees
that all information provided pursuant to this Agreement by or on behalf of the other Party or its Affiliates (the “Disclosing Party”) to such Party or its Affiliates (the “Receiving Party”) is confidential and
agrees (i) to maintain such information disclosed by a Disclosing Party in strict confidence and not disclose it to any Third Party and (ii) to use, and to cause its Affiliates to use, such information disclosed by a Disclosing Party solely for the
purposes contemplated under this Agreement (including for the purpose of exercising a Party’s rights or performing a Party’s obligations under this Agreement).  
  

 -31- 

 11.2 Exclusions and Exceptions. The obligations under Section 11.1 above shall not apply to
information of the Disclosing Party which the Receiving Party can show: (i) is or has become generally available to the public otherwise than through violation of the Receiving Party’s obligations under Section 11.1 above; (ii) has been
received by the Receiving Party from a Third Party who did not acquire it directly or indirectly from the Disclosing Party; (iii) was in the Receiving Party’s possession prior to disclosure by the Disclosing Party; or (iv) was independently
created by the Receiving Party without use of or reference to information provided by the Disclosing Party. In addition, the Receiving Party may disclose information disclosed by the Disclosing Party (i) to the extent required by the Receiving Party
to comply with Legal Requirements (including applicable securities laws), to defend or prosecute litigation, or to file or prosecute patent applications relating to Patent Rights pursuant to Section 5.3 of this Agreement, provided that in each case
the Receiving Party provides prior written notice of such disclosure to the Disclosing Party and takes reasonable and lawful actions to avoid and/or minimize the degree of such disclosure, and (ii) to any Affiliate of the receiving Party, or any
employees, agents (including consultants), legal representatives, permitted sublicensees or any other Persons acting under the authorization of such Party or its Affiliate (collectively, “Authorized Recipients”), provided that such
Authorized Recipients are bound by confidentiality obligations with respect to such information no less stringent than those set forth in Section 11.1. The Receiving Party shall be liable to the Disclosing Party for any breach of this Section 11 by
the Receiving Party’s Authorized Recipients. 
  
 11.3
Scope of Information Covered. With effect from the date hereof, the provisions set forth in this Section 11 shall apply also to information disclosed under the Original D&L Agreement, other than any information with respect to any
Anti-IgE Antibody or Anti-IgE Product. 
  
 11.4 Injunctive
Relief. Each Party acknowledges that damages resulting from disclosure of any other Party’s confidential information in breach of the provisions of this Section 11 may be an inadequate remedy and that in the event of any such disclosure or
threatened disclosure, the Party (or the Affiliate of a Party) owning or having rights to such information shall be entitled, at any time, to seek injunctive relief or other equitable relief in any court of competent jurisdiction in addition to any
and all remedies available at law or in equity (provided that legal relief, such as damages, shall only be available under the alternative dispute resolution process set forth in Section 14.5). 
  
 11.5 Publication. The Parties acknowledge the legitimate interest of
their respective employees in publishing findings under this Agreement to the scientific community. The Parties further acknowledge their competing mutual interest that publications be made and lectures, seminars, or other presentations be given
only to the extent that both Parties’ commercial interests have been reasonably safeguarded through patent protection or otherwise so that Third Parties cannot make commercial and/or industrial use of the information contained in such
disclosures. For this purpose, each Party shall ensure that the other shall have the opportunity to comment on any publication or oral presentation in public involving disclosure at least ***** prior to submission or presentation of any information
under this Agreement that may constitute confidential information and that no such publication or presentation relating to such confidential information under this Agreement shall be made without such other Party’s prior written consent. The
Party from which such consent is requested shall not unreasonably 

  

 -32- 

 
withhold or delay such consent. A request from the non-disclosing Party that any such publication or presentation be delayed until a patent application is
filed thereon shall be a reasonable request to delay; provided, that such delay lasts no more than ***** from the date of such request. 
  

	 	12.	Right of First Refusal. 

  
 Novartis will have the right of first refusal to market any Potential Product(s) within the Field that are independently Developed by Tanox as permitted
under Section 2.3 as follows. At such time, if any, as Tanox desires to license out all or part of the rights to any such Potential Product(s), Tanox shall provide Novartis with notice in writing of such intent, along with the terms and conditions
upon which such license will be offered by Tanox. Such notice shall be accompanied by sufficient information regarding the molecular structure of such Potential Product, results of preclinical and clinical testing of the Potential Product, whether
or not such testing was GLP and GCP compliant, intellectual property filings made (or proposed to be made) with respect to the Potential Product, the means by which the Potential Product is (and is proposed to be) produced and formulated, the
estimated cost of goods and such other information as Tanox reasonably expects to provide to potential Third Party licensees. Novartis will have ***** after the date of receipt of such notice and information to notify Tanox, in writing, as to
whether Novartis is exercising its right of first refusal hereunder. Upon receipt of such notice by Tanox, the Parties shall negotiate in good faith any details necessary to consummate such license transaction for the applicable Potential Product(s)
within ***** from the date of Tanox’s receipt of Novartis’ notice and information (or such longer time as may be agreed between the Parties). At the conclusion of such negotiation period, unless Novartis and Tanox have reached written
agreement with respect to the exercise of its rights for such Potential Product(s) (with closing to occur within ***** thereafter) or if Novartis fails to respond to Tanox within the initial ***** period, Tanox shall be free to conclude a license
transaction with a Third Party for such Potential Product(s) in accordance with the terms and conditions that are***** 
  

	 	13.	Term; Termination.  

  
 13.1 Expiration. Unless earlier terminated as permitted hereunder, this Agreement shall remain in effect, on a country by country basis, for the
Agreement Term. 
  
 13.2 Termination. 
  
 (a) Termination By Novartis 
  
 (i) Prior to submission of a registration package requesting
Approval for commercial sale of the first Product(s) in the first Major Country, this Agreement and the licenses granted hereunder may be terminated by Novartis, with or without cause, at any time upon ***** prior written notice thereof to Tanox.
During such period, pending the effectiveness of such termination notice, Novartis agrees to withhold public disclosure of such termination until it has provided the reasons for such termination to Tanox. Any payments according to Section 9.1 of
this Agreement shall, however, not become payable by Novartis to Tanox during such ***** period. 
  

 -33- 

 (ii) Subsequent to submission of a registration package requesting approval for
commercial sales of the Product(s) in the first Major Country, if Novartis reasonably determines, in good faith, that there are unanticipated limitations on the market opportunity represented by the Product(s) because of restrictive labeling
requirements, side effects, absence of medical needs, conditions which in Novartis’ reasonable judgment make it commercially unreasonable to launch the Product(s), or similar problems, then this Agreement and the licenses granted hereunder may
be terminated by Novartis upon ***** prior written notice thereof to Tanox. ***** Any payments according to Section 9.1 of this Agreement shall, however, not become payable by Novartis to Tanox during such ***** notice period. 
  
 (iii) Subsequent to commercial launch of Product(s) in the
first Major Country, Novartis may terminate this Agreement and the licenses granted hereunder upon ***** prior written notice thereof to Tanox. During such notice period: (A) Novartis shall use Commercially Reasonable Efforts to continue
Commercialization of the Product(s) in such countries as the Product(s) were being Commercialized at the time of its notice of termination and will continue to use Commercially Reasonable Efforts with respect to any Development activities with
respect to the Product(s) which were ongoing at the time of its notice of termination; and (B) Tanox may, by written notice to Novartis, terminate the Agreement with respect to any particular country with effect from the date set forth in such
notice (which date shall not be less than ***** after the receipt by Novartis of such notice).  
  
 (b) Termination for Cause. Either Party may terminate this Agreement in the event of a material breach by the other;
provided, that the breaching Party is given written notice of such claimed breach and a reasonable time, not to exceed ***** s in the case of any alleged breach other than a failure to use Commercially Reasonable Efforts, in which to cure
such breach or submit same to arbitration hereunder; provided, however, that such period to cure may be extended for up to an additional*****, upon written request, if such additional time is reasonably necessary to effect such cure
(provided, that such breaching Party is using its reasonable efforts to diligently pursue such cure) or within the reasonable period*****, if any, permitted by the arbitration panel for such cure following resolution of any dispute with
respect thereto in accordance with Section 14.5. In the event that arbitration is commenced with respect to any alleged breach hereunder, no purported termination of this Agreement pursuant to this Section 13.2(b) shall take effect until completion
of such arbitration. ***** 
  
 13.3 Effect of Termination.

  
 (a) If this Agreement is terminated by Tanox
pursuant to Section 13.2(b) or by Novartis pursuant to Section 13.2(a), then Novartis and its Affiliate(s) and sublicensees, as applicable, shall return to Tanox all documented or written Know-How provided by Tanox under this Agreement and Novartis,
and its Affiliate(s) and sublicensees and shall have no further right or license to Tanox’s Know-How or Patent Rights. 
  
 (b) Upon any termination (other than an expiration or a termination by Novartis pursuant to 13.2(b)), Tanox shall retain and be granted a
non-exclusive, world-wide 

  

 -34- 

 
license to Novartis’ Patent Rights and Know-How for the manufacture, use, importation, sale and offering for sale of the Product(s), with the right to
sublicense. 
  
 (c) If Novartis terminates this
Agreement in good faith under Section 13.2.(a) (i) because adverse results obtained in the Development activities for the Product(s) make such termination reasonable under the circumstances and, if Tanox or any of its licensees intends to use
Novartis’ Patent Rights or Know-How for the manufacture, use, importation, sale, and/or offering for sale of the Product(s), the studies conducted by Novartis and its Affiliates and sublicensees relating to Product(s) may only be used if *****.
If Novartis terminates this Agreement under Section 13.2(a)(i) for any other reason and the foregoing use by Tanox or its licensees occurs, then Tanox shall *****. 
  
 (d) If Novartis terminates this Agreement under Section 13.2(a)(ii) or (iii), then, in addition to the
matters set forth in paragraph (a) above: (i) Tanox shall retain and be granted a nonexclusive, worldwide license to Novartis’ Patent Rights and Know-How for the manufacture, use and sale of the Product(s), with the right to sublicense; and
(ii) Tanox may use the studies conducted by Novartis and its Affiliates and sublicensees relating to Product(s) *****. In addition, Novartis will provide Tanox with such additional reasonable assistance in connection with transfer of Development
activities, product registrations and applications, regulatory approvals, and other matters necessary to Tanox’s assumption of Novartis’ responsibilities under this Agreement as the Parties may mutually agree is appropriate. 
  
 (e) Termination of this Agreement for any reason shall be
without prejudice to Tanox’s right to receive all royalties accrued and unpaid on the effective date of termination and shall not relieve either Party of any liability from any obligations which have accrued hereunder prior to such termination.

  
 (f) The confidentiality obligations set forth
in Section 11 shall survive the termination or expiration of this Agreement for the maximum period permitted under Section 11. 
  
 13.4 Survival. Sections 1, 3.1(b), 3.2(b), 3.2(c) (except in the event of a termination by Novartis under Section 13.2(b)), 3.6, 9 (solely with
respect to amounts accrued or owed prior to expiration or termination; provided, however, that Section 9.6 shall survive generally), 10 (with respect only to events occurring prior to expiration or termination), 11 (but only for a
period of ***** after the effective date of termination), 13, and 14 shall survive expiration or termination of this Agreement. 
  

	 	14.	Miscellaneous 

  
 14.1 Force Majeure. No Party shall be held liable or responsible to any other Party or be deemed to have breached or defaulted under this Agreement
for failure or delay in performing its obligations hereunder or thereunder to the extent, and as long as, such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party, which would not have been
avoided by the exercise of due care and reasonable prudence, and the observance of reasonable standards in the pharmaceutical industry, including, without limitation but subject to the foregoing, fire, floods, earthquakes, hurricanes, tornados,
embargoes, war, acts 

  

 -35- 

 
of terrorism, insurrections, sabotage, riots, civil commotions, strikes, lockouts or other labor disturbances, acts of God, incapacitation (including without
limitation, contamination) of manufacturing facilities, omissions or delays in acting by any governmental authority, and acts of a government or agency thereof and judicial orders or decrees (“Force Majeure Events”). In the event of
occurrence of the foregoing, each Party must use Commercially Reasonable Efforts to mitigate the adverse consequence of such cause or Force Majeure Event. If the performance of any obligation under this Agreement is delayed owing to a Force Majeure
Event for any continuous period of more than *****, the Parties hereto shall consult with respect to an equitable solution, including the possible termination of this Agreement. 
  
 14.2 Non-Disclosure. No Party shall, without the prior written consent of the other Party, issue any press release or
make any other public announcement or furnish any written or oral statement to any Third Party, which makes reference to this Agreement, any of the transactions contemplated hereby or thereby, or any other Party or its Affiliates; provided,
however, that such consent shall not be unreasonably withheld to the extent such disclosure is required by securities disclosure requirements or otherwise by an authorized Public Authority. Each Party shall provide a draft of any of the
aforementioned documents containing any such reference (including without limitation, a copy of this Agreement or any excerpt hereof, proposed to be filed with any securities regulatory authority or any securities exchange) to the other Party and
its counsel as far in advance of release thereof and in sufficient time for review of such documents by the other Party and its counsel, and in any event not less that ***** prior to release thereof. In the event such other Party objects to any such
reference, the applicable document will be modified to such Party’s reasonable satisfaction. If a Party does not deliver its written comments on such documents within ***** of receipt thereof with respect to press releases (or such shorter time
as may be agreed by the Parties) and ***** with respect to all other materials (or such shorter time as may be agreed by the Parties), such Party shall be deemed to have consented to any such references therein. When a Party has obtained the other
Party’s consent for a public announcement or statement, it will not be required to obtain the other Party’s consent for a subsequent public announcement or statement of the same subject matter which does not disclose any additional or
materially different information from that contained in any previously approved disclosure; provided, however, that: (i) such subsequent public announcement or statement does not characterize such subject matter in a materially
different way to such previously approved disclosure; (ii) such Party provides to each of the other Party a copy of any such subsequent public announcement or statement not less than *****s prior to its proposed disclosure; and (iii) information
concerning the other Party and its Affiliates may not be used without obtaining consent to each such disclosure. Nothing herein contained shall be construed to impose upon either Party any liability or other obligation (to the other Party or any
other Person) in respect of any such references in any such documents. In the event that one Party reasonably concludes that a given disclosure is required by law and the other Party disagrees with the substance or extent of the disclosure, then the
Party seeking such disclosure shall either (i) limit said disclosure to address the concerns of the other Party, or (ii) such dispute if not resolved by corporate counsel to the Parties, shall be resolved in accordance with the legal opinion
received from a law firm that is reasonably acceptable to the Parties and has no material relationship with either of the Parties or their Affiliates, with the fees to such law firm to be paid equally by the Parties. With respect to any required
filing of this Agreement with a Public Authority, the filing Party shall seek confidential treatment of portions of this Agreement and the 

  

 -36- 

 
other Party shall have the right to review and comment on such an application for confidential treatment prior to its being filed. 
  
 14.3 Notices. Any notices to be given hereunder shall be in writing
and shall be delivered by one of the following means: personal delivery, certified or registered airmail, facsimile with confirmed receipt or confirmed delivery by an overnight commercial courier service: 
  

	 	(a)	if to Novartis, to: 

  
 Novartis Pharma AG 
 Lichtstrasse 35

 CH 4002 Basel, Switzerland 
 Attention: Head, Global Business Development and Licensing 
 Telephone: 41 61 324 5416 
 Facsimile: 41 61 324 2100 
  
 with a required copy to: 
  
 Novartis Pharma AG 
 Lichtstrasse 35

 CH 4002 Basel, Switzerland 
 Attention: General Counsel 
 Telephone: 41 61 324 6877 
 Facsimile: 41 61 324 6859 
  

	 	(b)	if to Tanox, to: 

  
 Tanox, Inc. 
 10301 Stella Link Drive

 Houston, Texas 77025 
 Attention: President 
 Telephone: 713-578-4000 
 Facsimile: 713-578-5002 
  
 with a
required copy to: 
  
 Tanox, Inc. 
 10301 Stella Link Drive 
 Houston, Texas 77025

 Attention: General Counsel 
 Telephone: 713-578-4000 
 Facsimile: 713-578-5002 
  
 A notice shall be deemed to be given at the time of delivery in the case of personal delivery, or upon confirmed receipt
(including machine confirmation) in the case of facsimile delivery or upon receipt in the case of delivery by certified or registered mail or upon confirmed receipt (including courier confirmation) in the case of commercial courier. 
  

 -37- 

 14.4 Governing Law; Submission to Jurisdiction. This Agreement shall be governed by and construed
in accordance with laws of the State of New York without giving effect to the principles of conflict of laws thereunder (other than Section 5-1401 of the General Obligations Law). Further, the Parties hereby consent to the personal jurisdiction of
the courts of the State of New York, County of New York, and the United States Federal District Court for the Southern District of New York over any claim for enforcement of an award of the arbitrators pursuant to Section 14.5 of this Agreement and
will waive any claims of forum non conveniens or objection to the laying of venue in any of such courts.  
  
 14.5 Dispute Resolution. 
  
 (a) Subject to securing injunctive relief pursuant to Section 11, the Parties agree that all Disputes shall be resolved only as set forth
in this Section 14.5. Notwithstanding anything to the contrary in this Section 14.5, in the event that a Party reasonably requires relief on a more expedited basis than would be possible pursuant to the procedure set forth in this Section 14.5, in
the event that a Party reasonably requires relief on a more expedited basis than would be possible pursuant to the procedure set forth in this Section 14.5, such Party may seek a temporary injunction or other interim equitable relief in a court of
competent jurisdiction pending the ability of the arbitrators to review the decision under this Section 14.5. 
  
 (b) The Parties agree that, subject to securing injunctive relief pursuant to Section 11 or as provided in Section 14.5(a) above, the
Parties shall attempt to resolve any Dispute through good faith negotiation and discussion, including through the participation of their respective members of the Project Steering Committee. If a Party believes that the Dispute has not been resolved
within ***** after it was submitted (either in writing or through discussion among the Project Steering Committee members) to the Project Steering Committee, any Party may send a written Notice of Dispute to the Chairman of the Project Steering
Committee, specifying therein the nature of the Dispute and the relief requested, and requesting that the Senior Officers of the Parties meet to attempt to resolve the Dispute. The Chairman of the Project Steering Committee shall promptly forward
the Notice of Dispute to the Senior Officers of the Parties. The Senior Officers shall diligently attempt to resolve the referred Dispute by mutual consent of the Parties, including, without limitation, by means of an in-person meeting. In the event
that the Senior Officers are unable to resolve any Dispute within ***** from the date that the Notice of Dispute was delivered to the Chairman of the Project Steering Committee, either Party shall be free to file a notice of arbitration with respect
to the Dispute pursuant to Section 14.5(c). 
  
 (c) Subject to Section 11 and 14.5(a), if the Parties are unable to resolve any Dispute through the procedures described in Section 14.5(b) above, the Dispute shall, at the request of either Party to the Dispute, be finally settled by
arbitration in accordance with the Rules of Arbitration of the International Chamber of Commerce (the “ICC Rules”)*****. 
  
 (d) The arbitration panel shall consist of ***** arbitrators, each of whom must have *****, who shall each be nominated, appointed and
confirmed by the International Court of Arbitration of the International Chamber of Commerce in Paris, France (the “ICC Court”) in accordance with the ICC Rules (other than Article 8 of the ICC Rules). The 

  

 -38- 

 
ICC Court shall appoint one of the arbitrators as the presiding arbitrator. The place of arbitration shall be Washington D.C., and the language of the
arbitration shall be English. 
  
 (e) Without
limiting the ICC Rules, the Parties and the arbitrators shall use all reasonable efforts to ensure that the terms of reference for the Dispute have been agreed upon and signed as soon as practicable and in any event within two (2) months after the
Dispute was referred to the ICC. ***** 
  
 (f)
***** 
  
 (g) *****. 
  
 (h) *****. 
  
 (i) ***** 
  
 (j) ***** 
  
 (k) ***** 
  
 (l) The arbitrators shall issue the award (including grounds
and reasoning) in writing no later than ***** following the conclusion of the last arbitration hearing, unless otherwise agreed by the Parties. 
  
 (m) The Parties shall use reasonable efforts to conclude the arbitration hearings within ***** following the confirmation of the
arbitration panel. 
  
 (n) The Parties
specifically agree that the arbitrators shall be empowered to award injunctive or other equitable relief (including, but not limited to interim relief) should they see fit. The award of the arbitrators shall be final and binding on the Parties and
may be enforced in any court of competent jurisdiction. 
  
 (o) *****. 
  
 (p) Provided the Agreement has not terminated and unless their continued performance would be likely to cause them irreparable harm, the Parties covenant to continue performance under the Agreement in accordance with the terms hereof,
pending the final resolution of the Dispute, and without limiting the foregoing shall continue their participation in the cooperation and Project Steering Committee provided for in this Agreement. 
  
 (q) ***** 
  
 14.6 Relationship of Parties. Both Parties are independent contractors
under this Agreement. Nothing contained in this Agreement is intended nor is to be construed so as to constitute Tanox or Novartis as partners or joint venturers with respect to this Agreement. Neither Party 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 other contract, agreement, or undertaking with any Third Party. 
  

 -39- 

 14.7 Assignment. Either Party may freely assign this Agreement or any of its rights, interests,
duties or obligations hereunder, in whole or in part, to an Affiliate, provided that such assignment shall not relieve in any way the obligations of an assigning Party hereunder. Subject to the Parties’ rights to grant sublicenses,
neither Party shall assign this Agreement or any of its rights, interests, duties or obligations hereunder to a Third Party without the prior written consent of the other Party (and any attempt to do so shall be null and void) unless such assignment
is part of a merger, acquisition or sale of such Party or all or substantially all of its assets (in which case no consent is required). This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of each of
the Parties. 
  
 14.8 Severability. If any provision herein
shall be held invalid or unenforceable by a court of competent jurisdiction or other authority in any Regulatory Jurisdiction, the remainder of the provisions herein shall remain in full force and effect with respect to such Regulatory Jurisdiction
and shall not be affected thereby. To the extent that any provision hereof shall be held to be wholly or partially invalid or unenforceable in any Regulatory Jurisdiction, the Parties shall use their best efforts to replace the invalidated provision
with a valid and enforceable provision which, insofar as practicable, implements the intent of the invalidated, or partially invalidated, provision with respect to such Regulatory Jurisdiction. 
  
 14.9 Entire Agreement. This Agreement, together with the TCA and the
Ancillary D&L Agreement (together with all exhibits and schedules thereto), constitutes the entire agreement of the Parties hereto regarding the subject matter hereof and, except as otherwise specified herein, supersedes all prior agreements of
the Parties with respect to such subject matter. This Agreement supersedes and replaces the Original D&L Agreement, Supplemental Agreement and Loan Agreement. 
  
 14.10 Amendments. No provision in this Agreement shall be supplemented, deleted or amended except in a writing
executed by each of the Parties. 
  
 14.11 Waiver. Nothing
contained in this Agreement shall cause the failure by any Party hereto to insist upon strict compliance with any provision hereof by any other Party to operate as a waiver with respect to such provision, unless such waiver is in writing and
delivered to such other Party hereto in accordance with Section 14.3 hereof. The failure from time to time by any Party to exercise, or the waiver by such Party of, any of such Party’s rights or remedies hereunder shall not operate or be
construed as a continuing waiver of the same or of any other of such Party’s rights or remedies provided under this Agreement. 
  
 14.12 Agreement to Perform Necessary Acts. Each Party agrees to take or cause to be taken such further actions, and to execute, deliver and file or
cause to be executed, delivered and filed such further documents and instruments, and to obtain such consents, as may be reasonably required or requested by another Party in order to put into full effect the purposes, terms and conditions of this
Agreement. 
  
 14.13 Compliance with Applicable Laws.
The Parties, and their respective Affiliates, shall perform their obligations under this Agreement, including any Development, manufacture or Commercialization of Products hereunder, in compliance with applicable Legal Requirements. No Party or
any of its Affiliates shall, or shall be required to, undertake any 

  

 -40- 

 
activity under or in connection with this Agreement which violates, or which it believes, in good faith and on the advice of counsel, may violate, any
applicable Legal Requirements. Without limiting the foregoing, in the event that any Party commercializes any competing product outside of the collaboration contemplated by this Agreement, the Parties shall, to the extent necessary to comply with
applicable Legal Requirements, institute screening procedures to ensure that such Party’s representation on the Project Steering Committee will not disclose or exchange pricing information or other competitively sensitive information with
personnel of such Party who are responsible for commercialization of such competing products outside of the collaboration contemplated by this Agreement. 
  
 14.14 Limitations on Liability. 
  
 IN NO EVENT SHALL EITHER PARTY OR ITS AFFILIATES BE LIABLE TO THE OTHER PARTY OR SUCH OTHER PARTY’S AFFILIATES OR THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES OR AGENTS FOR SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS) SUFFERED BY THE OTHER PARTY OR SUCH OTHER PARTY’S AFFILIATES OR THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES OR AGENTS UNDER THIS AGREEMENT. Notwithstanding any of the foregoing in this Section 14.14 to the contrary, nothing in this Section 14.14 shall limit a Party’s right to seek and recover royalties or profit share payments
which would have been payable or due under Section 9 of this Agreement but for a Party’s breach of this Agreement. 
  
 14.15 Third Party Beneficiaries. The provisions of this Agreement are solely for the benefit of the Parties hereto and are not intended to confer
upon any person except the Parties hereto any rights or remedies hereunder, and there are no Third Party beneficiaries of this Agreement and this Agreement shall not provide any third person with any remedy, claim, liability, reimbursement, claim of
action or other right in excess of those existing without reference to this Agreement. 
  
 14.16 Fees and Expenses. Unless specifically provided for herein, each Party shall bear its own fees and expenses incurred in connection with the transactions contemplated by this Agreement. 
  
 14.17 Descriptive Headings. The descriptive headings herein are
inserted for convenience only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. 
  
 14.18 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts have been signed by each of the Parties and delivered to the other Party. 
  
 14.19 Language. The definitions of the terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context
may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.
The word “will” shall be construed to have the same meaning and effect as the word “shall”. 
  

 -41- 

 IN WITNESS WHEREOF, this Agreement has been executed on the day and year first above written. 

 

			
	 TANOX, INC.

		
	By:	 	 
	 	 	

	 	 	 Name: Nancy T. Chang

		
	 	 	 Title: President and Chief Executive Officer

  

			
	 NOVARTIS PHARMA AG

		
	By:	 	 
	 	 	

	 	 	 Name: Daniel J. Weston

		
	 	 	Title: Global Head, Alliance Management, Business Development & Licensing

  

			
		
	By:	 	 
	 	 	

	 	 	 Name: Kimberly J. Urdahl

		
	 	 	 Title: Head of Legal, Primary Care

  

 -42- 

 EXHIBIT A 
  

Exhibit A 
  
 Exclusively Licensed Tanox Patents 
  
 ***** 
  

 Page 2 

 EXHIBIT B 
  

Exhibit B 
  
 Products 
  

 EXHIBIT C 
  

Exhibit C 
  
 Potential Product Report Information 
  
 Each Potential Product Report shall set forth, in reasonable detail, the following information regarding the Potential Product which is the subject of the report: 
  
 ***** 
  

 EXHIBIT C 
  

			
	 Item

	  	 Guideline

		
	1	  	 *****

		
	2	  	 •      *****

		
	3	  	 *****

		
	 	  	 •      *****

		
	4	  	 *****

		
	 	  	 *****

		
	 	  	 •      *****

		
	 	  	 *****

		
	 	  	 •      *****

		
	5	  	 •      *****

		
	6	  	 *****

		
	 	  	 •      *****

		
	7	  	 *****

		
	 	  	 •      *****

		
	8	  	 *****

		
	 	  	 •      *****

  

 Page 2Ancillary Development and Licensing Agreement

 EXHIBIT 10.3 
  
 CERTAIN INFORMATION IN THIS EXHIBIT IS SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT IN ACCORDANCE WITH RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED. SUCH INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATION OF SUCH OMITTED INFORMATION HAS BEEN INDICATED WITH ASTERISKS (*****). 
  

  
 ANCILLARY DEVELOPMENT & LICENSING AGREEMENT 
  
 By and Between 
  
 NOVARTIS PHARMA AG 
  
 AND 
  
 TANOX, INC. 
  
 Dated as of February 25, 2004 
  

  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

	 ARTICLE 1 DEFINITIONS
	  	2
		
	 ARTICLE 2 PURPOSE AND EFFECT OF THIS AGREEMENT
	  	6
			
	 2.1
	  	Outline of Terms and Original D&L Agreement	  	6
	 2.2
	  	Other Agreements	  	6
	 2.3
	  	Costs	  	6
		
	 ARTICLE 3 COOPERATION
	  	6
			
	 3.1
	  	Cooperation in EA Generally	  	6
	 3.2
	  	Commercially Reasonable Efforts	  	7
	 3.3
	  	*****	  	7
	 3.4
	  	Scope of Cooperation	  	7
	 3.5
	  	Compliance With Legal Requirements	  	7
	 3.6
	  	Information Sharing	  	7
		
	 ARTICLE 4 GOVERNANCE
	  	8
			
	 4.1
	  	Governance For East Asia Generally	  	8
	 4.2
	  	Governance For Rest of World	  	8
	 4.3
	  	The TanNov Joint Management Committee	  	8
	 4.4
	  	The TanNov Joint Commercialization Committee	  	10
	 4.5
	  	Alliance Management Representatives	  	12
	 4.6
	  	TanNov JCC Sub-Committees	  	13
	 4.7
	  	Disclosure of Information	  	14
	 4.8
	  	Certain Limitations on TanNov Committees	  	14
		
	 ARTICLE 5 DEVELOPMENT
	  	14
			
	 5.1
	  	Development of Anti-IgE Products Generally	  	14
	 5.2
	  	Development in East Asia	  	15
	 5.3
	  	Development in ROW	  	15
	 5.4
	  	Information Sharing	  	16
		
	 ARTICLE 6 REGULATORY ACTIVITIES
	  	16
			
	 6.1
	  	Regulatory Development Activities in East Asia	  	16
	 6.2
	  	Regulatory Development Activities in the Rest of World	  	17
	 6.3
	  	Regulatory Development Information Sharing and Safety Management	  	18
		
	 ARTICLE 7 COMMERCIALIZATION
	  	18
			
	 7.1
	  	Commercialization in East Asia	  	18
	 7.2
	  	Commercialization in the Rest of World	  	19
	 7.3
	  	Product Trade Dress in East Asia and Rest of World	  	19
	 7.4
	  	Preparation and Review of Promotional Materials in East Asia and the Rest of World	  	19

  

 i 

					
	 7.5
	  	Anti-IgE Product Marketing and Distribution in East Asia and the Rest of World	  	19
	 7.6
	  	Booking of Sales in East Asia and the Rest of World	  	20
	 7.7
	  	Sales Force in East Asia and the Rest of World	  	20
	 7.8
	  	Anti-IgE Product Samples in East Asia and the Rest of World	  	20
	 7.9
	  	Pricing and Pricing Approvals in East Asia and the Rest of World	  	20
	 7.10
	  	Customer Service	  	20
		
	 ARTICLE 8 MANUFACTURING
	  	20
			
	 8.1
	  	Products Manufactured Under the TCA	  	20
	 8.2
	  	Products Not Manufactured Under the TCA	  	21
	 8.3
	  	Supply Price	  	22
		
	 ARTICLE 9 PAYMENTS
	  	23
			
	 9.1
	  	Sales of Anti-IgE Products in East Asia	  	23
	 9.2
	  	Sales of Anti-IgE Products in the Rest of World	  	23
	 9.3
	  	Milestone Payments	  	24
	 9.4
	  	Credits for Milestone Payments and Legal Fees	  	24
	 9.5
	  	No Other Payments	  	25
	 9.6
	  	Reports	  	25
	 9.7
	  	Books	  	25
	 9.8
	  	Timing and Method of Payment; Currency	  	25
	 9.9
	  	Reconciliation	  	25
	 9.10
	  	Audit Rights	  	26
	 9.11
	  	Invoices and Documentation	  	27
	 9.12
	  	Taxes	  	27
	 9.13
	  	Interest	  	27
		
	 ARTICLE 10 DISPUTE RESOLUTION
	  	27
			
	 10.1
	  	Resolution of Disputes	  	27
	 10.2
	  	Arbitration	  	28
	 10.3
	  	*****	  	28
		
	 ARTICLE 11 INTELLECTUAL PROPERTY
	  	28
			
	 11.1
	  	Trademarks	  	28
	 11.2
	  	Ownership of Intellectual Property	  	28
	 11.3
	  	Infringement of Intellectual Property	  	28
	 11.4
	  	Third Party Rights	  	29
	 11.5
	  	Infringement of Third Party Patents	  	30
	 11.6
	  	No Implied License	  	30
		
	 ARTICLE 12 REPRESENTATIONS AND WARRANTIES
	  	30
			
	 12.1
	  	Disclaimer	  	30
		
	 ARTICLE 13 CONFIDENTIALITY
	  	31
			
	 13.1
	  	Company Information	  	31
	 13.2
	  	Academic and Scientific Publications	  	31

  

 ii 

					
	 ARTICLE 14 LIMITATIONS ON LIABILITY
	  	31
		
	 ARTICLE 15 FORCE MAJEURE
	  	31
		
	 ARTICLE 16 TERM AND TERMINATION
	  	32
			
	 16.1
	  	Term	  	32
	 16.2
	  	Termination Rights	  	32
	 16.3
	  	Required Termination of this Agreement	  	33
	 16.4
	  	No Termination for Breach	  	33
	 16.5
	  	Termination at Will	  	33
	 16.6
	  	Effect of Termination; Survival	  	34
		
	 ARTICLE 17 INDEMNIFICATION AND INSURANCE
	  	35
			
	 17.1
	  	Indemnities Generally	  	35
	 17.2
	  	Product Liability and Infringement Indemnity for ROW	  	35
	 17.3
	  	Litigation Costs and Damages	  	35
	 17.4
	  	Indemnification Procedure	  	36
	 17.5
	  	Insurance	  	36
		
	 ARTICLE 18 MISCELLANEOUS
	  	36
			
	 18.1
	  	Governing Law; Submission to Jurisdiction	  	36
	 18.2
	  	Notices	  	36
	 18.3
	  	No Third Party Beneficiary	  	37
	 18.4
	  	Integration and Conflict	  	37
	 18.5
	  	Amendments	  	38
	 18.6
	  	No Assignment and Binding Effect	  	38
	 18.7
	  	Headings	  	38
	 18.8
	  	Schedules Incorporated	  	38
	 18.9
	  	Severability	  	38
	 18.10
	  	No Waiver	  	38
	 18.11
	  	Counterparts	  	38
	 18.12
	  	Bankruptcy Acknowledgment	  	39
	 18.13
	  	Publicity	  	39
	 18.14
	  	No Partnership or Agency	  	40
	 18.15
	  	Further Assurances	  	40

  
 Schedule A – EA/ROW Financial
Appendix 
  

 iii 

 ANCILLARY DEVELOPMENT & LICENSING AGREEMENT 
  
 THIS ANCILLARY DEVELOPMENT & LICENSING AGREEMENT (together with Schedule
A hereto, the “Agreement”) is dated as of February 25, 2004 (the “Effective Date”), by and among Novartis Pharma AG, a company organized and existing under the laws of Switzerland (“Novartis”) and
Tanox, Inc. (formerly known as Tanox Biosystems, Inc.), originally a Texas corporation and reincorporated as a Delaware corporation (“Tanox”). (Each of Novartis and Tanox is referred to herein individually as a
“Party” and all are referred to collectively herein as the “Parties.”) 
  
 W I T N E S S E T H: 
  
 WHEREAS, Tanox and Ciba-Geigy Limited (“Ciba-Geigy”) entered into a certain Development and Licensing Agreement dated as of May 11, 1990
(the “Original D&L Agreement”), providing for cooperation in the research, development and commercialization of anti-IgE antibody-based treatments in humans for IgE-mediated diseases; and 
  
 WHEREAS, Genentech Inc., a Delaware corporation
(“Genentech”), Genentech International Limited, Tanox, and Ciba-Geigy entered into a certain Outline of Terms for Settlement of the Litigations among Genentech, Genentech International Limited, Tanox and Ciba-Geigy, dated as of July
8, 1996, relating to anti-IgE inhibiting antibodies (the “Outline of Terms”), which contemplates that the Parties will negotiate and enter into (a) detailed agreement(s) implementing and completing the terms contained in the Outline
of Terms; and 
  
 WHEREAS, Tanox and Ciba-Geigy entered into a
certain Supplemental Agreement dated as of July 8, 1996, which modified and amended the Original D&L Agreement (the “Supplemental Agreement”); and 
  
 WHEREAS, subsequent to the execution of the Original D&L Agreement, the Outline of Terms and the Supplemental Agreement,
Ciba-Geigy has been succeeded by Novartis with respect to the research, development, manufacture and commercialization of pharmaceutical specialty products and with respect to all the rights and obligations relevant to Ciba-Geigy under the Original
D&L Agreement, the Outline of Terms and the Supplemental Agreement, as a result of its merger with Sandoz Ltd.; and 
  
 WHEREAS, certain disputes have arisen between Novartis, Genentech and Tanox concerning their respective rights regarding anti-IgE inhibiting monoclonal
antibodies and certain lawsuits and arbitration proceedings have been initiated by the Parties to resolve certain of those disputes; and 
  
 WHEREAS, Novartis, Genentech and Tanox intend to enter into a Tripartite Cooperation Agreement (the “TCA”) for the purpose of resolving
those 

  

 
disputes, terminating such lawsuits and arbitration proceedings, implementing certain aspects of the Outline of Terms and cooperating with each other with
respect to the development and commercialization of Anti-IgE Antibodies and Anti-IgE Products (each as defined in the TCA) throughout the world on the terms and subject to the conditions set forth in such Tripartite Cooperation Agreement; and

  
 WHEREAS, the Parties intend this Agreement, together with
Schedule A hereto, to represent: (a) all aspects of the Original D&L Agreement related to Anti-IgE Antibodies and Anti-IgE Products in East Asia and the Rest of World (each as defined in the TCA); (b) Sections 1 and 2 of the Supplemental
Agreement; and (c) all bipartite aspects (as between Novartis and Tanox) of the Detailed Agreement envisaged by the Outline of Terms relating to the development and commercialization of Anti-IgE Antibodies and Anti-IgE Products in East Asia and the
Rest of World; and 
  
 WHEREAS, the Parties enter into this
Agreement for the purpose of cooperating with respect to the development and commercialization of Anti-IgE Antibodies and Anti-IgE Products in East Asia and the Rest of World on the terms and conditions set forth herein; and 
  
 WHEREAS, in connection with entering into this Agreement, Tanox and Novartis
shall, on the date hereof, amend and restate the Original D&L Agreement (such amended and restated D&L Agreement being the “Amended and Restated D&L Agreement”) such that, with effect from the date hereof, the Amended
and Restated D&L Agreement applies only to Potential Products (as defined in the Amended and Restated D&L Agreement) other than Anti-IgE Antibodies and Anti-IgE Products (each as defined in the TCA) and such that the Amended and Restated
D&L Agreement represents: (a) all aspects of the Original D&L Agreement related to such Potential Products; and (b) Section 3 of the Supplemental Agreement. 
  
 NOW, THEREFORE, in consideration of the following mutual promises and obligations, and for other good and valuable
consideration the adequacy and sufficiency of which is hereby acknowledged, the Parties hereto hereby agree as follows: 
  
 ARTICLE 1 
  
 DEFINITIONS 
  
 Unless otherwise expressly defined in this Agreement, capitalized terms used in this Agreement shall have the meanings set forth in the Tripartite Cooperation Agreement: 
  
 “Allocable Manufacturing Overhead” shall have the meaning set forth in the EA/ROW Financial Appendix.

  
 “Breaching Party” shall have the meaning set
forth in Section 16.4 herein. 
  
 “Cost of Goods”
shall have the meaning set forth within the “Fully Burdened Manufacturing Cost” definition in the EA/ROW Financial Appendix. 
  

 2 

 “Cost of Sales” shall have the meaning set forth in the EA/ROW Financial Appendix.

  
 “Develop” shall mean to develop, to use for
development purposes, or to conduct Clinical Trials, in each case in support of any Approval Application, including without limitation, any post-marketing clinical trial or Phase IV clinical trial intended to support expanded labeling or to satisfy
requirements of a Public Authority in connection with any Approval or Pricing Approval, or to the extent permitted under this Agreement or any Ancillary Agreement, have any of those things done, and “Development” and
“Developing” shall have a corresponding meaning. Notwithstanding the foregoing, unless otherwise expressly indicated, the term “Develop” shall exclude manufacturing development except with respect to the definition
of “Development Costs,” the activities contemplated by the “EA Development Plan” and for purposes of operation of the TanNov Committees with respect to any EA Development Plan (except as otherwise expressly set forth in Article
4). 
  
 “Development Costs” shall have the
meaning set forth in the EA/ROW Financial Appendix. 
  
 “Distribution/Warehousing Costs” shall have the meaning set forth in the EA/ROW Financial Appendix. 
  
 “Dispute” shall mean any dispute, controversy or claim arising on or after the Effective Date out of or in connection with this Agreement
or the Parties’ activities hereunder. 
  
 “EA
Commercialization Plan” shall have the meaning set forth in Section 4.4(a)(ii) herein. 
  
 “EA Development Plan” shall have the meaning set forth in Section 4.4(a)(i) herein. 
  
 “EA Manufacturing and Supply Plan” shall have the meaning
set forth in Section 4.4(a)(iii) herein. 
  
 “EA Finance
Sub-Committee” or “EA FSC” shall have the meaning set forth in Section 4.6(b) herein. 
  
 “EA Plans” shall mean such plans and budgets as may be developed and approved by the TanNov Committees hereunder in accordance with
Article 4 with respect to East Asia, including, without limitation, the EA Development Plan and the EA Commercialization Plan. 
  
 “EA/ROW Financial Appendix” shall mean the EA/ROW Financial Appendix attached as Schedule A hereto. 
  
 “Effective Date” shall have the meaning set forth in the
introductory paragraph of this Agreement. 
  

 3 

 “Excluded Costs” shall have the meaning set forth in the EA/ROW Financial Appendix.

  
 “Force Majeure Events” shall have the meaning
set forth in Article 15 herein. 
  
 “Fully Burdened
Manufacturing Cost” or “FBMC” shall have the meaning set forth in the EA/ROW Financial Appendix. 
  
 “General and Administrative Costs (East Asia)” shall have the meaning set forth in the EA/ROW Financial Appendix. 
  
 “Gross Profit (East Asia)” shall have the meaning set forth
in the EA/ROW Financial Appendix. 
  
 “Gross Sales (East
Asia)” and “Gross Sales (ROW)” shall have the meanings given thereto respectively as set forth in the EA/ROW Financial Appendix. 
  
 “Marketing Costs” shall have the meaning set forth in the EA/ROW Financial Appendix. 
  
 “Net Profits (East Asia)” or “Net Losses (East
Asia)” shall have the meanings given thereto respectively as set forth in the EA/ROW Financial Appendix.  
  
 “Net Sales”, “Net Sales (East Asia)” and “Net Sales (ROW)” shall have the meanings given thereto
respectively as set forth in the EA/ROW Financial Appendix. 
  
 “Non-JCA Anti-IgE Products” shall have the meaning set forth in Section 8.2. 
  
 “Other Operating Income/Expense” shall have the meaning set forth in the EA/ROW Financial Appendix. 
  
 “Outline of Terms” shall have the meaning set forth in the
recitals to this Agreement. 
  
 “Product Trade
Dress” shall mean the product trade dress and the distinctive appearance of primary and secondary packaging of each Anti-IgE Product in Finished Product form, including samples, selected pursuant to this Agreement and JCA (if applicable),
including the proprietary Anti-IgE Trademarks used in EA and the ROW in connection with any Anti-IgE Product. 
  
 “Required Third Party Rights” shall mean such Third Party intellectual property rights as are necessary for, or material to, the
Development, Manufacture or Commercialization of any Anti-IgE Antibody or Anti-IgE Product pursuant to this Agreement. 
  
 “Rest of World” and “ROW” shall mean any countries or territories other than the United States, Europe and East Asia.

  

 4 

 “Royalty Period” shall mean, on an Anti-IgE Product-by-Anti-IgE Product and
country-by-country basis, the period commencing on the first sale to a Third Party of each Anti-IgE Product in such country, and ending on the later of: (a) expiration of all Valid Claims of each of the Tanox Anti-IgE Patents which would be
infringed by the Manufacture, Development or Commercialization of such Anti-IgE Product in such country; and (b) the date which is ***** from Commercial Launch of such Anti-IgE Product in such country. 
  
 “Sales Costs (East Asia)” shall have the meaning set forth
in the EA/ROW Financial Appendix. 
  
 “Sales Returns and
Allowances (East Asia)” and “Sales Returns and Allowances (ROW)” shall have the meanings given thereto respectively as set forth in the EA/ROW Financial Appendix. 
  
 “Senior Officer” shall mean the Chief Executive Officers of
each of the Parties, or their respective designees in each case. 
  
 “TanNov Committee” means any committee, sub-committee or team contemplated by Article 4 of this Agreement. 
  
 “TanNov Joint Commercialization Committee” or “TanNov JCC” shall mean the Joint Commercialization Committee as described
in Section 4.4 herein. 
  
 “TanNov Joint Management
Committee” or “TanNov JMC” shall mean the Joint Management Committee as described in Section 4.3 herein. 
  
 “TanNov JCC Chairperson” shall have the meaning set forth in Section 4.4(d) herein. 
  
 “TanNov JMC Chairperson” shall have the meaning set forth in
Section 4.3(c) herein. 
  
 “Tanox Profit Share”
shall have the meaning set forth in the EA/ROW Financial Appendix. 
  
 “Term” shall mean the period beginning on the Effective Date and ending on the expiration of this Agreement as described in Section 16.1 herein or, if earlier, termination of this Agreement as set forth in Article 16.

  
 “Third Party” shall mean any Person other
than Novartis, Tanox or their respective Affiliates. 
  

 5 

 ARTICLE 2 
  

PURPOSE AND EFFECT OF THIS AGREEMENT 
  
 2.1 Outline of Terms and Original D&L Agreement. This Agreement, including Schedule A hereto, is intended by the Parties to represent (a) all
aspects of the Original D&L Agreement related to Anti-IgE Antibodies and Anti-IgE Products in East Asia and the Rest of World; (b) Sections 1 and 2 of the Supplemental Agreement; and (c) all bipartite aspects (as between Novartis and Tanox) of
the “Detailed Agreement” as described in Section 2.1 of the TCA envisaged by the Outline of Terms relating to the development and commercialization of Anti-IgE Antibodies and Anti-IgE Products in East Asia and the Rest of World. Concurrent
with the execution of this Agreement, the Parties are entering into: (i) the Tripartite Cooperation Agreement, together with Genentech, which, together with the Ancillary Agreements, is intended to represent all aspects of the Detailed Agreement and
to implement and complete such provisions of the Outline of Terms and to supercede the Outline of Terms; and (ii) the Amended and Restated D&L Agreement, which is intended to represent all aspects of the Original D&L Agreement relating to
Potential Products (as defined therein) other than Anti-IgE Antibodies and Anti-IgE Products and Section 3 of the Supplemental Agreement. The Amended and Restated D&L Agreement and this Agreement are together intended to supercede the Original
D&L Agreement and the Supplemental Agreement in their entireties. 
  
 2.2 Other Agreements. This Agreement, including Schedule A hereto, is intended by the Parties to complement the Tripartite Cooperation Agreement, the Amended and Restated D&L Agreement and the JCA (which agreements, as amended
and restated, remain in full force and effect). In the event of any inconsistency between the terms of this Agreement and the Tripartite Cooperation Agreement, the terms of the TCA shall prevail. In the event of any inconsistency between the
terms of this Agreement and the Amended and Restated D&L Agreement, the terms of this Agreement shall prevail with respect to the development and commercialization (as such terms are generally construed rather than as strictly defined hereunder)
of Anti-IgE Antibodies and Anti-IgE Products in East Asia and the Rest of World. 
  
 2.3 Costs. Each Party hereto shall bear all costs and expenditures incurred by it in connection with drafting and negotiation of this Agreement and any Ancillary Agreement or Related Agreement, including,
without limitation, attorney’s fees. 
  
 ARTICLE 3

  
 COOPERATION 
  
 3.1 Cooperation in EA Generally. Subject to the express rights and
obligations of each of the Parties in this Agreement, each of Novartis and Tanox (including, without limitation, through their respective members on the TanNov Committees) shall, and shall use commercially reasonable efforts to cause its relevant

  

 6 

 
Affiliates performing obligations hereunder to, cooperate in good faith in Developing and Commercializing Anti-IgE Antibodies and Anti-IgE Products in East
Asia in accordance with, and to the extent such Development and Commercialization complies with, the terms and conditions of this Agreement. 
  
 3.2 Commercially Reasonable Efforts. Subject to the express rights and obligations of each of the Parties in this Agreement, each of Novartis and
Tanox (including, without limitation, through their respective members on Committees) shall, and shall use commercially reasonable efforts to cause its relevant Affiliates performing obligations hereunder to, use Commercially Reasonable Efforts to
Develop, Manufacture (if applicable) and Commercialize Anti-IgE Products in East Asia and the Rest of World in accordance with this Agreement; provided, however, that: 
  
 (a) no Party shall be held in breach of its obligation to use Commercially Reasonable Efforts to the extent that such Party
is constrained from exercising such Commercially Reasonable Efforts because of the exercise by another Party of its voting rights pursuant to Article 4 or of any other rights pursuant to this Agreement; 
  
 (b) *****; 
  
 (c) *****; 
  
 (d) ***** 
  
 (d) *****. 
  
 3.3 ***** . *****. 
  
 3.4 Scope of Cooperation. This Agreement and the Parties’ cooperation hereunder shall apply only to Anti-IgE Antibodies and Anti-IgE Products,
and shall not extend to any other compounds, molecules or products. 
  
 3.5 Compliance With Legal Requirements. The Parties, and their respective Affiliates, shall perform their obligations under this Agreement, including any Development or Commercialization of Anti-IgE Antibodies or Anti-IgE Products
hereunder, in compliance with applicable Legal Requirements. No Party or any of its Affiliates shall, or shall be required to, undertake any activity under or in connection with this Agreement which violates, or which it believes, in good faith and
on the advice of counsel, may violate, any applicable Legal Requirements. ***** 
  
 3.6 Information Sharing. The provisions of Section 4.4 of the TCA shall apply to this Agreement as if set out in full in this Agreement. 
  

 7 

 ARTICLE 4 
  

GOVERNANCE 
  
 4.1 Governance For East Asia Generally. Subject to the express provisions of this Agreement, the Parties’ Manufacture, Development and
Commercialization of Anti-IgE Antibodies and Anti-IgE Products in East Asia, and their cooperation hereunder with respect thereto, will be subject to the governance, approval, direction, facilitation and oversight of the TanNov Committees described
in Sections 4.3-4.8 (inclusive) below. Without limiting the foregoing, the Parties acknowledge and agree that all decisions with respect to the selection of Anti-IgE Antibodies and Anti-IgE Products for Development and Commercialization in East
Asia, and the selection of indications for which particular Anti-IgE Antibodies and Anti-IgE Products shall be Developed and Commercialized in East Asia, shall be made through the TanNov Committees described below. 
  
 4.2 Governance For Rest of World. The Development and
Commercialization of Anti-IgE Antibodies and Anti-IgE Products in the Rest of World will be conducted by Novartis (and its relevant Affiliates) in its (or their) sole discretion subject to Novartis’ obligations to use Commercially Reasonable
Efforts under this Agreement with respect thereto. Tanox acknowledges and agrees that it shall have no right to participate in decisions relating to the Development or Commercialization of Anti-IgE Antibodies or Anti-IgE Products in the Rest of
World; provided, however, that *****: 
  
 (a) *****

  
 (b) ***** 
  
 Novartis shall provide to Tanox, through its members of the TanNov JCC, information as to:
(i) the nature of any ongoing or planned Clinical Trials for Anti-IgE Antibodies or Anti-IgE Products in the Rest of World, and the results thereof; (ii) the anticipated Launch dates for Anti-IgE Products in countries in the Rest of World; and (iii)
its sales expectations and sales results for the Rest of World. 
  
 4.3 The TanNov Joint Management Committee. 
  
 (a)
Functions of the TanNov JMC. Overall governance of the Parties’ cooperation hereunder with respect to East Asia and the Parties’ Development and Commercialization of Anti-IgE Antibodies and Anti-IgE Products in East Asia will be
approved, directed and facilitated by the TanNov JMC, which shall be established by the Parties to supervise the performance of the Parties hereunder with respect to those matters. The specific functions of the TanNov JMC within the foregoing scope
shall be determined by the TanNov JMC subject to the terms and conditions of this Agreement, but in any event shall include the following: 
  
 (i) review and approval of the EA Commercialization Plan and the EA Development Plan, each of which shall be recommended by the TanNov JCC
under Section 4.4(a) below and subject to TanNov JMC approval hereunder; 
  
 (ii) review and approval of any Non-JCA Anti-IgE Products or with respect to formulations specific to EA of Anti-IgE Products which are also Developed or Commercialized in Europe or the US, which EA Manufacturing and
Supply Plan shall be recommended by the TanNov JCC under Section 4.4(a) below and subject to TanNov JMC approval hereunder; 
  

 8 

 (iii) coordination of the Parties’ various functional representatives in developing
and executing EA Plans for Anti-IgE Products in East Asia in an effort to ensure consistency and efficiency; 
  
 (iv) resolving disputes among members of the TanNov JCC and identifying unresolved disputes between members of the TanNov JMC to the
Senior Officers of each of Novartis and Tanox, if applicable, for resolution in accordance with Article 10 of this Agreement; 
  
 (v) planning and coordinating cooperative efforts between the Parties and each of the TanNov Committees for East Asia; and 
  
 (vi) approving strategies for internal and external
communications by the Parties with respect to the Anti-IgE Products in East Asia. 
  
 No EA Plan shall be acted upon until it is approved by the TanNov JMC. 
  
 In addition, the TanNov JMC shall have the Dispute resolution functions described in Section 10.1 with respect to the ROW. 
  
 (b) Composition of the TanNov JMC. The TanNov JMC shall have members
appointed by each Party, all of which shall be senior executives of the Parties (or of a Party’s Affiliate) with an understanding of development, clinical, regulatory, manufacturing and marketing issues. As of the Effective Date, the TanNov JMC
shall be comprised of up to ***** members, with each Party being entitled to appoint up to ***** members to the TanNov JMC and with each Party having identified to the other in writing its initial members of the TanNov JMC. Each Party shall notify
the other Party of any change in the identities of its appointed members prior to making any such change. The total number of TanNov JMC members may be changed by unanimous vote of the TanNov JMC with the proviso that in all cases each Party shall
have the right to appoint an equal number of members. Each Party will use commercially reasonable efforts to limit changes in the identities of its representatives. A TanNov JMC member may not, concurrently with TanNov JMC membership, be a member of
the TanNov JCC or any subcommittee of the TanNov JCC (although a TanNov JMC member may participate in a non-voting capacity at any meetings of TanNov JCC or any subcommittee of the TanNov JCC provided that notice of such attendance has been provided
in advance). 
  
 (c) Chairperson of the TanNov JMC. The
TanNov JMC shall be chaired by a TanNov JMC Chairperson selected by Novartis from the TanNov JMC members appointed by Novartis. The responsibilities of the TanNov JMC Chairperson shall be determined by the TanNov JMC but shall in any event include
the following: (i) setting meeting agendas; (ii) calling emergency meetings of the TanNov JMC; (iii) coordinating presentation of TanNov JMC disputes that have been unresolved for ***** to the Parties’ respective Senior Officers pursuant to
Article 10 of this Agreement; and (iv) recording, preparing and, within a reasonable time, issuing minutes of the TanNov JMC meetings, which meeting minutes shall be submitted for approval of the members of the TanNov JMC. The TanNov JMC
Chairperson’s responsibilities and authority shall be limited to administrative matters and shall not include any right or responsibility to make decisions for, or otherwise act on behalf of, the TanNov JMC itself. 
  
 (d) Meetings of the TanNov JMC. The TanNov JMC shall meet as often as
the TanNov JMC determines to be necessary to ensure the effective 

  

 9 

 
implementation of this Agreement and the Parties’ cooperation hereunder, but in no event less than twice per calendar year, on such dates and at such
places to be unanimously agreed upon by the members of the TanNov JMC. Meetings of the TanNov JMC may be held in person or in any reasonable manner including without limitation, by telephone or video conference. Each Party shall bear its own costs
of participating in TanNov JMC meetings and such costs will not be reimbursable as part of costs and expenses to be shared hereunder. Decisions of the TanNov JMC shall be made*****. It is contemplated that a reasonable number of additional
representatives of the Parties may attend and participate in a non-voting capacity in the TanNov JMC meetings where such additional representatives are reasonably required to address specific issues to be discussed at such meeting of the TanNov JMC.
The procedures which will govern the operation of the TanNov JMC and its decision making process and the specific criteria to be used to resolve disputes as contemplated herein will be determined *****.  
  
 4.4 The TanNov Joint Commercialization Committee. 
  
 (a) Functions of the TanNov JCC; Preparation of EA Plans. The TanNov
JCC shall be established by the Parties for the purpose of reviewing, and recommending for approval by the TanNov JMC (as provided in Section 4.3(a)(i) above), an EA Commercialization Plan and an EA Development Plan (and, if applicable, an EA
Manufacturing and Supply Plan, as contemplated in Section 4.3(a)(ii) above), and overseeing the execution of those EA Plans approved by the TanNov JMC. 
  
 (i) The EA Development Plan, shall be prepared by Tanox, subject to review by, and revision at the direction of, the TanNov JCC, and shall
be subject to the approval of the TanNov JMC. The EA Development Plan shall comprise: (A) a detailed EA Plan (including without limitation, a detailed budget setting forth the total expenditures expected to be incurred during each quarter of the
upcoming year) for the Development (including manufacturing development) of Anti-IgE Products in each applicable Regulatory Jurisdiction for East Asia, and (B) a detailed EA Plan (including without limitation, a detailed budget setting forth the
total expenditures expected to be incurred during each quarter of the upcoming year) for regulatory affairs, including without limitation, determination of Approval Application filings of Anti-IgE Products in each applicable Regulatory Jurisdiction
for East Asia. 
  
 (ii) The EA Commercialization
Plan shall be prepared by Novartis, subject to review by, and revision at the direction of, the TanNov JCC, and shall be subject to the approval of the TanNov JMC. The EA Commercialization Plan shall comprise a detailed EA Plan (including without
limitation, a detailed budget setting forth the total expenditures expected to be incurred during each quarter of the upcoming year) for the Commercialization of Anti-IgE Products in each applicable Regulatory Jurisdiction for East Asia. 

 
 (iii) The EA Manufacturing and Supply Plan shall be
prepared by the Party nominated by the TanNov JMC, subject to review by, and revision at the direction of, the TanNov JCC, and shall be subject to the approval of the TanNov JMC. Notwithstanding any other provision of this Agreement, such EA
Manufacturing and Supply Plan shall be consistent with the corresponding 

  

 10 

 
Manufacturing and Supply Plan approved by the applicable Committees pursuant to the TCA. The EA Manufacturing and Supply Plan shall comprise a detailed EA
Plan (including without limitation, a detailed budget setting forth the total expenditures expected to be incurred during each quarter of the upcoming year) for the Manufacture (excluding manufacturing development, which for the avoidance of doubt
shall be included in the EA Development Plan) and supply of Non-JCA Anti-IgE Products and/or formulations specific to EA of Anti-IgE Products which are also Developed or Commercialized in Europe or the US. 
  
 (b) Other Functions of the TanNov JCC. In addition to the duties set
forth in Section 4.4(a) above, the TanNov JCC’s responsibilities will include: 
  
 (i) monitoring compliance with all EA Plans (including but not limited to the EA Development Plan and EA Commercialization Plan);

  
 (ii) reviewing and approving all protocols,
including concept sheets and protocol summaries, for studies in East Asia involving any Anti-IgE Product; provided, however, that such protocols are consistent with the EA Development Plan; 
  
 (iii) overseeing, reviewing and approving studies for
Anti-IgE Products for East Asia in accordance with the EA Development Plan, including protocols, specifications, timelines and priorities; 
  
 (iv) overseeing, monitoring and coordinating all Approval Applications; regulatory actions, communications and filings with, and
submissions to, including filings and submission of supplements and amendments thereto, Public Authorities in East Asia with respect to the Anti-IgE Products; 
  

(v) facilitating the exchange of all regulatory information and data necessary or useful to be exchanged hereunder for purposes of the
conduct of clinical studies, preparation or filing of Approval Applications or other regulatory submissions, to meet safety reporting requirements, or otherwise in East Asia; 
  
 (vi) reviewing and overseeing the implementation of positioning and market strategies for East Asia, so long
as the foregoing are consistent with the EA Commercialization Plan and the EA Development Plan, including without limitation, making decisions to seek or include any new indication for an Anti-IgE Product in East Asia; 
  
 (vii) developing strategies with respect to, and planning
and coordinating, external communications by the Parties with respect to Commercialization and Development of Anti-IgE Products in East Asia; and 
  
 (viii) approving actual calendar year spending by any Party that exceeds the total calendar year approved budget for that Party in any EA
Plan (including all approved budget modifications) by ***** as shareable costs under the collaboration (with such amounts to be approved or disapproved as shareable costs by the unanimous approval of Tanox and Novartis). 
  
 (c) Composition of the TanNov JCC. The TanNov JCC shall have members
appointed by each of the Parties, provided that each of the Parties must select as 

  

 11 

 
one (1) of its appointments to the TanNov JCC each of the following: (i) its Alliance Manager for the TCA; (ii) a representative of such Party with expertise
in development and regulatory matters; and (iii) a representative of such Party with expertise in commercialization matters. As of the Effective Date, the TanNov JCC shall be comprised of up to ***** members, with each Party being entitled to
appoint up to ***** members and with each Party having identified to the other in writing its initial members of the TanNov JCC. Each Party shall notify the other Parties of any change in the identities of its appointed members prior to making any
such change. The total number of TanNov JCC members may be changed by the TanNov JMC with the proviso that in all cases each Party shall be entitled to appoint an equal number of members from each Party. Each Party will use commercially reasonable
efforts to limit changes in the identities of its representatives. A TanNov JCC member may not, concurrently with TanNov JCC membership, be a member of the TanNov JMC. 
  
 (d) Chairperson of the TanNov JCC. The TanNov JCC shall be chaired for one (1) year terms, commencing April
1st of each year, by a TanNov JCC Chairperson selected from one of the Alliance Managers appointed by either Tanox
or Novartis. Such TanNov JCC Chairperson shall be selected for each successive year by either Tanox or Novartis so that each of them will have the right to select the TanNov JCC Chairperson in alternate years. The responsibilities of the TanNov JCC
Chairperson shall be determined by the TanNov JCC but shall in any event include the following: (i) setting meeting agendas; (ii) calling emergency meetings of the TanNov JCC; (iii) coordinating presentation of disputes between members of the TanNov
JCC that have been unresolved for ***** to the TanNov JMC pursuant to Section 4.4(e) below; and (iv) recording, preparing and, within a reasonable time, issuing minutes of the TanNov JCC meetings, which meeting minutes shall be submitted for
approval by the members of the TanNov JCC. The TanNov JCC Chairperson’s responsibilities and authority shall be limited to administrative matters and shall not include any right or responsibility to make decisions for, or otherwise act on
behalf of, the TanNov JCC itself. 
  
 (e) Meetings. The
TanNov JCC shall meet as often as the TanNov JCC determines to be necessary to meet its objectives under this Agreement or as directed by the TanNov JMC but in no event less than twice every calendar year, or more often as needed, on such dates and
at such places as are agreed upon between Tanox and Novartis. Meetings of the TanNov JCC may be held in person or in any reasonable manner, including, without limitation, by telephone or video conference. Each Party shall bear its own costs of
participating in TanNov JCC meetings and such costs will not be reimbursable as part of costs and expenses to be shared hereunder. Decisions of the TanNov JCC shall be made *****. 
  
 4.5 Alliance Management Representatives. Each Alliance Manager shall be primarily responsible for facilitating the
flow of information and otherwise promoting communications and collaboration within and among the TanNov Committees, between the Parties and internally within the Parties. Each Alliance Manager will also be responsible for: 
  
 (a) facilitating coordination among the various functional representatives of
their appointing Party; 
  

 12 

 (b) providing single-point communication for seeking consensus both internally within the respective
Party’s organization and together regarding key strategy and EA Plan issues, as appropriate, including facilitating review of external corporate communications in accordance with Section 18.13 of this Agreement and Section 15.2 of the TCA;
and 
  
 (c) raising and facilitating the resolution of
cross-country, cross-Party and/or cross-functional disputes to the appropriate Committee or forum (including, but not limited to the TanNov JMC or TanNov JCC, as appropriate), in a timely manner. 
  
 4.6 TanNov JCC Sub-Committees. 
  
 (a) The TanNov JCC may from time to time establish such sub-committees as it
considers appropriate to facilitate its responsibilities with respect to the Parties’ cooperation under this Agreement in so far as it applies with respect to the Parties’ Development and Commercialization of Anti-IgE Antibodies and
Anti-IgE Products in East Asia; provided, however, that the EA FSC described in paragraph (b) below shall in any event be maintained at all times during the Term of this Agreement. Unless otherwise agreed between the Parties, the
number of members of such sub-committees or any others appropriately created by the TanNov JCC shall rest in the TanNov JCC’s discretion; provided, however, that each Party shall have the right to appoint an equal number of
representatives to each such sub-committee. The sub-committees of the TanNov JCC shall meet as frequently as they determine to be necessary to accomplish their objectives, or as required by the TanNov JCC. Decisions of sub-committees of the TanNov
JCC shall be made *****. Unless otherwise provided herein, the procedures and operation of all TanNov JCC sub-committees shall be determined by such sub-committees. 
  
 (b) An EA Finance Sub-Committee (the “EA FSC”) shall be established as an informal sub-committee of the
TanNov JCC and tasked with supporting the TanNov JCC, the TanNov JMC and the Parties with respect to accounting and financial determinations relating to cost and profit sharing hereunder and other financial matters, all in accordance with the EA/ROW
Financial Appendix and the terms of this Agreement. The EA FSC shall have at least ***** members, and each Party shall appoint an equal number of members to the EA FSC. The members of the EA FSC shall be responsible for administering operations
under the EA/ROW Financial Appendix in accordance with the provisions thereof and the terms of this Agreement including, without limitation, advising the TanNov JCC and the TanNov JMC with respect to the following matters: (i) actual financial
results; (ii) forecasts; (iii) budgets and long range plans; (iv) inventory levels; (v) Net Profits (East Asia) and Net Losses (East Asia) and the calculation thereof; and (vi) other financial matters arising under the EA/ROW Financial Appendix or
otherwise relating to the Parties’ cooperation in East Asia hereunder, including, without limitation, each Party’s methodologies for charging costs for determination of actual financial results, forecasts, budgets and long range plans and
the results of applying such methodologies. The EA FSC shall (I) coordinate the presentation to the TanNov JCC of disputes to be resolved in accordance herewith arising between the Parties under the EA/ROW Financial Appendix for resolution in
accordance with this Agreement; and (II) develop and analyze proposals for reasonably amending and revising the provisions of the EA/ROW Financial Appendix and this Agreement 

  

 13 

 
relating to accounting and reporting matters so as to permit the Parties (and their relevant Affiliates) to obtain proper and advantageous tax and accounting
treatment, subject to all applicable Legal Requirements, and each Party agrees to reasonably cooperate in such reasonable revisions and amendments to the extent such revisions and amendments do not prejudice or negatively affect such Party (or its
relevant Affiliates) financially or otherwise with respect to the terms of the EA/ROW Financial Appendix in effect on the Effective Date. For the avoidance of doubt, all revisions and modifications to the EA/ROW Financial Appendix require the
written consent of both Parties. Notwithstanding the foregoing, no determination of the FSC shall limit a Party’s rights to audit the books and records of the other Party under Section 9.10 and no approval of any financial reports by the FSC
shall limit the determination of any such audit. 
  
 4.7
Disclosure of Information. The TanNov Committees shall provide the Parties (through their member(s) of the applicable Committee) with copies of all information, documents, presentations and reports submitted to or issued by such TanNov
Committee. Without limiting the generality of the foregoing, each Party shall provide to the other Party (to the extent not already received by such other Party through their member(s) of the applicable Committee) any information, documents,
presentations or reports submitted by the Party to, or received by the Party from, such TanNov Committee. In no event shall a Party be required to provide copies of privileged or attorney-work-product information, documents, presentations or reports
that are not actually submitted to or issued by a TanNov Committee. The provisions of this Section 4.7 shall be subject to Section 5.10(b) of the TCA as if such section were reproduced hereunder. 
  
 4.8 Certain Limitations on TanNov Committees. For the avoidance of
doubt, approval from the TanNov JMC or any other TanNov Committee is not required before any Party can avail itself of the Dispute resolution procedures hereunder with respect to any Dispute or otherwise seek redress or resolution of a given Dispute
in accordance with Article 10 of this Agreement. Notwithstanding any of the foregoing to the contrary, no TanNov Committee shall have the authority or ability to amend the express provisions of this Agreement. 
  
 ARTICLE 5 
  
 DEVELOPMENT 
  
 5.1 Development of Anti-IgE Products Generally. The Parties acknowledge and agree that any or all Anti-IgE Antibodies and Anti-IgE Products are
available for Development, and may be Developed, in East Asia and the Rest of World solely pursuant to this Agreement. As set forth in Article 4, all decisions with respect to the selection of Anti-IgE Antibodies and Anti-IgE Products for
Development and Commercialization in East Asia, and the selection of indications for which particular Anti-IgE Antibodies and Anti-IgE Products shall be Developed and Commercialized in East Asia, shall be made through the TanNov Committees described
in this Agreement. Tanox acknowledges and agrees that all decisions with respect to the selection of Anti-IgE Antibodies and Anti-IgE Products for Development and Commercialization in the 

  

 14 

 
Rest of World, and the selection of indications for which particular Anti-IgE Antibodies and Anti-IgE Products shall be Developed and Commercialized in the
Rest of World, shall be made by Novartis in its sole discretion; provided, however, that, as set forth in Section 4.2 above, Novartis shall consult with Tanox, through the applicable TanNov Committee, regarding its plans for, and
activities with respect to, the Development of Anti-IgE Antibodies and Anti-IgE Products in the ROW. 
  
 5.2 Development in East Asia. 
  
 (a) Tanox shall have the primary responsibility for planning and conducting such Development activities for East Asia relating to Anti-IgE Antibodies or
Anti-IgE Products as are agreed by the TanNov JMC, at the direction of and under the oversight of the TanNov JMC and in accordance with applicable EA Plans. Novartis shall assist and conduct such additional Development activities for East Asia
relating to Anti-IgE Antibodies or Anti-IgE Products as are agreed by the TanNov JMC, at the direction of and under the oversight of the TanNov JMC and in accordance with applicable EA Plans. Subject to the foregoing, each Party’s
responsibilities with respect to such Development in East Asia, and EA Plans relating thereto, will be determined by the TanNov JMC. Development activities in East Asia shall be subject to review and approval by the TanNov JMC as set forth in
Article 4 above, and protocols for Clinical Trials and other studies with respect to any Anti-IgE Antibody or Anti-IgE Product in East Asia shall be subject to review and approval by the TanNov JCC and TanNov JMC. 
  
 (b) Subject to the terms of this Agreement, Novartis, as official holder of
the Approvals for Anti-IgE Products in East Asia, shall have primary responsibility for planning and conducting, with input from and in consultation with Tanox, all post-marketing clinical trials or Phase IV clinical trials intended to support
expanded labeling or required to satisfy requirements imposed by a Public Authority in connection with any Approval of Anti-IgE Products in East Asia. The TanNov JCC shall decide, subject to TanNov JMC approval, which Party (or in the case of
Novartis, its Affiliate designee) has primary responsibility for planning and conducting Phase IV clinical trials (other than any post-marketing clinical trial or Phase IV clinical trial intended to support expanded labeling or required to satisfy
requirements imposed by a Public Authority in connection with any Approval). The TanNov JMC will determine which of Novartis (or its Affiliate designee) or Tanox shall have the primary responsibility for planning and conducting all other clinical
trials of Anti-IgE Products in East Asia. 
  
 (c) *****

  
 5.3 Development in ROW. Novartis shall be responsible
for all Development activities relating to Anti-IgE Antibodies or Anti-IgE Products in the Rest of World, and such activities shall be conducted in Novartis’ sole discretion subject to its obligation to use Commercially Reasonable Efforts with
respect thereto; provided, however, that Novartis shall consult with Tanox, through the applicable TanNov Committee, regarding its plans for, and activities with respect to, the Development of Anti-IgE Antibodies and Anti-IgE Products
in the ROW. All Development Costs incurred by Novartis in Developing Anti-IgE Products for the Rest of World *****. 

  

 15 

 
Tanox shall have no rights or obligations with respect to the Development of Anti-IgE Antibodies or Anti-IgE Products in ROW. 
  
 5.4 Information Sharing. Novartis agrees to exercise its rights under
Section 6.2 of the JCA as reasonably appropriate to plan and implement Development activities hereunder in accordance with this Article 5. 
  
 ARTICLE 6 
  
 REGULATORY ACTIVITIES 
  
 6.1 Regulatory Development Activities in East Asia. 
  
 (a) Generally. Subject to the remainder of this Section 6.1, each Party’s responsibilities with respect to regulatory Development activities regarding Anti-IgE Products in East Asia, and EA Plans relating
thereto, will be as determined by the TanNov JMC. Each Party agrees to use Commercially Reasonable Efforts to pursue such regulatory Development activities for obtaining Approval and Pricing Approval of any Anti-IgE Product(s) in East Asia and all
such activities shall be conducted in accordance with applicable EA Plan(s) approved by the TanNov JMC. 
  
 (b) Approvals for Anti-IgE Products in East Asia. Novartis or one or more Novartis-designated Affiliates shall be solely responsible for and shall
use Commercially Reasonable Efforts to apply for, obtain and maintain any Approvals and any other licenses, permits, approvals or registrations as may be required by any relevant Public Authority for Manufacturing or Commercializing Anti-IgE
Products in East Asia. Unless otherwise required by Legal Requirements, Novartis, or its designee, will be exclusively responsible for complying with all regulatory requirements and maintaining all government agency contacts relating to Anti-IgE
Products in East Asia. Such activities shall include maintaining and updating any Approvals, developing and submitting Approval Applications for new indications (if any, and after approval by the TanNov JCC and TanNov JMC), reporting of any adverse
incidents or drug reactions to the Public Authority in any Regulatory Jurisdiction in East Asia and filing the appropriate Public Authority in a Regulatory Jurisdiction in East Asia of any Promotional Materials and other materials necessary to
comply with Legal Requirements. Novartis, or its designee, will hold any Approvals (including any licenses or marketing approvals) for Anti-IgE Products. Tanox agrees that it shall use Commercially Reasonable Efforts to cooperate with Novartis, or
its designee, to obtain and maintain the effectiveness of any Approvals for Anti-IgE Products in East Asia and any other Approvals obtained in East Asia in connection with the performance of this Agreement, including by providing materials, Company
Information and necessary personnel in connection with regulatory approval functions. Novartis shall promptly notify Tanox or its designee of any meetings or communications between Novartis and any Public Authority of a Regulatory Jurisdiction in
East Asia, and Tanox or its designee shall be entitled to attend such meetings and review and comment upon any such communications, including without limitation, draft documents, meeting materials, letters and submissions to such Public Authorities,
provided, however that Novartis’ obligations in this respect shall only extend to material activities. 
  

 16 

 (c) Anti-IgE Product Recall in East Asia. Novartis shall observe at all times Legal Requirements
in order to maintain an effective system for the recall from the market of any Anti-IgE Product in East Asia. Notwithstanding anything herein to the contrary, if Novartis deems it necessary to initiate a recall (as defined in Section 8.2(b) of the
TCA) of an Anti-IgE Product in East Asia, it shall notify the TanNov JCC and Tanox using reasonable notice under the circumstances of such intended recall and allow an appropriate time, to the extent practicable and subject to the following
sentence, for Tanox and Novartis to discuss and agree on such intended recall. In the event that agreement cannot be reached on initiating the recall within *****, the Parties shall immediately present the issue for determination by the Senior
Officers; provided, however, that if either Party notifies the other Party that it reasonably believes that any such recall may involve a serious health risk, then the Parties will attempt to reach agreement on whether to initiate the
recall within *****, failing which they shall immediately present the issue for determination by the Senior Officers. As the Party that is the Approval holder, Novartis shall be responsible for the recall of the Anti-IgE Product in East Asia, *****.
Tanox shall not take any action contrary to the recall and shall reasonably cooperate such that it does not hinder the activities of Novartis in initiating the recall. 
  
 6.2 Regulatory Development Activities in the Rest of World. 
  
 (a) Approvals for Anti-IgE Products in the Rest of World. Novartis
shall have the exclusive right to undertake regulatory Development activities required to obtain Approvals of Anti-IgE Products in the Rest of World and shall retain exclusive authority and responsibility for complying with all regulatory
requirements relating to Anti-IgE Products in the Rest of World. Without limiting the foregoing, Novartis shall be responsible for, and shall use Commercially Reasonable Efforts in, obtaining, maintaining and updating all required Approvals for
Anti-IgE Products in Rest of World, including, without limitation: (i) filing all Approval Applications and supporting documentation necessary for obtaining Approvals in the Rest of World; (ii) maintaining all contacts with Public Authorities
responsible for granting such Approvals in the Rest of World; and (iii) reporting any adverse drug reactions to such Public Authorities in the Rest of World. 
  
 (b) Anti-IgE Product Recall in the Rest of World. Novartis shall observe at all times Legal Requirements in order to maintain an effective system
for the recall from the market of any Anti-IgE Product in the Rest of World. Notwithstanding anything herein to the contrary, if Novartis deems it necessary to initiate a recall (as defined in Section 8.2(b) of the TCA) of an Anti-IgE Product in the
Rest of World, it shall notify Tanox using reasonable notice under the circumstances of such intended recall and allow an appropriate time, to the extent practicable and subject to the following sentence, for Tanox and Novartis to discuss such
intended recall. As the Party that is the Approval holder, Novartis shall be responsible for the recall of the Anti-IgE Product in the Rest of World. Tanox shall not take any action contrary to the recall and shall reasonably cooperate such that it
does not hinder the activities of Novartis in initiating the recall. 
  

 17 

 6.3 Regulatory Development Information Sharing and Safety Management. 
  
 (a) The Parties acknowledge and agree that the provisions of Sections 8.5(a)
and (b) of the TCA shall apply with respect to the sharing of regulatory Development information and the exchange of adverse event reports and safety information associated with Anti-IgE Products. Without limiting the Parties’ respective
obligations thereunder, the Parties shall act in accordance with the provisions and specifications of the Safety Addendum (as defined in Section 8.5 of the TCA) in reporting, without delay, to each other, or their respective designees, adverse
events or drug reactions it becomes aware of to ensure compliance with regulatory reporting obligations with respect to any Approval or Approval Application for an Anti-IgE Antibody or Anti-IgE Product. 
  
 (b) As set forth in Section 8.5(b) of the TCA, during the Term of this
Agreement, each Party shall notify the other and the TanNov JCC immediately of any information received regarding any threatened or pending action by any Public Authority which may affect the safety, efficacy or other labeling claims of any Anti-IgE
Product. Upon receipt of any such information, the Parties hereto shall discuss such information and possible actions with respect thereto in East Asia and the Rest of World. The TanNov JCC shall determine a procedure for taking appropriate action
in East Asia, and Novartis shall determine a procedure for taking appropriate action in the Rest of World. Notwithstanding the foregoing, Novartis, as the Approval holder for Anti-IgE Products in each country or regulatory jurisdiction in East Asia
and the Rest of World, shall have the sole right and responsibility for communicating and reporting adverse experiences to health authorities in each such country or jurisdiction. Notwithstanding the foregoing, nothing contained herein shall be
construed as restricting any Party’s right to make a timely report of such matter to any Public Authority or take other action that it deems to be appropriate or required by Legal Requirements. 
  
 ARTICLE 7 
  
 COMMERCIALIZATION 
  
 7.1 Commercialization in East Asia. 
  
 (a) All Anti-IgE Products selected by the Parties for Development for East Asia hereunder and Approved for marketing in East Asia, shall be Commercialized
in East Asia exclusively by Novartis in accordance with applicable EA Plans hereunder and subject to the oversight of the TanNov JMC, and Novartis shall use Commercially Reasonable Efforts to Commercialize such Anti-IgE Products. 
  
 (b) All Net Profits (East Asia) and Net Losses (East Asia) for Anti-IgE
Products for East Asia shall be ***** in accordance with the EA/ROW Financial Appendix. 
  

 18 

 7.2 Commercialization in the Rest of World. 
  
 (a) Novartis shall be exclusively responsible for, and shall use Commercially
Reasonable Efforts with respect to, the Commercialization in the Rest of World of Anti-IgE Products selected by Novartis for Development for the Rest of World and Approved for marketing in the Rest of World; provided, however, that, as
set forth in Section 4.2 above, Novartis shall discuss with Tanox, through the applicable TanNov Committee, its general Commercialization activities relating to Anti-IgE Antibodies and Anti-IgE Products in the ROW. 
  
 (b) All costs and expenses associated with Commercialization of Anti-IgE
Products in the Rest of World shall be *****. 
  
 7.3 Product
Trade Dress in East Asia and Rest of World. Novartis will be responsible for developing and adopting draft Product Trade Dress for inclusion in any Approval Application in East Asia and the Rest of World. Product Trade Dress in East Asia and the
Rest of World will, in all circumstances during the Term of this Agreement, unless otherwise agreed by the Parties in writing: (i) list Novartis (in appropriate capacities); (ii) list the applicable Party (either directly or through its Affiliate)
or Genentech, as manufacturer if required by Legal Requirements; and (iii) list Novartis (or its designee) as owner of the Anti-IgE Trademarks, in each case subject to all Legal Requirements. Without limiting the foregoing, Novartis may, at its
option, have its logo included on all Product Trade Dress for East Asia and the Rest of World and Promotional Materials for East Asia and the Rest of World (including, without limitation, package inserts), subject to Legal Requirements. In addition,
subject to applicable Legal Requirements, Novartis shall reasonably consider including Tanox’s name on Product Trade Dress for Anti-IgE Products in East Asia, which inclusion shall be in a form mutually agreed between the Parties. 

 
 7.4 Preparation and Review of Promotional Materials in East Asia and
the Rest of World. Novartis shall develop Promotional Materials and/or programs, product management, market research and any other marketing activity in respect of Anti-IgE Product in East Asia and the Rest of World in its sole discretion;
provided, however, that Tanox shall be entitled to review and comment upon proposed Promotional Materials for East Asia. 
  
 7.5 Anti-IgE Product Marketing and Distribution in East Asia and the Rest of World. Novartis (itself or through its Affiliates and designated Third
Parties), shall have the exclusive right to market or have marketed Anti-IgE Products in East Asia (in accordance with applicable EA Plans (including budgets) approved by the applicable TanNov Committee(s)) and the Rest of World and shall
exclusively perform or have performed all marketing, distribution and sales support functions relating to Anti-IgE Products in East Asia and the Rest of World. Such functions shall include processing and invoicing all Third Party customers for
Anti-IgE Product orders received by the Parties, maintaining appropriate storage facilities for Anti-IgE Products, and providing for the delivery of Anti-IgE Products from appropriate warehouse or storage facilities to all Third Party customers.
Novartis and its Affiliates shall further have the right to enter into 

  

 19 

 
arrangements as it in its sole discretion deems appropriate with any one or more Third Parties regarding the marketing of Anti-IgE Products in East Asia and
the Rest of World, including without limitation, through co-promotion or co-marketing, subject, with respect to East Asia, to the applicable EA Commercialization Plan. 
  
 7.6 Booking of Sales in East Asia and the Rest of World. Novartis shall invoice and book as sales of its own product
all sales of Anti-IgE Products in East Asia and the Rest of World. Novartis shall appropriately record all sales of Anti-IgE Products in East Asia and the Rest of World in accordance with the EA/ROW Financial Appendix. 
  
 7.7 Sales Force in East Asia and the Rest of World. Novartis shall be
responsible (itself or through an Affiliate or Third Party) for maintaining an experienced sales force capable of effectively detailing Anti-IgE Products in countries in East Asia (in accordance with applicable EA Plans (including budgets) approved
by the applicable TanNov Committee(s)) and the Rest of World selected by Novartis.  
  
 7.8 Anti-IgE Product Samples in East Asia and the Rest of World. The Parties agree that in the event that a program of providing samples of any Anti-IgE Product to doctors, hospitals and other potential
customers at no charge is initiated in East Asia or the Rest of World, neither they nor their Affiliates shall resell (or otherwise use other than as contemplated herein) any Anti-IgE Products provided for sampling purposes. In such event, Novartis
will establish an appropriate policy regarding samples and sample accountability that satisfies Legal Requirements. 
  
 7.9 Pricing and Pricing Approvals in East Asia and the Rest of World. Subject to Section 3.5, pricing of Anti-IgE Products in East Asia, including
without limitation, ranges and general strategies for pricing changes, reimbursements and discounts or rebates, shall be set forth in the EA Commercialization Plan. Pricing of Anti-IgE Products the Rest of World, including without limitation, the
timing of pricing changes, reimbursement strategies and the offering of discounts or rebates, shall be determined by Novartis in its sole discretion. In those countries in East Asia and the Rest of World where a Pricing Approval is required or
determined by Novartis to be desirable, Novartis shall be solely responsible for seeking and obtaining such Pricing Approval. Tanox shall provide Novartis (or its Affiliates) with any reasonable assistance required by Novartis for the purpose of
obtaining such Pricing Approvals. 
  
 7.10 Customer
Service. Novartis shall be responsible for all customer service activities relating to Anti-IgE Products in East Asia and the Rest of World. 
  
 ARTICLE 8 
  
 MANUFACTURING 
  
 8.1 Products Manufactured Under the TCA. With respect to Anti-IgE Antibodies or Anti-IgE Products Developed or Commercialized hereunder, the provisions of Article 10 of the TCA shall apply with respect to the
Manufacture and supply of such 

  

 20 

 
Anti-IgE Antibody or Anti-IgE Product if it is then being Developed for or Commercialized in the US or Europe. Novartis and, if applicable, Tanox, shall
reasonably take into account the supply requirements of Anti-IgE Antibodies and Anti-IgE Products for East Asia and the ROW hereunder in connection with their respective actions under the TCA with respect to Manufacturing of such Anti-IgE Products.
For the avoidance of doubt, ***** and that portion of the Manufacturing payments made to Tanox under Section 11.6(b) of the TCA which is allocable to East Asia (as determined under the Financial Appendix to the TCA) shall be included in the
calculation of Net Profits (East Asia) and Net Losses (East Asia) as provided for in the EA/ROW Financial Appendix. 
  
 8.2 Products Not Manufactured Under the TCA. With respect to Anti-IgE Antibodies or Anti-IgE Products Developed or Commercialized hereunder, which
are not then being Manufactured for Development or Commercialization in the US or Europe (such Anti-IgE Products being “Non-JCA Anti-IgE Products”): 
  
 (a) Without limiting any of the rights and obligations of the parties to the TCA, Novartis and Tanox (to the extent each is
obligated to Manufacture and supply under this Section 8.2) agree that they shall use Commercially Reasonable Efforts, through the mechanisms set forth in this Agreement (including through an EA Manufacturing and Supply Plan approved by the TanNov
JMC) and any Manufacturing and Supply Agreement(s), to ensure that an adequate supply of Non-JCA Anti-IgE Products is available to meet Clinical Requirements and Commercial Requirements therefor in East Asia and, if applicable, the ROW. The
Parties’ specific obligations and responsibilities with respect to Manufacture and supply of Clinical Requirements and Commercial Requirements of Non-JCA Anti-IgE Product shall be as set forth in this Section 8.2, the Manufacturing and Supply
Agreements and any approved EA Manufacturing and Supply Plan (provided, however, that in no event shall any EA Manufacturing and Supply Plan modify or amend any provision of this Agreement or any Manufacturing and Supply Agreement or
impose a new obligation on any Party without its consent); 
  
 (b)
the costs of any Manufacturing or process development required with respect for the Manufacture of any Non-JCA Anti-IgE Products ***** as set forth in the EA/ROW Financial Appendix; 
  
 (c) to the extent that it is Manufacturing any Non-JCA Anti-IgE Product as provided in this Section 8.2, each Party shall
*****; 
  
 (d) the TanNov JMC shall have the responsibility and
authority to allocate available supplies of Non-JCA Anti-IgE Products between different markets in East Asia and, if applicable, the ROW on a basis consistent with the principle of *****; 
  
 (e) Without limiting any of the rights and obligations of the parties to the TCA: (i) Tanox shall Manufacture supplies of
Non-JCA Anti-IgE Product(s) which include an Anti-IgE Antibody originally identified and synthesized by Tanox (such Non-JCA Anti-IgE Product(s) being “Tanox Non-JCA Anti-IgE Product(s)”) required for 

  

 21 

 
pre-clinical and Phase I and Phase II (excluding any Phase II(b)) clinical trials pursuant to an EA Development Plan and budget approved by the TanNov JMC;
and (ii) Novartis (itself or through an Affiliate) shall Manufacture supplies of Non-JCA Anti-IgE Product(s) other than Tanox Non-JCA Anti-IgE Product(s) required for pre-clinical and Phase I and Phase II (excluding any Phase II(b)) clinical trials
pursuant to an EA Development Plan and budget approved by the TanNov JMC. Such pre-clinical and Clinical Requirements shall be supplied at *****; 
  
 (f) in the event that Tanox desires to Manufacture and supply all or some portion of a given Tanox Non-JCA Anti-IgE Product as required for Phase II(b)
and Phase III clinical Development and Commercialization in East Asia and ROW, it shall *****. 
  
 (g) In the event that Tanox does not Manufacture and supply such Tanox Non-JCA Anti-IgE Product required for post-Phase II clinical trials and Commercialization as provided for under (a) above, without limiting any of
the rights and obligations of the parties to the TCA, Novartis shall have the right and obligation to Manufacture and supply (itself or through an Affiliate), or procure the supply of, the post-Phase II Development and Commercial Requirements for
such Tanox Non-JCA Anti-IgE Product for East Asia and the ROW, in accordance with Sections 8.2(g) and (h) of this Agreement. Without limiting any of the rights and obligations of the parties to the TCA, Novartis shall have the right and obligation
to Manufacture and supply (itself or through an Affiliate), or procure the supply of, the post-Phase II Development and Commercial Requirements for any Non-JCA Anti-IgE Product for East Asia and the ROW, in accordance with Sections 8.2(g) and (h) of
this Agreement. All such Non-JCA Anti-IgE Products shall be supplied by Novartis at *****; 
  
 (h) In the event Novartis determines or by default has the right and obligation to Manufacture and supply any Tanox Non-JCA Anti-IgE Product hereunder, and in consideration for Tanox waiving its right to Manufacture
50% of Commercial Requirements of such Tanox Non-JCA Anti-IgE Product under the Original D&L Agreement, Novartis shall pay Tanox, in the aggregate for each calendar year and for each Tanox Non-JCA Anti-IgE Product not Manufactured by Tanox (on a
Tanox Non-JCA Anti-IgE Product-by-Tanox Non-JCA Anti-IgE Product basis), commencing in the year of the first commercial production, an amount equal to *****. For the avoidance of doubt, the payments set forth in this Section 8.2(h) shall be in lieu
of any amount payable to Tanox pursuant to Section 11.6(b) of the TCA with respect to any Tanox Non-JCA Anti-IgE Product, and with respect to other Non-JCA Anti-IgE Products the provisions of Section 11.6(b) of the TCA shall apply as between
Novartis and Tanox. 
  
 8.3 Supply Price. For the avoidance
of doubt, for the purposes of calculation of Net Profits (EA) or Net Losses (EA), all Commercial Requirements for Anti-IgE Antibodies and Anti-IgE Products for East Asia and ROW will be supplied at a supply price calculated as *****, and all
Clinical Requirements for East Asia and ROW will be supplied at a supply price calculated as *****, each as set forth in the EA/ROW Financial Appendix. For the purposes of such calculation, the cost of supplies of Anti-IgE Antibodies and Anti-IgE
Products sold in East Asia (which cost of supplies, ***** 

  

 22 

 
and the cost of supplies of Anti-IgE Antibodies and Anti-IgE Products sold in ROW shall be *****. 
  
 ARTICLE 9 
  
 PAYMENTS 
  
 9.1 Sales of Anti-IgE Products in East Asia. 
  
 (a) Subject to Section 9.4 and in consideration of the rights and licenses granted by Tanox under the TCA and hereunder, for each country in East Asia,
for the applicable Royalty Period, on an Anti-IgE Product-by-Anti-IgE Product basis, Novartis shall pay Tanox a royalty equal to: 
  
 (i) ***** of Net Sales (East Asia) of any Anti-IgE Products, the manufacture, importation, use or sale of which in a Patent Protected
Country in East Asia would infringe (absent a license) a Valid Claim of a Tanox Anti-IgE Patent in such Patent Protected Country (with it being understood that any Net Sales (East Asia) of an Anti-IgE Antibody shall be deemed Net Sales (East Asia)
of an Anti-IgE Product for purposes of this Article 9); and 
  
 (ii) ***** of Net Sales (East Asia) of any Anti-IgE Products which are not included in the foregoing ***** royalty category in subclause 9.1(a)(i). 
  
 (b) Subject to the other terms and conditions of this Agreement (including, without limitation, Section 5.2(c)), the Parties
shall ***** all Net Profits (East Asia) and Net Losses (East Asia), as the case may be, resulting from the Development and Commercialization of Anti-IgE Products in East Asia, as set forth in greater specificity in the EA/ROW Financial Appendix.

  
 9.2 Sales of Anti-IgE Products in the Rest of World.
Subject to Section 9.4, all revenues from the sale of Anti-IgE Products in the Rest of the World shall *****; provided, however, that in consideration of the rights and licenses granted by Tanox hereunder and under the TCA: 

 
 (a) for all Patent Protected Countries in the Rest of World (aggregated
together), for the applicable Royalty Period with respect to each such country, on an Anti-IgE Product-by-Anti-IgE Product basis, Novartis shall pay Tanox, in the aggregate, the following royalties with respect to Net Sales (ROW) of each Anti-IgE
Product: 
  
 (i) ***** of Net Sales (ROW), on
that portion of the aggregate Net Sales (ROW) in that calendar year which does not exceed ***** of all units of such Anti-IgE Product, the manufacture, importation, use or sale of which in a Patent Protected Country in ROW for such Anti-IgE Product
would infringe (absent a license) a Valid Claim of a Tanox Anti-IgE Patent in such Patent Protected Country; 
  

 23 

 (ii) ***** of Net Sales (ROW), on that portion of the aggregate Net Sales (ROW) in that
calendar year which is greater than ***** but does not exceed ***** of all units of such Anti-IgE Product, the manufacture, importation, use or sale of which in a Patent Protected Country in ROW for such Anti-IgE Product would infringe (absent a
license) a Valid Claim of a Tanox Anti-IgE Patent in such Patent Protected Country; and 
  
 (iii) ***** of Net Sales (ROW), on that portion of the aggregate Net Sales (ROW) in that calendar year which is greater than ***** of all
units of such Anti-IgE Products, the manufacture, importation, use or sale of which in a Patent Protected Country in ROW for such Anti-IgE Product would infringe (absent a license) a Valid Claim of a Tanox Anti-IgE Patent in such Patent Protected
Country; and 
  
 (b) for all Net Sales (ROW) of Anti-IgE Products
which are not included within Section 9.2(a) above, Novartis shall pay Tanox, in the aggregate, a royalty of ***** of Net Sales (ROW) of such Anti-IgE Products for the applicable Royalty Period. 
  
 9.3 Milestone Payments. Novartis shall pay Tanox the following
milestone payments with respect to Anti-IgE Products and/or Anti-IgE Antibodies Developed and/or Commercialized in Japan: 
  

					
	1.	    	 *****
	 	 *****

			
	2.	    	 *****
	 	 *****

  
 The above payments
shall be due within ***** after occurrence of the event specified. 
  
 The above payments shall be made on an Anti-IgE Antibody-by-Anti-IgE Antibody basis for each different Anti-IgE Antibody Developed and/or Commercialized hereunder *****. 
  
 9.4 Credits for Milestone Payments and Legal Fees. 
  
 (a) For each Anti-IgE Product Approved for marketing in Japan, Novartis shall be entitled to a credit equal to ***** which
shall be applied against ***** of the total amount of each royalty payment under Section 9.2 for sales of such Anti-IgE Products in Japan. 
  
 (b) Novartis shall be entitled to a credit equal ***** which credit shall be applied against: (i) ***** of the total amount of each royalty payment under
Sections 9.1(a) and 9.2 of this Agreement for sales of Anti-IgE Products in East Asia and the Rest 

  

 24 

 
of World; (ii) ***** of the total amount of each profit-sharing payment due to Tanox under Section 9.1(b) of this Agreement; and (iii) ***** of the total
amount of each profit-sharing payment due to Tanox under Section 11.1(c) of the TCA. 
  
 (c) Notwithstanding the provisions of paragraphs (a) and (b) above, in no event shall the credits set forth in paragraphs (a) and (b) above be applied by Novartis such that any royalty payment due to Tanox under
Sections 9.1 or 9.2 of this Agreement is reduced by an amount ***** of the total amount of such royalty payment. 
  
 9.5 No Other Payments. Except as otherwise expressly set forth in this Agreement or the TCA or any Related Agreement or Ancillary Agreement, no
payments (including, without limitation, any milestone payment) will be due by any Party to any other Party for the exercise of any rights or performance of any obligation herein, including, without limitation, by way of reimbursement for costs and
expenses in Manufacturing, Developing, obtaining Approvals and Commercializing any Anti-IgE Antibodies or Anti-IgE Products. 
  
 9.6 Reports. The Parties will provide to each other the reports set forth in the EA/ROW Financial Appendix. 
  
 9.7 Books. Each Party shall maintain, and shall cause its Affiliates
and sublicensees to maintain, complete and accurate books and records in connection with its Manufacture, Development and Commercialization of Anti-IgE Antibodies and Anti-IgE Products, including, in any event, sufficient detail so that each Party
may properly ascertain and confirm the amounts payable to or by it hereunder. Such books and records shall be maintained for a period of at least ***** years after the end of the calendar year in which they were generated. If the books and records
of a Party (or its Affiliates or sublicensees) are the subject of a Dispute which has been submitted for resolution under Article 10 of this Agreement, such Party, Affiliate or sublicensee shall keep the records until the Dispute is resolved. Each
Party shall ensure that the EA FSC obtains from each Party, and from each applicable TanNov Committee, such adequate, accurate and complete information and documentation as the EA FSC shall reasonably require to perform its duties under this
Agreement and the EA/ROW Financial Appendix. 
  
 9.8 Timing and
Method of Payment; Currency. Each of the payments due under Sections 9.1 and 9.2 shall be paid on a ***** basis, are due and payable within ***** of the end of the applicable *****, and shall be made by wire transfer of immediately available
funds to the account or accounts designated in writing by the payee. Payment by a Party shall be deemed to have been made as of the day on which such payment is received in such account. All payments hereunder shall be in U.S. Dollars.

  
 9.9 Reconciliation. The ***** payments under Section
9.8 shall be subject to ***** reconciliation by the Parties within ***** of the end of each ***** (to account for deduction items within Net Sales that were originally estimates). In the event that such reconciliation reveals any overpayment or
underpayment, the applicable 

  

 25 

 
Party or Parties shall pay to the other Party or Parties the amount of the discrepancy within ***** after notice of determination of the discrepancy amount
from the payee. 
  
 9.10 Audit Rights. 
  
 (a) Each of the Parties shall, at its expense (except as provided below),
have the right to audit the books and records maintained by the other Party under Section 9.7 in order to determine, with respect to any calendar year during the Term for which the books have closed (that is, any year for which annual financial
statements have issued), the accuracy of any report or payment made or required to be made under this Agreement; provided, however, that a Party shall only be entitled to audit books and records of the other Party from the ***** prior
to the calendar year in which the audit request is made. 
  
 (b)
If a Party desires to audit such books and records, it shall engage an internationally-recognized independent accounting firm reasonably acceptable to the other Party to examine such books and records during normal business hours; provided,
however, that such right to audit shall be exercised only on ***** advance written notice and shall not occur more than once in any twelve (12) month period. Such accounting firm may not be paid on a contingency or other basis related to the
outcome of the audit. Furthermore, such accounting firm shall, prior to the audit, enter into a confidentiality agreement with the audited Party prohibiting such accounting firm from disclosing or using information obtained in connection with the
audit; provided, however, that the accounting firm shall be permitted to provide to the auditing Party information which should properly have been contained in any report required hereunder or otherwise disclosable to such Party.

  
 (c) The audit report and basis for any determination shall be
made available for review and comment by the audited Party, and the audited Party shall have the right, at its expense, to request a further determination by the other Party’s auditor as to matters which the audited Party disputes (to be
completed no more than ***** after the first determination is provided to the audited Party and to be limited to the disputed matters). If the Parties disagree as to such further determination, the Parties shall mutually select an
internationally-recognized independent accounting firm that shall make a final determination as to the remaining matters in dispute that shall be binding upon the Parties. Such independent accounting firm shall enter into a confidentiality agreement
with the audited Party prohibiting such accounting firm from disclosing or using information obtained in connection with the audit; provided, however, that the accounting firm shall be permitted to provide to the auditing Party
information which should properly have been contained in any report required hereunder or otherwise disclosable to such Party. 
  
 (d) If the audit shows any under-reporting or underpayment, or overcharging by any Party, that under-reporting, underpayment or overcharging shall be
reported to the other Party and the underpaying or overcharging Party(s) shall remit such underpayment or reimburse such overcompensation (together with interest as provided below with respect to any underpayment or overcharge) to the underpaid or
overcharged 

  

 26 

 
Party(s) within ***** of receiving the audit report. The expense of such audit shall be borne by the auditing Party; provided, however, that if
an error of ***** in favor of the audited Party is discovered, then such expenses shall be paid by the audited Party. 
  
 9.11 Invoices and Documentation. The Parties shall agree upon the timing and form of any necessary documentation relating to any payments hereunder
so as to afford the Parties appropriate accounting treatment in relation to any of the transactions or payments contemplated hereunder, which documentation may include, without limitation, invoices, bills of account and work orders, and which
documentation shall refer to the date on which payments are due thereunder. 
  
 9.12 Taxes. Any withholding or other taxes that any Party is required by Legal Requirements to withhold or pay on behalf of any other Party, with respect to any payments to such other Party hereunder, shall be
deducted from such payments and paid to the relevant taxing authority contemporaneously with the remittance to the other Party; provided, however, that the withholding Party shall furnish the other Parties with (i) reasonably
satisfactory evidence that such payment or withholding is required, (ii) reasonable assistance to enable or assist such Party to claim exemption from any such deduction, and (iii) proper evidence that the taxes have been paid. Each Party shall
furnish the other Parties with appropriate documents to secure application of the most favorable rate of withholding tax under applicable Legal Requirements. 
  
 9.13 Interest. Should any Party fail to make any payment to another Party under this Agreement when due, unless and to the extent that the payment
obligation is disputed (in good faith), the unpaid amount shall bear interest from the date due until paid at a rate equal to ***** per annum, where the ***** on the last date such payment could be timely made before becoming overdue. 
  
 ARTICLE 10 
  
 DISPUTE RESOLUTION 
  
 10.1 Resolution of Disputes. 
  
 (a) Subject to securing preliminary injunctive relief pursuant to Section
15.3 of the TCA and subject to Section 9.10(c) of this Agreement and Section 11.12(e) of the TCA with respect to audits, the Parties agree that all Disputes with respect to East Asia or the Rest of World shall be resolved only as set forth in this
Article 10. Notwithstanding anything to the contrary in this Article 10, in the event that a Party reasonably requires relief on a more expedited basis than would be possible pursuant to the procedure set forth in this Article 10, such Party may
seek a temporary injunction or other interim equitable relief in a court of competent jurisdiction pending the ability of the arbitrators to review the decision under this Article 10. 
  
 (b) The Parties agree that, subject to securing preliminary injunctive relief pursuant to Section 15.3 of the TCA or as
provided in Section 10.1(a) above and subject to Section 9.10(c) of this Agreement and Section 11.12(e) of the TCA with 

  

 27 

 
respect to audits, the Parties shall attempt to resolve any Dispute with respect to East Asia or the Rest of World through good faith negotiation and
discussion through the respective Alliance Managers of the Parties. If a Party believes that the Dispute has not been resolved after such Party’s Alliance Manager uses reasonable efforts to consult the Alliance Manager(s) of the other Party,
then such Party may send a written Notice of Dispute to the Chairman of the TanNov JMC, specifying therein the nature of the Dispute and the relief requested, and requesting that the Senior Officers of the Parties meet to attempt to resolve the
Dispute. The Chairman of the TanNov JMC shall promptly forward the Notice of Dispute to the Senior Officers of the Parties. The Senior Officers of the Parties shall diligently attempt to resolve the referred Dispute by mutual consent of the Parties,
including, without limitation, by means of an in-person meeting. In the event that the Senior Officers of the Parties are unable to resolve any Dispute within ***** from the date that the Notice of Dispute was delivered to the Chairman of the TanNov
JMC, any Party shall be free to file a notice of arbitration with respect to the Dispute, and pursue resolution thereof, pursuant to Section 10.2. 
  
 10.2 Arbitration. Subject to securing injunctive relief pursuant to Section 15.3 of the TCA or as provided in Section 10.1(a) above, the Parties
agree that all Disputes arising under or pursuant to this Agreement shall be resolved in accordance with Section 12.2 of the TCA. 
  
 10.3 ***** ***** 
  
 ARTICLE 11 
  
 INTELLECTUAL PROPERTY 
  
 11.1 Trademarks. 
  
 (a)
Novartis (or its designated Affiliate) shall have the sole right to select (subject to Section 13.1 of the Tripartite Cooperation Agreement), and shall own, all Anti-IgE Trademarks in East Asia and the Rest of World. 
  
 (b) Subject to Tanox’s prior review and approval of a plan relating to
trademark registrations in East Asia and the Rest of World, the out-of-pocket costs of filing, prosecuting and maintaining trademark registrations and applications for trademark registration with respect to the Anti-IgE Trademarks: (i) in East Asia
shall be ***** as set forth in the EA/ROW Financial Appendix; and (ii) in the Rest of World shall be *****. 
  
 11.2 Ownership of Intellectual Property. Section 13.2 of the Tripartite Cooperation Agreement sets forth the terms governing ownership, prosecution
and maintenance of intellectual property (other than Anti-IgE Trademarks) relating to the Manufacture, Development and Commercialization of any Anti-IgE Antibody or Anti-IgE Product under this Agreement and the Tripartite Cooperation Agreement.

  
 11.3 Infringement of Intellectual Property. Section
13.4 of the Tripartite Cooperation Agreement sets forth the terms governing the Parties’ actions 

  

 28 

 
relating to Third Party infringement of any Anti-IgE Patents, Anti-IgE Trademarks or misappropriation of any Know-How or any action by a Third Party for a
declaration that any of the Anti-IgE Patents or Anti-IgE Trademarks hereunder are not infringed, are invalid or unenforceable. 
  
 11.4 Third Party Rights. 
  
 (a) In the event that either Party becomes aware of any patent or other proprietary right of one or more Third Parties that may be infringed by the
Development, Manufacture or Commercialization of any Anti-IgE Product by the Parties under this Agreement, that Party shall follow the procedures set forth in Section 6.8 of the Tripartite Cooperation Agreement. Section 6.8 of the Tripartite
Cooperation Agreement sets forth the terms governing the Parties’ obligations to ensure that any licenses or other rights obtained from Third Parties necessary or material to the Manufacture, Development and Commercialization of Anti-IgE
Antibody or Anti-IgE Products which are Developed or Commercialized in the United States and/or Europe may be licensed or sublicensed to the other Party under the licenses in Article 6 of the Tripartite Cooperation Agreement. 
  
 (b) The Parties agree to cooperate in determining the necessity and
availability of licenses to any Third Party Rights necessary for or material to the Manufacture, Development or Commercialization of Anti-IgE Products or Anti-IgE Antibodies which are Developed or Commercialized in East Asia but are not Developed or
Commercialized in the United States or Europe (including, without limitation, through the extension of existing licenses). Without limiting the foregoing, any Party which believes that a license is required under any such Third Party Rights for the
Manufacture, Development or Commercialization of any such Anti-IgE Products or Anti-IgE Antibodies in East Asia shall provide notice thereof to the TanNov JMC. The TanNov JMC shall determine whether, how, and by which Party, any approach to a Third
Party to obtain any such license should be made, and all negotiations and discussions with any such Third Party with respect thereto shall be conducted at the general direction of and in consultation with the TanNov JMC; provided,
however, that if a license is negotiated to cover products other than Anti-IgE Products, the terms applying to Anti-IgE Products shall not be more onerous with respect to Anti-IgE Antibodies and Anti-IgE Products without the consent of the
TanNov JMC. Subject to the terms and conditions herein, any Party designated by the TanNov JMC to obtain a license to Third Party Rights shall use reasonably diligent efforts to do so in accordance with TanNov JMC instructions and the other terms
and conditions of this Agreement. The terms and conditions of any such license shall be subject to the approval of the TanNov JMC in so far as such terms and conditions relate to Anti-IgE Antibodies or Anti-IgE Products, and upon such approval being
given, such licenses shall be deemed to be within the scope of the applicable Party’s Anti-IgE Patents, Company Information and Biological Materials, and sublicensed pursuant to Article 6 of the TCA with respect to East Asia and the Rest of
World only, *****. 
  
 (c) Novartis shall be responsible for
determining the necessity and availability of licenses to any Third Party rights necessary for or material to the Manufacture, Development or Commercialization of Anti-IgE Products or Anti-IgE 

  

 29 

 
Antibodies which are Developed or Commercialized in Rest of World but are not Developed or Commercialized in the United States, Europe or East Asia. Novartis
shall determine, in its sole discretion, whether and how to approach a Third Party to obtain any such license, and all negotiations and discussions with any such Third Party with respect thereto shall be conducted at by Novartis in its sole
discretion (and all fees, royalties and other payments, costs and expenses in connection therewith shall ***** with respect to Anti-IgE Antibodies or Anti-IgE Products sold (or intended to be sold) in ROW. 
  
 (d) ***** 
  
 (e) ***** 
  
 11.5 Infringement of Third Party Patents. 
  
 (a) In the event that a Party is sued or threatened with suit by a Third Party who claims that the importation, manufacture, use, offer for sale or sale
of an Anti-IgE Antibody or Anti-IgE Product in East Asia or the ROW is an infringement of one or more claims of a patent owned or controlled by such Third Party, the sued or threatened Party shall immediately notify the other Party including the
available evidence of such suit or threat, and the Parties shall then reach a determination regarding defense of the action. 
  
 (b) ***** notwithstanding anything in this Section 11.5, in the event that a Party wishes to settle any suit or action on a voluntary basis, the other
Party shall not be required to share in any settlement amounts (including, without limitation, any costs in obtaining or maintaining any license granted as part of any such settlement) unless such other Party has first approved the terms of any such
settlement. 
  
 11.6 No Implied License. Article 6 of the
Tripartite Cooperation Agreement sets forth the licenses granted by and to each of the Parties with respect to Anti-IgE Antibodies and Anti-IgE Products in East Asia and the Rest of World. Except as expressly provided in this Agreement, the TCA, the
Ancillary Agreements or the Related Agreements, no rights, licenses, title or interests, implied or otherwise, in, to or under any Anti-IgE Patents or Company Information (including, without limitation, Know-How or Biological Materials) are granted
or provided to any Party hereto, through implication, estoppel or otherwise. 
  
 ARTICLE 12 
  
 REPRESENTATIONS AND WARRANTIES 
  
 12.1
Disclaimer. Except as expressly set forth herein or in the TCA, no Party makes any, and each Party expressly disclaims any and all, express or implied warranties, statutory or otherwise, concerning the subject matter of this Agreement,
including, without limitation, the value, adequacy, quality, efficiency, stability, characteristics or usefulness of, or non-infringement, merchantability or fitness for a particular purpose of, any Anti-IgE Antibody or Anti-IgE Product. 

 

 30 

 ARTICLE 13 
  

CONFIDENTIALITY 
  
 13.1 Company Information. Sections 15.1 and 15.3 of the Tripartite Cooperation Agreement set forth the terms governing the Parties’ rights and
obligations regarding the disclosure and use of Company Information. 
  
 13.2 Academic and Scientific Publications. Section 15.2 of the Tripartite Cooperation Agreement sets forth the procedure to be followed in the event that either Party desires to publish or to make a public presentation of any Company
Information. 
  
 ARTICLE 14 
  
 LIMITATIONS ON LIABILITY 
  
 IN NO EVENT SHALL ANY PARTY OR ITS AFFILIATES BE LIABLE TO ANY OTHER PARTY
OR SUCH OTHER PARTY’S AFFILIATES OR THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS FOR SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS) SUFFERED BY THE OTHER PARTY OR
SUCH OTHER PARTY’S AFFILIATES OR THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES OR AGENTS UNDER THIS AGREEMENT OR THE TCA, except to the extent of any such damages paid to a Third Party as compensation for a claim by a Third Party.
Notwithstanding any of the foregoing in this Article 14 to the contrary, nothing in this Article 14 shall limit a Party’s right to seek and recover royalties, profit share or milestone payments which would have been payable or due under Article
9 of this Agreement but for a Party’s breach of this Agreement. 
  
 ARTICLE 15  
  
 FORCE MAJEURE 
  
 No Party shall be held liable or responsible to any other Party or be deemed
to have breached or defaulted under this Agreement for failure or delay in performing its obligations hereunder or thereunder to the extent, and as long as, such failure or delay is caused by or results from causes beyond the reasonable control of
the affected Party, which would not have been avoided by the exercise of due care and reasonable prudence, and the observance of reasonable standards in the pharmaceutical industry, including, without limitation but subject to the foregoing, fire,
floods, earthquakes, hurricanes, tornadoes, embargoes, war, acts of terrorism, insurrections, sabotage, riots, civil commotions, strikes, lockouts or other labor disturbances, acts of God, incapacitation (including without limitation, contamination)
of manufacturing facilities, omissions or delays in acting by any governmental authority, and acts of a government or agency thereof and judicial orders or decrees (“Force Majeure Events”). 
  

 31 

 In the event of occurrence of the foregoing, each Party must use Commercially Reasonable Efforts to mitigate the adverse
consequence of such cause or Force Majeure Event. 
  
 ARTICLE 16

  
 TERM AND TERMINATION 
  
 16.1 Term. Unless otherwise terminated pursuant to other express
provisions set forth herein, this Agreement shall expire: 
  
 (a)
as to East Asia, on the later ***** and such time as no Anti-IgE Antibody or Anti-IgE Product is any longer being Developed (including manufacturing development) hereunder by or for Novartis or Tanox (or a sublicensee) for, or Commercialized by or
for Novartis (or a sublicensee) in, East Asia (except and unless the lack of any such activity constitutes a material breach hereunder); and 
  
 (b) as to the Rest of the World, on the later ***** and such time as no Anti-IgE Antibody or Anti-IgE Product is any longer being Developed (including
manufacturing development) hereunder or Commercialized by or for Novartis (or a sublicensee) in the Rest of the World (except and unless the lack of any such activity constitutes a material breach hereunder). 
  
 16.2 Termination Rights. 
  
 (a) This Agreement may be terminated (including, without limitation, with
respect to the rights and obligations of the Parties after the effective date of such termination, subject to the provisions of Section 16.6): (i) by mutual written agreement of the Parties; (ii) by any Party, by giving written notice to the other
Party, upon the liquidation, dissolution, winding-up, insolvency, bankruptcy, or filing of any petition therefore, appointment of a receiver, custodian or trustee, or any other similar proceeding (other than a dissolution or winding up for the
purposes of reconstruction or amalgamation), by or of such other Party where such petition, assignment or similar proceeding is not dismissed or vacated within *****, or upon or after rejection of any license under the TCA by the bankrupt Party; or
(iii) otherwise as expressly specified in this Article 16. 
  
 (b)
Upon termination under subsection 16.2(a)(ii) above, if the Bankrupt Party is Tanox, subject to Section 16.6, (i) Tanox’s rights and obligations under this Agreement shall be treated as set forth in Section 16.5(b) below (other than Section
16.5(b)(iv)), and *****, (ii) Tanox’s right to receive payments under Section 9 (other than Section 9.1(b)) shall survive, and (iii) all of Novartis’ rights under this Agreement shall survive. 
  
 (c) Upon termination under subsection 16.2(a)(ii) above, if the Bankrupt
Party is Novartis, subject to Section 16.6, (i) Novartis’ rights and obligations under this Agreement shall be treated as set forth in Section 16.5(a) below *****, and (ii) all of Tanox’s rights under this Agreement shall survive.

  

 32 

 16.3 Required Termination of this Agreement. As set forth in the applicable provisions of the TCA:

  
 (a) in the event that Novartis exercises its right to
terminate the TCA at will pursuant to Section 18.3(b) of the TCA, Novartis must also terminate this Agreement, which termination shall be affected by notice in writing delivered to Tanox, as contemplated in Section 18.3(b) of the TCA; and

  
 (b) in the event that the TCA is terminated by written
agreement, as set forth in Section 18.2 of the TCA, either Party may terminate this Agreement by written notice to the other Party. 
  
 16.4 No Termination for Breach. Upon the material failure of a Party (“Breaching Party”) to comply with any of its material
obligations contained in this Agreement, all remedies in law and in equity shall be available to the other Party, except that the other Party may not terminate this Agreement as to the Breaching Party. *****. 
  
 16.5 Termination at Will. 
  
 (a) Subject to Section 16.5(c) below, Novartis may terminate this Agreement
(including, without limitation, its rights and obligations after the effective date of such termination, subject to the provisions of Section 16.6), at any time after the date which is *****, by giving ***** prior written notice to Tanox and paying
all amounts it is financially responsible for hereunder up to such termination date; provided, however, that within ***** of receipt of such notice, Tanox may, by notice in writing to Novartis, accelerate the effective date of such
termination to a date not less than ***** from the date of Novartis’ notice of termination under this Section 16.5(a). If Novartis terminates this Agreement pursuant to this Section 16.5(a), Novartis’ rights to Develop and Commercialize
Anti-IgE Products in East Asia and ROW under this Agreement and the TCA shall be transferred or granted, as the case may be, to Tanox, Tanox shall have and retain exclusive rights for the Development and Commercialization of Anti-IgE Antibodies and
Anti-IgE Products in East Asia and the Rest of the World and the provisions of Sections 18.3(b)(i) and 18.3(b)(iii) of the TCA shall apply to the extent reasonably required for Tanox to continue Development and Commercialization in East Asia and
ROW. 
  
 (b) Subject to Section 16.5(c) below, Tanox may terminate
this Agreement (including, without limitation, its rights and obligations after the effective date of such termination, subject to the provisions of Section 16.6 and the remainder of this Section 16.5(b)), at any time after the date which is *****,
by giving ***** prior written notice to Novartis and paying all amounts it is financially responsible for hereunder up to such termination date; provided, however, that within ***** of receipt of such notice, Novartis may, by notice in
writing to Tanox, accelerate the effective date of such termination to a date not less than ***** from the date of Tanox’s notice of termination under this Section 16.5(b). If Tanox terminates this Agreement pursuant to this Section 16.5(b):

  
 (i) Tanox’s rights to Develop and
Commercialize Anti-IgE Products in East Asia under this Agreement and the TCA shall be transferred or granted, as the case may be, to Novartis; 
  

 33 

 (ii) Novartis shall have and retain exclusive rights for the Development and
Commercialization of Anti-IgE Antibodies and Anti-IgE Products in East Asia and the Rest of the World; 
  
 (iii) The applicable provisions of Section 18.3(b)(i) of the TCA, as applied in the event of a Novartis termination under Section 16.5(a),
shall apply hereunder with Tanox and Novartis switched under such provisions so that Tanox owes the relevant transitional assistance obligations to Novartis thereunder (all to the extent applicable to a Tanox termination under this Section 16.5(b));
and 
  
 (iv) Article 9 and the relevant payment
obligations of Novartis thereunder shall survive and remain in full force and effect, except that Section 9.1(b) shall terminate. 
  
 (c) In the event that either party terminates this Agreement as set forth in Section 16.5(a) or 16.5(b), as the case may be, the terminating Party shall
provide all cooperation and assistance reasonably requested by the other Party to enable the other Party (or its designee) to assume with as little disruption as reasonably possible, the continued Development and Commercialization of the Anti-IgE
Products then being Commercialized or Developed hereunder (and only in the form and formulation then being Commercialized or Developed hereunder) (the “Active Products”), if the other Party so chooses to pursue such continued
Development and/or Commercialization. Such cooperation and assistance shall be provided in a prompt and timely manner (having regard to the nature of the cooperation or assistance requested) and shall include, without limitation, the matters set
forth in Section 18.3(d) of the TCA in so far as applicable to East Asia and the ROW (with Tanox and Novartis switched under such provisions so that Tanox owes the relevant transitional assistance obligations to Novartis thereunder (to the extent
applicable) in the event of a Tanox termination under Section 16.5(b)). 
  
 16.6 Effect of Termination; Survival. Termination or expiration of this Agreement shall not affect or limit the rights or obligations of the Parties (including the obligation to pay amounts due hereunder) that have accrued or were
incurred prior to the effective date of such expiration or termination. In addition, the following sections and articles of this Agreement shall survive any expiration or termination of this Agreement: 9 (“Payments”) (with respect to only
amounts owing or accrued as of the effective date of termination), 10 (“Dispute Resolution”), 13 (“Confidentiality”) (but only for such period of time as is provided for in Section 18.6 of the TCA), and 14 (“Limitations on
Liability”), this Article 16, and Articles 17 (“Indemnification and Insurance”) (with respect only to events occurring prior to the effective date of termination) and 18 (“Miscellaneous”). All other provisions, unless
expressly provided otherwise herein, shall terminate and be of no further force or effect upon expiration or termination of this Agreement. Expiration of this Agreement in a given territory shall 

  

 34 

 
release the Parties from any duties or obligations imposed in this Agreement with respect to such territory, including, for example, restrictions on
independent development of Anti-IgE Antibodies or Anti-IgE Products in that territory, except that the foregoing surviving clauses specified above shall remain in effect with respect to such territories. In the event of expiration in a particular
territory, however, all terms and conditions of this Agreement shall remain in effect in accordance with their terms with respect to all other, non-expired territories. 
  
 ARTICLE 17 
  
 INDEMNIFICATION AND INSURANCE 
  
 17.1 Indemnities Generally. Sections 19.1 and 19.3(a) and (c) of the Tripartite Cooperation Agreement shall apply with respect to the Parties’
activities pursuant to this Agreement as if set out in full in this Agreement. Notwithstanding the foregoing, or Section 17.2 below, indemnification by Novartis under this Agreement does not diminish or affect the indemnification by Tanox under the
Hu-901 Extension Agreements and such Hu-901 Extension Agreement indemnification shall remain in full force and effect. 
  
 17.2 Product Liability and Infringement Indemnity for ROW. Novartis shall indemnify, defend and hold harmless the Tanox Indemnitees from and
against any and all Damages to the extent arising from any *****: 
  
 (a) ***** 
  
 (b) ***** 
  
 (c) ***** 
  
 (d) ***** 
  
 (e) ***** 
  
 17.3 Litigation Costs and Damages. 
  
 (a) Notwithstanding any other provision of this Agreement or the EA/ROW Financial Appendix (but without limiting the indemnity obligations of the Parties
under Sections 17.1 and 17.2 and subject to the treatment of Excluded Costs under the EA/ROW Financial Appendix), the Parties acknowledge and agree that all Damages incurred by any Party with respect to any product liability claim, action, suit,
proceeding or investigation by a Third Party (including without limitation claims by or on behalf of patients for personal injury or wrongful death) with respect to any Anti-IgE Antibody or Anti-IgE Product Developed or Commercialized under this
Agreement in East Asia shall be treated as ***** 
  
 (b)
Notwithstanding any other provision of this Agreement or the EA/ROW Financial Appendix (but without limiting the indemnity obligations of the 

  

 35 

 
Parties under Sections 17.1 through 17.2 and subject to the treatment of Excluded Costs under the EA/ROW Financial Appendix), the Parties acknowledge and
agree that all Damages incurred by any Party with respect to any Third Party claim, action, suit or proceeding for patent infringement in East Asia based on the manufacture, use, sale or import of any Anti-IgE Antibody or Anti-IgE Product, shall be
treated as *****. 
  
 17.4 Indemnification Procedure.
Section 19.4 of the TCA shall apply with respect to the indemnities granted hereunder as if set forth in full in this Agreement. 
  
 17.5 Insurance. Prior to a Party hereunder initiating human clinical trials or the Manufacture, marketing or sale of Anti-IgE Products or Anti-IgE
Antibodies hereunder, such Party shall self-insure for, or procure and maintain, liability insurance in such amounts and having such limits and terms as are reasonable and consistent with its performance under this Agreement and sound business
practices of similarly situated companies or institutions in the industry. 
  
 ARTICLE 18 
  
 MISCELLANEOUS 
  
 18.1 Governing Law;
Submission to Jurisdiction. This Agreement shall be governed by and construed in accordance with laws of the State of New York without giving effect to the principles of conflict of laws thereunder (other than Section 5-1401 of the General
Obligations Law). Further, the Parties hereby consent to the personal jurisdiction of the courts of the State of New York, County of New York, and the United States Federal District Court for the Southern District of New York over any claim for
enforcement of an award of the arbitrators pursuant to Article 12 of the TCA and will waive any claims of forum non conveniens or objection to the laying of venue in any of such courts. 
  
 18.2 Notices. Any notices to be given hereunder shall be in writing
and shall be delivered by one of the following means: personal delivery, certified or registered airmail, facsimile with confirmed receipt or confirmed delivery by an overnight commercial courier service: 
  

	 	(a)	if to Novartis, to: 

  
 Novartis Pharma AG 
 Lichtstrasse 35

 CH 4002 Basel, Switzerland 
 Attention: Head, Global Business Development and Licensing 
 Telephone: 41 61 324 5416 
 Facsimile: 41 61 324 2100 
  

 36 

 with a required copy to: 
  
 Novartis Pharma AG 
 Lichtstrasse 35 
 CH 4002 Basel, Switzerland 
 Attention: General Counsel 
 Telephone: 41 61 324 6877 
 Facsimile: 41 61 324 6859 
  

	 	(b)	if to Tanox, to: 

  
 Tanox, Inc. 
 10301 Stella Link Drive

 Houston, Texas 77025 
 Attention: President 
 Telephone: 713-578-4000 
 Facsimile: 713-578-5002 
  
 with a
required copy to: 
  
 Tanox, Inc. 
 10301 Stella Link Drive 
 Houston, Texas 77025

 Attention: General Counsel 
 Telephone: 713-578-4000 
 Facsimile: 713-578-5002 
  
 A notice shall be deemed to be given at the time of delivery in the case of personal delivery, or upon confirmed receipt
(including machine confirmation) in the case of facsimile delivery or upon receipt in the case of delivery by certified or registered airmail or upon confirmed receipt (including courier confirmation) in the case of commercial courier. 

 
 18.3 No Third Party Beneficiary. Nothing herein expressed or
implied is intended to or shall be construed to confer upon or give to any Person other than the Parties hereto and their successors and permitted assigns any rights or remedies under, or by reason of, this Agreement. 
  
 18.4 Integration and Conflict. This Agreement, including Schedule A
hereto, together with the TCA (together with all exhibits and schedules thereto), constitutes the entire agreement of the Parties hereto regarding the subject matter hereof and, except as otherwise specified herein, supersedes all prior agreements
of the Parties with respect to such subject matter. In the event of any conflict between the provisions of this Agreement and the TCA, the provisions of the TCA shall control as between the Parties; provided, however, that as between
the Parties to the extent that the Tripartite Cooperation Agreement is silent as to a matter expressly dealt with in this Agreement, the terms of this Agreement shall prevail. 
  

 37 

 18.5 Amendments. No provision in this Agreement shall be supplemented, deleted or amended except
in a writing executed by each of the Parties. 
  
 18.6 No
Assignment and Binding Effect. Any Party may freely assign this Agreement or any of its rights, interests, duties or obligations hereunder, in whole or in part, to an Affiliate, provided that such assignment shall not relieve in any way the
obligations of an assigning Party hereunder. Subject to the Parties’ respective rights to grant sublicenses pursuant to Section 6.7 of the TCA, no Party shall assign this Agreement or any of its rights, interests, duties or obligations
hereunder to a Third Party without the prior written consent of the other Parties (and any attempt to do so shall be null and void) unless such assignment is part of a merger, acquisition or sale of such Party or substantially all of its assets (in
which case no consent is required). This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of each of the Parties. Notwithstanding any other provision of this Section 18.6, this Agreement may only be
assigned together with the TCA in so far as it relates to East Asia and the ROW. 
  
 18.7 Headings. The headings and the Table of Contents in this Agreement are for convenience of reference only and shall not affect the meaning or interpretation of the provisions hereof. 
  
 18.8 Schedules Incorporated. Schedule A annexed hereto is hereby
incorporated herein as a part of this Agreement with the same effect as if set forth in the body hereof, except as otherwise specified in such Schedule. 
  
 18.9 Severability. If any provision herein shall be held invalid or unenforceable by a court of competent jurisdiction or other authority in any
Regulatory Jurisdiction, the remainder of the provisions herein shall remain in full force and effect with respect to such Regulatory Jurisdiction and shall not be affected thereby. To the extent that any provision hereof shall be held to be wholly
or partially invalid or unenforceable in any Regulatory Jurisdiction, the Parties shall use their best efforts to replace the invalidated provision with a valid and enforceable provision which, insofar as practicable, implements the intent of the
invalidated, or partially invalidated, provision with respect to such Regulatory Jurisdiction. 
  
 18.10 No Waiver. The failure from time to time by any Party to exercise, or the waiver by such Party of, any of such Party’s rights or remedies hereunder shall not operate or be construed as a continuing
waiver of the same or of any other of such Party’s rights or remedies provided under this Agreement. No waiver of a provision of this Agreement will be effective unless made in writing and signed by an authorized representative of the waiving
Party. 
  
 18.11 Counterparts. This Agreement and any
amendments, waivers, consents or supplements hereto or in connection herewith may be executed in any number of counterparts and by the Parties in separate counterparts, each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from 

  

 38 

 
multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. 
  
 18.12 Bankruptcy Acknowledgment. Each of the Parties hereto
acknowledges and agrees that this Agreement (i) constitutes a license of Intellectual Property (as such term is defined in the United States Bankruptcy Code, as amended (the “Code”)), and (ii) is an executory contract, with
significant obligations to be performed by each Party hereto. The Parties agree that each may fully exercise all of its rights and elections under the Code following any event of bankruptcy affecting the other, including, without limitation, those
set forth in Section 365(n) of the Code. 
  
 18.13
Publicity. No Party shall, without the prior written consent of the other Parties, issue any press release or make any other public announcement or furnish any written or oral statement to any Third Party, which makes reference to this
Agreement, any of the transactions contemplated hereby or thereby, or any other Party or its Affiliates; provided, however, that such consent shall not be unreasonably withheld to the extent such disclosure is required by securities
disclosure requirements or otherwise by an authorized Public Authority. Each Party shall provide a draft of any of the aforementioned documents containing any such reference (including without limitation, a copy of this Agreement or any excerpt
hereof, proposed to be filed with any securities regulatory authority or any securities exchange) to the other Parties and their counsel as far in advance of release thereof and in sufficient time for review of such documents by the other Parties
and their counsel, and in any event not less that ***** prior to release thereof unless otherwise required by order of a Public Authority. In the event any Party objects to any such reference, the applicable document will be modified to such
Party’s reasonable satisfaction. If a Party does not deliver its written comments on such documents within ***** of receipt thereof with respect to press releases (or such shorter time as may be agreed by the Parties) and ***** with respect to
all other materials (or such shorter time as may be agreed by the Parties), such Party shall be deemed to have consented to any such references therein. When a Party has obtained the other Parties’ consent for a public announcement or
statement, it will not be required to obtain the other Parties’ consent for a subsequent public announcement or statement of the same subject matter which does not disclose any additional or materially different information from that contained
in any previously approved disclosure; provided, however, that: (i) such subsequent public announcement or statement does not characterize such subject matter in a materially different way to such previously approved disclosure; (ii)
such Party provides to each of the other Parties a copy of any such subsequent public announcement or statement not less than two (2) Business Days prior to its proposed disclosure; and (iii) information concerning the other Parties and their
respective Affiliates may not be used without obtaining consent to each such disclosure. Nothing herein contained shall be construed to impose upon any Party any liability or other obligation (to any other Party or any other Person) in respect of
any such references in any such documents. In the event that one Party reasonably concludes that a given disclosure is required by law and another Party disagrees with the substance or extent of the disclosure, then the Party seeking such disclosure
shall either (i) limit said disclosure to address the concerns of the other Party, or (ii) such dispute if not resolved by corporate counsel to the Parties, shall be resolved in accordance with the legal opinion received from a law firm that is
reasonably acceptable 

  

 39 

 
to the Parties and has no material relationship with any of the Parties or their Affiliates, with the fees to such law firm to be paid equally by the Party
seeking to make the disclosure and the Party objecting to the disclosure. With respect to any required filing of this Agreement with a Public Authority, the filing Party shall seek confidential treatment of portions of this Agreement and the other
Parties shall have the right to review and comment on such an application for confidential treatment prior to its being filed. 
  
 18.14 No Partnership or Agency. The Parties hereby acknowledge that while the Parties intend to cooperate as set forth in this Agreement, the
Parties are independent contractors and nothing provided in this Agreement or the performance of the Parties under this Agreement is intended or may be deemed to form (or be deemed to constitute in law or in equity) a partnership, agency, joint
venture, distributorship, fiduciary, or any other similar relationship between any of the Parties. The Parties are not affiliated and no Party has any right or authority to bind any other Party in any way. 
  
 18.15 Further Assurances. Each Party agrees to take or cause to be
taken such further actions, and to execute, deliver and file or cause to be executed, delivered and filed such further documents and instruments, and to obtain such consents, as may be reasonably required or requested by another Party in order to
effectuate fully the purposes, terms and conditions of this Agreement. 
  

 40 

 IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in triplicate by their duly
authorized representatives as of the day and year first above written. 
  

			
	 NOVARTIS PHARMA AG

		
	 By:
	 	 
	 	 	

	 Name:
	 	Daniel J. Weston
	 Title:
	 	 Global Head, Alliance Management,
 Business Development & Licensing

		
	By:	 	 
	 	 	

	 Name:
	 	Kimberly J. Urdahl
	 Title:
	 	Head of Legal, Primary Care
	
	 TANOX, INC.

		
	By:	 	 
	 	 	

	 Name:
	 	Nancy T. Chang
	 Title:
	 	President and Chief Executive Officer

  

 41 

 SCHEDULE A 
  

EA/ROW FINANCIAL APPENDIX 
  

 CERTAIN INFORMATION IN THIS EXHIBIT IS SUBJECT TO A REQUEST FOR CONFIDENTIAL TREATMENT IN ACCORDANCE WITH RULE 24B-2
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. SUCH INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATION OF SUCH OMITTED INFORMATION HAS BEEN INDICATED WITH ASTERISKS (*****).

  
 SCHEDULE A 
  
 EA/ROW FINANCIAL APPENDIX 
  
 TO ANCILLARY D&L AGREEMENT 
  

 SCHEDULE A 
  
 Financial Planning, Accounting and Reporting 
 For the Ancillary D&L Agreement 
  
 TABLE OF CONTENTS 
  

					
	 1.
	  	 Principles of Reporting
	  	i
			
	 2.
	  	 Duties of the Finance Sub-Committee
	  	iii
			
	 3.
	  	 Frequency of Reporting and Other Information Exchange
	  	iv
			
	 4.
	  	 Budget, Forecast and Long Range Plan
	  	vi
			
	 5.
	  	 Definitions
	  	vi
			
	 6.
	  	 Foreign Exchange
	  	viii
			
	 7.
	  	 Responsibility for TanNov Reporting; Payment between the TanNov Parties
	  	viii
			
	 8.
	  	 Payments to Tanox
	  	ix
			
	 9.
	  	 Effective Accounting Date Termination for TanNov
	  	ix
			
	 10.
	  	 Guidelines for Charging Development Costs
	  	ix
			
	 11.
	  	 Guideline for Product Sampling
	  	ix

  

 i 

 This EA Financial Appendix (the “EA Financial Appendix”) is Schedule A attached to and
incorporated into the Ancillary D&L Agreement (the “Agreement”) dated as of February 25, 2004 by and among Novartis Pharma AG (“Novartis”) and Tanox, Inc. (“Tanox”) (each also singularly referred to herein as a
“Party” and collectively as the “Parties”). 
  
 This EA
Financial Appendix covers the financial planning, accounting practices and procedures to be followed in determining the “Net Sales” and related payment of royalties in the Rest of the World and the “Net Profit” or “Net
Loss” (as defined below) and sharing of revenue and costs and expenses in East Asia, each pursuant to the Agreement. For such purpose, this EA Financial Appendix sets out, among other things, the principles of reporting among the Parties
the actual results and budgeted plans, forecasts and long range plans of “TanNov” (as defined below), the frequency of reporting, the use of a single “Functional Currency” (as defined below) for determining and reporting payments
to the Parties, and other matters. The consolidated accounting construct consisting of certain Tanox and Novartis operations under the Agreement will be referred to as “TanNov”. It should be noted that “TanNov” is not a legal
entity and has been defined for identification purposes only. 
  
 The
functionality of “TanNov” relates only to East Asia (as defined in the Agreement), and to the operations of Tanox and Novartis in East Asia. Thus, references in this EA Financial Appendix to a “TanNov Party” or
“TanNov Parties” shall be construed to mean Tanox and/or Novartis (and its Affiliates), as the case may be, for purposes of this EA Financial Appendix and the Agreement, including the application of the financial definitions herein.
“TanNov” is a virtual account and not a separate auditable entity. 
  
 This EA Financial Appendix also provides agreed upon definitions of financial terms applicable to the Parties for purposes of the Agreement, and, subject to the terms of the Agreement, sets forth roles and responsibilities of the EA
Finance Sub-Committee. All capitalized terms used herein without definition shall have the meanings ascribed thereto in the Agreement, unless otherwise expressly provided herein. In the event of a conflict between the terms and provisions of this
EA Financial Appendix and the Agreement, the terms and provisions of the Agreement shall govern. 
  
 The contents of this EA Financial Appendix, and all activities hereunder, are to be governed by the terms and conditions of the Agreement, including the confidentiality provisions set forth therein. 

 

	1.	Principles of Reporting 

  
 (a) East Asia 
  
 For purposes of the sharing of costs and sharing of “Net Profit” or “Net Loss” (as the case may be) in East Asia among the Parties as
provided under the Agreement and this EA Financial Appendix, the presentation of results of operations of the TanNov Parties for East Asia will be based on each TanNov Party’s respective financial information for East Asia for the
applicable period in the reporting format depicted as follows: 
  

							
	 	  	Novartis

	  	Tanox

	  	Total

	 Gross Sales (East Asia)
	  	 	  	 	  	 
	 less *****
	  	 	  	 	  	 
	 =        Net Sales (East Asia)
	  	 	  	 	  	 
	 less *****
	  	 	  	 	  	 
	 =        Gross Profit (East Asia)
	  	 	  	 	  	 
	 less *****
	  	 	  	 	  	 
	 =        Net Profit (East Asia) or Net Loss (East Asia) for purpose of TanNov profit share.
	  	 	  	 	  	 

  

 i 

 (b) Rest of World 
  
 For purposes of the payment by Novartis to Tanox of royalties for the Rest of World as provided under the Agreement and this
EA Financial Appendix, the presentation of results of operations of Novartis for the Rest of World will be based on Novartis’ financial information for the Rest of World for the applicable period in the reporting format depicted as
follows: 
  
 Gross Sales (ROW) 
 less ***** 
 =        Net Sales (ROW).

  
 (c) Generally 
  
 It is the intention of Novartis and Tanox that the interpretation of these
definitions and other matters under this EA Financial Appendix will be: (a) consistent with the U.S. generally accepted accounting principles (“GAAP”) consistently applied for Tanox; and (b) international accounting standards as
consistently applied (“IAS”) for Novartis. The EA Finance Sub-Committee shall ensure consistency in accounting treatment between GAAP and IAS, where possible. 
  
 If necessary a Party will make the appropriate adjustments to the formatting of financial information it supplies under the
Agreement to conform to the format of reporting results of operations for purposes of TanNov as set forth in this EA Financial Appendix. 
  
 For purposes of the definitions in this EA Financial Appendix and the calculation of applicable profit, cost, revenue and other amounts hereunder
and under the Agreement, the Parties shall eliminate, and not include in any such amounts, any inter- and intra-company transactions ***** within or among the Parties (and/or their respective Affiliates or sublicensees), including without limitation
with respect to transfer pricing, except to the extent expressly provided otherwise in the Agreement or this EA Financial Appendix. 
  
 Notwithstanding anything to the contrary in the Agreement or this EA Financial Appendix (but without limiting any of the provisions in Article 17
(Indemnity and Insurance) of the Agreement or Article 19 (Indemnity and Insurance) of the TCA), if any Party suffers*****: 
  

	 	(i)	***** 

  

	 	(ii)	***** 

  

	 	(iii)	***** 

  

	 	(iv)	***** 

  
 (collectively “Excluded Costs”), then any such Excluded Costs shall be solely for the account of such Party, and shall not be included in any costs or expenses for the purpose of calculating of Net Profits (East Asia) (or
Net Loss (East Asia), as the case may be), to be shared under the Agreement or this EA Financial Appendix. 
  

 ii 

	2.	Duties of the EA Finance Sub-Committee 

  
 As set forth in the Agreement, the EA Finance Sub-Committee (EA FSC) shall support the TanNov JCC and the TanNov JMC with respect to accounting and
financial determinations relating to cost and profit sharing under the Agreement and other financial matters, all in accordance with the Agreement and this EA Financial Appendix. The EA FSC shall be responsible for review and administration
of operations under this EA Financial Appendix, including reviewing and recommending for approval by the TanNov JCC and TanNov JMC financial statements of TanNov and including reviewing and advising the TanNov JCC and the TanNov JMC with
respect to the following matters, all in accordance with the terms of the Agreement and this EA Financial Appendix: 
  
 (i) coordination and reporting of actual and forecasted financial results for Anti-IgE Products in East Asia on a ***** basis as provided
herein; 
  
 (ii) coordination on preparation,
approval and administration of budgets and forecasts for Development and Commercialization of Anti-IgE Products in East Asia, including, without limitation, identification, analysis and reporting with respect to budgets, forecasts and variances, all
subject to final approval as provided in the Agreement; 
  
 (iii) coordination on preparation, approval, administration and forecasting of long range plans relating to Anti-IgE Products in East Asia; 
  
 (iv) modification of reporting cycles and deadlines under this EA Financial Appendix as may be
unanimously agreed upon by all the Parties; provided, however, that in the event that a Party substantially or materially changes its internal reporting cycles and deadlines generally (that is, for Anti-IgE Products and for products
other than Anti-IgE Products), then the Parties will discuss in good faith appropriate revisions to the foregoing reporting cycles and deadlines to reasonably accommodate such change; 
  
 (v) review of the costs and expenses charged to TanNov by the Parties to determine in the first instance,
subject to the terms of the Agreement and, as applicable, final approval or disapproval by the TanNov JCC and the TanNov JMC, whether such costs and expenses are authorized to be shared by the Parties under the Agreement (including, without
limitation, in accordance with the defined terms in Section 5 below, in accordance with provisions in the Agreement relating to budget changes and variances and approvals therefore, and in accordance with the definition of “Excluded Costs”
in Section 1 of this EA Financial Appendix); 
  
 (vi) review of appropriate allocation of costs and expenses to the various cost and expense categories under Section 5 below, and between East Asia and the ROW, and to the extent applicable US and Europe (with each Party acknowledging that
any costs proposed to be allocated to the US and Europe are subject to the review and unanimous approval of such allocation by the TCA Finance Sub-Committee, subject to the provisions of Section 2. (v) and (vi) of the TCA Financial Appendix);

  
 (vii) review and assistance in calculation of
Net Profits (East Asia) (and corresponding Net Losses), subject to TanNov JMC approval, and coordination with respect to means balancing and other payments between the Parties hereunder; 
  

 iii 

 (viii) review to ensure consistent treatment, where possible, under GAAP and IAS
accounting standards (including, without limitation, with respect to “Fully Burdened Manufacturing Cost” and “Sales Returns and Allowances”); 
  
 (ix) review of each Party’s cost and/or project accounting systems and methodologies to ensure
consistent treatment for purpose of TanNov reporting; 
  
 (x) from time to time, monitor whether reimbursement of General and Administrative Expenses (East Asia), as provided for in this EA Financial Appendix, is in proportion to each Party’s relative effort in managing outside
vendors; 
  
 (xi) review of ***** (subject to the
terms of the Manufacturing and Supply Agreement(s) and to this EA Financial Appendix) and other items to be included in*****, subject to TanNov JCC and TanNov JMC approval as provided below; 
  
 (xii) review and facilitation of the resolution of financial
matters (if any) arising among the Parties with respect to the time period from start of Parties collaboration (under the Outline of Terms) until the Effective Date of the Agreement; 
  
 (xiii) coordination of the presentation of disputes arising between the Parties under the EA Financial
Appendix, for resolution in accordance with the terms of the Agreement; 
  
 (xiv) review actual inventory levels, Sales Returns and Allowances and Novartis’ methodologies for charging costs to TanNov for determination of actual results, forecasts, budgets and long range plans and the
results of applying such methodologies; and 
  
 (xv) review and coordination with respect to all other financial matters arising under the EA Financial Appendix or otherwise relating to the Parties’ cooperation under the Agreement, including, without limitation, each
Party’s methodologies for charging costs for determination of actual financial results, forecasts, budgets and long range plans and the results of applying such methodologies. 
  
 Review results and recommendations of the EA FSC shall be presented to the Tanov JCC or other appropriate Committee as
necessary. 
  

	3.	Frequency of Reporting and Other Information Exchange 

  
 The fiscal year of TanNov will be a calendar year. Reporting and other information exchange by and between each TanNov Party for TanNov revenues,
expenses, budgets, forecasts and long range plans will be performed as follows, subject to Section 5.10(b) of the TCA:  
  

					
	 Reporting Event
 (Responsible
Party)

	  	 Frequency

	  	 Timing of Submission**

	 *****
	  	 	  	 
	 *****
	  	 	  	 
	 *****
	  	 	  	 
	 *****
	  	 	  	 
	 *****
	  	 	  	 
	 *****
	  	 	  	 

  

 iv 

	
	 *****

	 *****

	 *****

	 *****

	 *****

	 *****

	 *****

	 *****

  

	*	The applicable Parties shall provide a narrative explaining variances to budgets, forecasts or long range plans for planning, settlement and decision-support purposes.

  

	**	The Parties may agree unanimously to modify the foregoing reporting cycles and deadlines. In the event that a Party substantially or materially changes its internal reporting cycles
and deadlines generally (that is, for Anti-IgE Products and for products other than Anti-IgE Products), then the Parties will discuss in good faith appropriate revisions to the foregoing reporting cycles and deadlines to reasonably accommodate such
change. 

  
 On a monthly basis, Novartis will supply
Tanox with *****. 
  
 On a monthly basis, Novartis will supply
Tanox with *****. 
  
 On a quarterly basis, within ***** of the
last day of each quarter, Novartis shall prepare and supply to Tanox *****. 
  
 On a quarterly basis (within ***** of the last day of each quarter), Novartis will provide Tanox with *****. In addition, at quarter-closes and year-ends, the Parties shall reasonably cooperate with each other, as
reasonably requested, in providing each other with available and estimated results and expenditures for East Asia and the ROW, to meet the Parties’ respective public reporting requirements, subject always to Article 13 and Sections 18.13 of the
Agreement and 5.10(b) of theTCA. After review by the EA Finance Sub-Committee as to the amounts, the EA Finance Sub-Committee will forward each such report to the TanNov JCC and TanNov JMC for their approval as required under, and subject to, the
Agreement. *****. 
  
 On a quarterly basis, together with the
reports of actual results, Novartis shall provide Tanox with *****. In addition, on a quarterly or semi-annually basis as requested, the TanNov Parties shall provide each other with information as provided in Section 8 below. 
  
 Novartis will be responsible for the preparation of consolidated reporting of
TanNov for East Asia (including the quarterly calculation of Net Profit (East Asia) or Net Loss (East Asia), as the case may be, calculated as provided in this EA Financial Appendix and the Agreement) for purposes of the determination of the
cash settlement between Tanox and Novartis for East Asia, subject to the review and approval of the TanNov JCC and the TanNov JMC. Review of draft statements, payments and related matters are set forth in Section 7 below. 
  

 v 

	4.	Budget, Forecast and Long Range Plan 

  
 All budgets (which will be prepared annually), forecasts and long range plans will be supplemented with detailed EA Plans for clinical trials, Approval
Applications, Commercial Launch, marketing, promotion and sales efforts, subject to and in accordance with the applicable terms of the Agreement. 
  
 With respect to East Asia, members of the EA FSC shall be responsible for preparation of the annual East Asia budgets for Development, and
Commercialization of Anti-IgE Products in East Asia, per annual EA Plans developed pursuant to the Agreement. The Parties shall exchange draft and preliminary budgets, budget confirmations and other budget information for East Asia in accordance
with Section 3 above. 
  
 As set forth in Section 3 above
(regarding “Forecasts”), within ***** after the end of each calendar quarter Novartis shall provide Tanox with: *****. 
  
 The EA FSC, with the assistance of Tanox and Novartis, will be responsible for identifying, analyzing and reporting all budget variances for East Asia.

  
 A ***** long-range plan (*****) for East Asia will be
established on a yearly basis during the Term of the Agreement, under the direction of the TanNov JCC, and will be provided to the Parties and submitted to the TanNov JMC for approval by ***** of each year, in accordance with Section 3 above.

  
 The obligations of Novartis to disclose Forward-Looking
Information to Tanox under this section or any other provision of the Financial Appendix shall be subject to Section 5.10(b) of the TCA. 
  

	5.	Definitions 

  
 For purposes of determining Net Sales, costs and expenses, and Net Profit and Net Loss, as the case may be (the calculation of which shall be consistent
with the Agreement and this EA Financial Appendix), to be recorded on the TanNov books and records and to be shared by the TanNov Parties under the Agreement with respect to East Asia, each TanNov Party will use its respective internal
accounting systems. As a general matter, except for costs and expenses specifically authorized to be shared by the TanNov Parties or otherwise allocated to a particular Party, as provided in the definitions and other terms of this EA Financial
Appendix or in accordance with the express terms of the Agreement, all other costs and expenses incurred by any Party in connection with the Development, manufacture or Commercialization of Anti-IgE Products in East Asia and the ROW shall be
*****. 
  
 For purposes of TanNov accounting and the definitions
set forth herein, costs and expenses incurred by a Party shall include costs and expenses incurred by a Party’s Affiliate or by a Third Party on such Party’s behalf or for its account. 
  
 “Allocable Manufacturing Overhead” shall have the meaning
set forth in the Financial Appendix to the TCA. 
  
 “Cost
of Sales” shall mean *****. 
  
 “Commercialization Successor” means the successor to some or all of a Party’s Commercialization rights under the Agreement. 
  

 vi 

 “Development Costs” shall mean an amount equal to: 
  

	 	(a)	***** 

  

	 	(b)	*****, 

  
 *****. 
  
 “Distribution/Warehousing Costs” means *****. 
  
 “Excluded Cost” shall have the meaning given thereto in Section 1 of this EA Financial Appendix. 
  
 “Fully Burdened Manufacturing Cost” means ***** 
  

	 	a)	***** 

  

	 	b)	***** 

  

	 	c)	***** 

  

	 	d)	***** 

  
 For the avoidance of doubt, “Fully Burdened Manufacturing Cost” shall not include ***** 
  
 “General and Administrative Costs (East Asia)” means ***** 
  
 “TanNov Party” or “TanNov Parties” shall have the meaning set forth in the introduction to
this EA Financial Appendix. 
  
 “Gross Profit (East
Asia)” means *****. 
  
 “Gross Sales (East
Asia)” means *****. 
  
 “Gross Sales
(ROW)” means *****. 
  
 “Marketing Costs (East
Asia)” means *****. 
  
 “Net Profits (East
Asia)” or “Net Losses (East Asia)”, as illustrated in paragraph 1 above, means *****. 
  
 “Net Sales” means Net Sales (East Asia) and/or Net Sales (ROW), as applicable. 
  
 “Net Sales (East Asia)” means *****. 
  
 “Net Sales (ROW)” means ***** 
  
 “Other Operating Income/Expense” means *****: 
  

	 	(i)	***** 

  

 vii 

	 	(ii)	***** 

  

	 	(iii)	***** 

  

	 	(iv)	***** 

  

	 	(v)	***** 

  

	 	(vi)	***** 

  
 “Sales Costs (East Asia)”, in East Asia, means *****. 
  
 “Sales Returns and Allowances (East Asia)” means, *****.  
  
 “Sales Returns and Allowances (ROW)” means *****. 
  
 “Tanox Costs and Expenses” shall mean *****. 
  
 “Tanox Profit Share” shall mean, for a given period, the
amount of Net Profits (East Asia) payable to Tanox pursuant to Section 9.1(b) of the Agreement. 
  

	6.	Foreign Exchange 

  
 The “Functional Currency” for accounting for Net Profits or Net Losses will be U.S. dollars. 
  
 For the purpose of this EA Financial Appendix, for Novartis all
currencies will be converted using the then Novartis official currency conversion system *****. 
  
 For the purpose of this Financial Appendix, for Tanox all currencies will be converted using a standard currency conversion system. 
  

	7.	Responsibility for TanNov Reporting; Payment between the TanNov Parties 

  
 The responsibility for the reporting to the EA Finance Sub-Committee, TanNov JCC and TanNov JMC shall be with Novartis (in
close cooperation with Tanox) with respect to East Asia. This will be the basis for the TanNov accounting and determining of payments to the TanNov Parties for East Asia, as provided in this Section 7. 
  
 The TanNov Parties shall share costs and expenses hereunder, Net Profit or
Net Losses (as the case may be) hereunder, for East Asia by making ***** means balancing payments in U.S. dollars between each TanNov Party such that such *****. Each TanNov Party agrees to make such payments as provided hereunder. 
  
 Necessary cash settlements between the TanNov Parties, including means
balancing payments by one Party to reimburse another Party’s *****, will be prepared by Novartis for East Asia, for review by the EA Finance Sub-Committee and review and approval by the TanNov JCC and the TanNov JMC as provided in the
Agreement. 
  
 All payments will be made by any TanNov Party owing
funds to the other for a given *****, within ***** after the end of such *****, subject to netting for any previous cash payment(s) made by either TanNov Party on behalf of the collaboration which have been approved in accordance with the Agreement
and this EA Financial Appendix to be shared through TanNov. 
  

 viii 

	8.	Payments to Tanox 

  
 The royalty, milestone, development compensation and manufacturing compensation payments with respect to East Asia and the ROW provided under Sections
11.1, 11.2, 11.4, 11.6(a) and 11.6(b) of the TCA and Sections 9.1(a), 9.2 and 9.3 of the Agreement shall be paid to Tanox by Novartis, as set forth in such Sections and Section 11.9 of the TCA and Section 9.8 of the Agreement and as further provided
below. 
  
 As regards payments due to Tanox pursuant to Section
11.6(b) of the TCA, the amount of any such payment attributable to East Asia in the *****. In the event that Novartis is obligated to make manufacturing payments under Section 8.2(h) of the Agreement, such payments shall be calculated, reported and
paid in a manner substantially similar to the manufacring payments under Section 11.6(b) of the TCA. 
  

	9.	Effective Accounting Date Termination for TanNov 

  
 For reporting and accounting purposes with respect to TanNov, the end of TanNov will be the nearest month end to the effective termination date of the
Agreement. 
  

	10.	Guidelines for Charging Costs 

  
 Subject to the express provisions of this EA Financial Appendix and the Agreement, with respect to any costs or expenses to be included in the calculation
of Net Profits (East Asia) or Net Losses (East Asia) hereunder which are not 100% attributable to activities in East Asia with respect to Anti-IgE Products or 100% attributable to the manufacture and supply of Anti-IgE Products to be sold in East
Asia (ie also incurred in part for activities in other territories and/or with respect to other products), then the Parties shall meet and agree, through the EA FSC, on a fair and accurate allocation of such costs and expenses to TanNov and outside
TanNov. 
  

	11.	Guideline for Product Sampling 

  
 The EA Finance Sub-Committee will determine how and when to pass through TanNov as a Marketing Cost in East Asia, the cost of sampling of Anti-IgE
Products in East Asia, with the cost of such Anti-IgE Product samples to be calculated on the basis of the ***** of the Anti-IgE Product *****. 
  

 ix

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00066-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00066-of-00352.parquet"}]]