Document:

Office Lease between Education Loan Servicing Corp. and Post Office Plaza

 EXHIBIT 10.1 
  
 MK-FERGUSON PLAZA 
 Cleveland, Ohio 
  
 OFFICE LEASE 
  
 LANDLORD 
  

  
 POST OFFICE PLAZA LIMITED PARTNERSHIP, 
 an Ohio limited partnership 
  
 TENANT 
  

  
 EDUCATION LOAN SERVICING CORPORATION, 
 a Delaware corporation 
  
 Suite No. 125 

 MK-FERGUSON PLAZA 
 LEASE AGREEMENT 
  
 TABLE OF CONTENTS 
  

					
			
	1.	  	DEMISE	  	1
			
	2.	  	USE OF PREMISES	  	3
			
	3.	  	ANNUAL BASE RENT	  	3
			
	4.	  	DEFINITIONS	  	4
			
	5.	  	ADJUSTMENT OF RENTS AND ADDITIONAL CHARGES	  	10
			
	6.	  	BUILDING SERVICES	  	13
			
	7.	  	RIGHTS RESERVED BY LANDLORD	  	14
			
	7A.	  	INDEMNITY AND INSURANCE	  	15
			
	8.	  	DELIVERY AND SURRENDER OF POSSESSION	  	18
			
	9.	  	LOSS OR DAMAGE TO PROPERTY	  	19
			
	10.	  	HOLDING OVER	  	19
			
	11.	  	ASSIGNMENT AND SUBLETTING	  	19
			
	12.	  	ALTERATIONS—PERSONAL PROPERTY	  	20
			
	13.	  	TENANT'S REPAIR OBLIGATION	  	21
			
	14.	  	DISPOSAL OF INFECTIOUS WASTE	  	21
			
	15.	  	UNTENANTABILITY	  	22
			
	16.	  	DEFAULT BY TENANT	  	22
			
	17.	  	SUBORDINATION OF LEASE	  	24
			
	18.	  	NOTICE	  	25
			
	19.	  	ACCESS TO BUILDING	  	25
			
	20.	  	COMMON AREAS	  	26
			
	21.	  	RELOCATION	  	26
			
	22.	  	EMINENT DOMAIN	  	26
			
	23.	  	NO WAIVER	  	27
			
	24.	  	ESTOPPEL CERTIFICATES	  	27
			
	25.	  	SECURITY DEPOSIT	  	27
			
	26.	  	RULES AND REGULATIONS	  	27
			
	27.	  	BROKER	  	28
			
	28.	  	ENTIRE AGREEMENT	  	28
			
	29.	  	RECORDING	  	28
			
	30.	  	PARAGRAPH HEADINGS	  	28
			
	31.	  	QUIET ENJOYMENT	  	29
			
	32.	  	GUARANTY:	  	29
			
	34.	  	LEASEHOLD IMPROVEMENTS:	  	33
			
	35.	  	MANDATORY TAKE-DOWN OF ADDITIONAL SPACE:	  	34
			
	36.	  	RIGHT OF SECOND REFUSAL TO LEASE ADDITIONAL SPACE:	  	35
			
	37.	  	TEMPORARY SPACE:	  	36

  

 ii 

 LEASE 
  
 THIS LEASE AGREEMENT made and entered into as of the 16th day of March, 2004, between POST OFFICE PLAZA LIMITED PARTNERSHIP, an Ohio limited partnership, having an address for purposes hereof at: Terminal Tower, 50
Public Square, Suite 1100, Cleveland, Ohio 44113-2267 (hereinafter called “Landlord”), and EDUCATION LOAN SERVICING CORPORATION, a Delaware corporation, having an address for purposes hereof at: 12760 High Bluff Drive, Suite 210, San
Diego, California 92130 (hereinafter called “Tenant”): 
  
 WITNESSETH: 
  

	1.	DEMISE; TERM; OPTIONS TO RENEW: 

  
 (a) Demise. Landlord leases to Tenant and Tenant leases from Landlord the premises which are identified as Suite No. 125 on the first
(1st) floor and a portion of the mezzanine level, as shown on Exhibit “A”, located in the building known
as MK-Ferguson Plaza, located at 1500 West Third Street, Cleveland, Ohio 44113 (hereinafter called the “Building”). For purposes of this Lease, Suite No. 125 shall be deemed to contain (i) as of the Commencement Date (as hereinafter
defined) approximately 14,707 square feet of “usable area” (as hereinafter defined) and 16,192 square feet of “rentable area” (as hereinafter defined); (ii) as of the date Tenant takes possession of the First Take-Down Space (as
hereinafter defined), approximately 18,258 square feet of “usable area” and 20,102 square feet of “rentable area”; and (iii) as of the date Tenant takes possession of the Second Take-Down Space (as hereinafter defined),
approximately 21,785 square feet of “usable area” and 23,985 square feet of “rentable area” (hereinafter called the “Premises” or the “Demised Premises”, as shown on Exhibit “A”). Each of Landlord
and Tenant acknowledge that Suite No. 125 is being built-out in one phase such that the aggregate square footage of 21,785 square feet of usable area shall be open and contiguous, that Tenant shall only have the right to occupy and use the portions
it has taken possession of pursuant to this Paragraph and Paragraph 35 and that Landlord covenants not to use, occupy or allow any access to such additional space by any other person or entity. 
  
 (b) Term. The Term of this Lease Agreement shall be for a term of ten
(10) years, unless sooner terminated or extended as hereinafter provided, commencing on the earlier to occur of the following: (i) the date on which Tenant occupies the Premises for the conduct of its business, or (ii) ten (10) business days
following the date on which Tenant receives written notice from Landlord that the leasehold improvements to be performed by Landlord or its contractor are “substantially completed” as hereinafter defined and Tenant has had an opportunity
to perform a walk-through inspection (the earlier of the foregoing dates being hereinafter referred to as the “Commencement Date”). Landlord hereby acknowledges that in order for Tenant’s business to become operational in the
Premises, Tenant must incur substantial and material costs in connection with, among other things, the ordering, delivery and set-up of equipment and the 
  

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 hiring of employees. To facilitate Tenant’s preparation for occupancy of the Premises, Landlord shall, within thirty
(30) days of the date of execution of this Lease, provide Tenant no less than ninety (90) days prior written notice of the date Landlord projects the Premises will be Substantially Completed. 
  
 (c) Options to Renew. (i) Landlord hereby grants to Tenant an option
to renew the Term of the Lease for two (2) additional terms of five (5) years each commencing with the expiration of the then current Term (each, a “Renewal Term”), exercisable by Tenant giving Landlord written notice of its intent to
renew not less than eighteen (18) months prior to the date of expiration of the Lease or the then applicable Renewal Term, as the case may be and shall be subject to the following conditions: (i) Tenant is not then in default of its obligations
under the Lease beyond all applicable notices and opportunities to cure, and (ii) all other terms and conditions of the Lease for the Renewal Term shall be the same as contained in the original Lease except that (w) the Annual Base Rent for the
Renewal Term shall be at the prevailing market rental rate as of the date the Renewal Term commences but in any event, not less than the Annual Base Rent plus escalations being paid by Tenant at the expiration of the Original Term, (x) Tenant shall
have no further options to renew the Term of this Lease after the second such renewal (if exercised), (y) the Landlord shall have no obligation to provide additional Tenant improvements except as may otherwise be agreed upon in writing by Landlord
and Tenant, and (z) the Base Year for the first (1st) Renewal Term shall be calendar year 2015 and the Base Year for
the second (2nd) Renewal term shall be calendar year 2020. In determining the prevailing market rental rate,
consideration shall be given to then available terms for comparable buildings in downtown Cleveland including free rent, base year, gross-up provisions, tenant improvement allowances, brokerage fees, architectural allowances and Common Area factors.

  
 (ii) In the event Landlord and Tenant are
unable to determine and negotiate the prevailing market rental rate within sixty (60) days after Tenant’s exercise of its renewal option, then each party’s good faith determination of the “prevailing market rental rate” shall be
submitted to arbitration by open bid with a copy to the other party, in accordance with the following procedure: 
  
 A. Not later than seventy (70) days after Tenant’s exercise of its renewal option, Landlord and Tenant shall each appoint one
independent arbitrator who shall by profession be a real estate appraiser (with the professional designation of M.A.I. or, if M.A.I. ceases to exist, a comparable designation from an equivalent professional appraiser organization) who shall have
been active over the ten (10) year period ending on the date of such appointment in appraising or leasing of commercial office properties in Cleveland, Ohio. The determination of the arbitrators shall be limited solely to the issue of whether
Landlord’s or Tenant’s submitted “prevailing market rental rate” for the Premises is the closest to the “prevailing market rental rate” for the Premises as determined by the arbitrators, taking into account all relevant
elements. 
  
 B. The two arbitrators so appointed
shall within ten (10) days of the date of the appointment of the last appointed arbitrator agree upon and appoint a 
  

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 third arbitrator who shall be qualified under the same criteria set forth hereinabove for qualification
of the initial two arbitrators. 
  
 C. The three
arbitrators shall within thirty (30) days of the appointment of the third arbitrator reach a final decision as to whether the parties shall use Landlord’s or Tenant’s submitted “prevailing market rental rate” and shall notify
Landlord and Tenant thereof in writing. 
  
 D.
The decision of the majority of the three arbitrators shall be deemed the decision of all the arbitrators and shall be binding upon Landlord and Tenant. 
  
 E. If the arbitrators fail to agree upon and appoint a third arbitrator both arbitrators shall be dismissed and Landlord and Tenant shall
each promptly select and appoint one new arbitrator each possessing the qualifications described in Subsection A. Such new arbitrators shall promptly follow the procedures outlined in Subsections A, B and C. 
  
 F. The costs of arbitration shall be paid by Landlord if
Tenant’s submitted “prevailing market rental rate” is selected and by Tenant if Landlord’s submitted “prevailing market rental rate” is selected. 
  
 G. Notwithstanding the foregoing, if either Landlord or Tenant fails to appoint an arbitrator within seventy
days (70) after Tenant exercises its renewal option as provided for in Subsection A and such failure to appoint an arbitrator is not cured within ten (10) days after receipt by such failing party of written demand to do so by the other party (which
other party shall have appointed its arbitrator prior to sending such written demand), then the arbitrator appointed by the party sending such demand shall obtain from the then president of the Cleveland Area Board of Realtors (unless such person is
then in the employ of either party, in which event, from the holder of the next highest elective office) identification of a designated second arbitrator possessing the qualifications described in Subsection A, who shall be appointed and
serve. 
  

	2.	USE OF PREMISES: 

  
 The Premises shall be used and occupied by Tenant as a business office (including, without limitation, use as a call center), for meeting purposes only
and for related purposes, and for no other purpose. 
  

	3.	ANNUAL BASE RENT: 

  
 In consideration thereof, Tenant covenants to pay Landlord without demand an “annual base rent” (as hereinafter defined) for the Premises at the
rates as are more fully set forth in Rider “A”, Paragraph 32 throughout the Term, in equal monthly installments as are more fully set forth 
  

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 in Rider “A”, each payable in advance, without deduction or set off, in legal tender of the United States of
America on the first day of each and every calendar month during the same term at Landlord’s offices in care of P.O. Box 72069, Cleveland, Ohio 44192-0069; or at such other place as Landlord may from time to time in writing designate. The
amount of such rent to be paid by Tenant is subject to adjustment from time to time as set forth in Paragraph 5. The rent reserved and all other charges hereunder not paid by Tenant when due shall bear interest at the rate of two percent (2%) per
month. Subject to adjustment as set forth in Paragraph 8, “Annual Base Rent” and utility charges shall begin to accrue on the Commencement Date. Additional Charges (as hereinafter defined) (other than utility charges) shall begin to accrue
as of January 1, 2005 in the form of increases over Base Year Operating Expenses and Taxes as hereinafter more fully described. Annual Base Rent or utility charges for any partial month during which Tenant occupies the Premises for the conduct of
its business from and after the Commencement Date shall be prorated on a per diem basis. Tenant agrees at no time to pay any monthly installment of Annual Base Rent more than one (1) month in advance of its due date. 
  

	4.	DEFINITIONS: 

  
 As used in this Lease, the following terms shall have the following respective meanings: 
  
 (a) “Annual Base Rent”—The annual rent to be paid by Tenant to Landlord pursuant to the provisions of
Paragraph 3 and Rider “A”—Paragraph 33. 
  
 (b)
“Additional Charges”—Any and all amounts due Landlord in addition to Annual Base Rent including, but not limited to, utility charges and Operating Expense and Tax adjustments pursuant to Paragraph 5 herein. 
  
 (c) “Adjusted Annual Rent”—The Annual Base Rent as hereinafter
adjusted in accordance with the provisions hereof, but in no event less than the Annual Base Rent and provided Landlord has made demand for such adjustment within two (2) years following the date upon which a statement for such Comparison Year was
required to be delivered as hereinafter provided. 
  
 (d)
“Base Operating Expenses”— The actual Building Operating Expenses per square foot of “usable area” actually incurred by Landlord for calendar year 2004. 
  
 (e) “Base Taxes”—The actual Building Taxes per square foot of “usable area” incurred by Landlord
for calendar year 2004. 
  
 (f) “Common Areas”—The
public hallways, entrances, lobbies, vestibules, stairways, corridors, passenger and freight elevators, public restrooms, loading docks and other public and/or common areas of the Building provided by Landlord for the common or joint use and benefit
of the tenants and occupants of the Building and their employees, agents, servants, customers and other invitees. 
  

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 (g) “Comparison Year”—The calendar year 2005 and each succeeding calendar year in which
any portion of the Lease Term falls. 
  
 (h) “Electric
Charges”—Tenant will be charged by Landlord for electric usage on actual meter readings of Tenant’s use of such facilities only utilizing demand registers dedicated solely to the Premises. Charges will be calculated based upon, and
shall be no greater than, the rates Tenant would be required to pay if Tenant were obtaining electric services directly from The Cleveland Electric Illuminating Company’s (“CEI”). Landlord hereby confirms that the rates Tenant would
be required to pay if Tenant were obtaining electric services directly from CEI are CEI’s General Service Rate for peak demands less then 30 kilowatts, Small General Service Rate for peak demands of 31 to 149 kilowatts, and Medium General
Service Rate for peak demands of 150 kilowatts and above. 
  
 (i)
“Tenant’s Share”—The percentage which the rentable area of the Premises is of the total rentable area of the Building, which percentage is agreed upon as being Three and Thirty-Two Hundredths percent (3.32%). Exhibit
“F” attached hereto sets forth the rentable area of the Premises and each other floor of the Building, the total rentable area of the Building, and the calculation of Tenant’s Share. In the event that additional areas are added to the
Premises under this Lease or if final as-built or CAD measurements of the finished Premises should differ from that set forth in Paragraph 1, the foregoing percentage shall be adjusted accordingly provided Landlord furnishes Tenant with updated
Exhibits “A” and “F” for Tenant’s review and approval.  
  
 (j) “Operating Expenses”—Shall mean all expenses, costs and disbursements of every kind and nature paid or incurred by or on behalf of Landlord with respect to or for the operation, maintenance,
ordinary repair, administration and management of the Building (which in no event shall exceed three (3%) percent of Building net rental income), in accordance with accepted accounting principles and sound management practices applied to
non-institutional first-class office buildings in the City of Cleveland. Without in any way limiting the generality of the foregoing, Operating Expenses may include the following (provided there is no duplication of costs): 
  
 (a) Direct Building Costs. 
  
 (1) Wages, including all fringe benefits of every kind,
Workers Compensation and payroll taxes of employees of Landlord engaged in the operation, maintenance, administration and management of the Building unless such employee is above the grade of general manager of the Building; 
  
 (2) Costs of non-capital goods, tools, supplies and services
supplied or used in or with respect to the operation, maintenance, ordinary repair, administration, and management of the Building, including, without limitation, the cost of: insurance premiums and insurance consultants; cleaning, painting,
janitorial, trash removal, security (including uniforms) and other services; reasonable legal, accounting and other consultants fees to the extent the same are not incurred as a result of Landlord’s breach of its obligations pursuant to a lease
or other agreement; operation of elevators and security systems; operation of heating, cooling, air conditioning and 
  

 5 

 ventilating systems for the Common Areas of the Building; hot and cold water, gas, steam, electricity,
sewer and other utilities for the Common Areas of the Building (excluding in each case costs which are either separately metered to tenants’ spaces in the Building or otherwise recovered directly from tenants); maintenance of and repairs to the
Building other than tenant spaces and other non-Common Areas, and to any equipment, machinery or apparatus, including elevators therein; window cleaning; service agreements (with unrelated third parties) on equipment; licenses, permits and
inspections; contesting the validity or applicability of any law if a successful contest actually reduces Operating Expenses; and landscaping, signs, plazas, furnishings, water elements, sidewalks, streets and walkways in or in public spaces
adjacent to the Building; 
  
 (3) Reasonable and
customary management fees and other costs and expenses paid to Landlord’s managing agent, or if no managing agent for the Building is employed by Landlord, a sum in lieu thereof equal to the share of the administrative management costs
hereinafter described in subsection (b) which are allocable to the Building but in no event to exceed three (3%) percent of Building net rental income; 
  
 (4) Amortization of the cost of installation of capital investment items which are installed for the purpose of reducing operating
expenses, increasing Tenant safety or which may be required by governmental authority, together with interest on such cost or the unamortized balance thereof at the current Base Rate of National City Bank or its successors per annum or at the rate
of interest paid or to be paid by Landlord for funds borrowed to finance such cost, whichever is higher. In the case of installations for the purpose of reducing Operating Expenses, Landlord shall provide a cost justification showing that the
reduction in Operating Expenses is greater than the annual amortization amount related to the capital investment item. All such costs which relate to the installation of capital investment items required by governmental authority or for the purpose
of increasing Tenant safety shall be amortized over the useful life of the capital investment item, with the useful life and amortization schedule being determined in accordance with generally accepted accounting principles and in no event to extend
beyond the reasonable life of the Building. In no calendar year shall the additions to Operating Expenses pursuant to this Section 4(j)(a)(iv) exceed the Operating Expenses saved in such calendar year by reason of a capital investment item made
pursuant to this Section 4(j)(a)(iv) for the purpose of reducing Operating Expenses. 
  
 (5) Rentals (including interest charges) paid by Landlord to unrelated third partes with respect to machinery, equipment, tools,
materials, facilities or systems installed or used after completion of the Building and provided or used by Landlord for the normal operation, maintenance, administration and management of the Building; 
  
 (6) Those taxes, duties, charges, levies and assessments
which are expenses as a part of the Building’s operation, maintenance and management, but which are not included within Taxes (as defined below), such as sales, use, payroll and utility taxes; 
  
 (7) Provided the Building Common Areas and the Premises are
in compliance with laws (as described below) prior to the execution of this Lease (the cost of such compliance 
  

 6 

 shall be solely upon Landlord), all expenses and costs incurred by Landlord with respect to the Common
Areas of the Building (other than for capital improvements, which are covered by item (4) above) as a result of or in order to comply with changes in laws following the execution of this Lease, including, without limitation, laws pertaining to the
Americans with Disabilities Act (“ADA”), energy or natural resource conservation or environmental protection (such as the costs of securing alternative sources of utilities, energy or other products or services, and the costs of making the
Building or the Premises compatible with the use of such alternative sources); and Landlord represents that the Common Areas of the Building are currently ADA compliant and otherwise in compliance with laws. 
  
 (8) All charges, taxes, surcharges, assessments or penalties
imposed by any government agency or public utility as a means of conserving or controlling the consumption of water, gas, electricity, energy sources or products, natural resources, or other products or services. 
  
 (b) Indirect or Shared Building Costs. 
  
 To avoid the duplication of facilities or services for
office buildings in the Tower City area (including the Building) which are under common ownership or control of Landlord or its affiliated entities (“Related Tower City Buildings”), certain services and/or facilities such as administrative
management, building and grounds, central energy plant, HVAC service and security (“Common Services or Facilities”) will be furnished to Related Tower City Buildings by affiliated entities of Landlord per Exhibit “CSF” attached
hereto and made a part hereof; provided, however, that Landlord’s inclusion of the expenses, costs and disbursements of the Common Services or Facilities (“Shared Expenses”) in the Operating Expenses is subject to the following:

  
 (i) Landlord hereby represents and warrants
that the proration of the Shared Expenses shall be calculated in the same manner as Tenant’s Share is calculated and, upon Tenant’s request, Landlord shall provide the backup calculations of area and allocations used; 
  
 (ii) The definitions set forth in this Lease for Operating
Expenses, Operating Expenses-Exclusions and Operating Expense-Adjustments, and all related definitions, shall apply to all Shared Expenses as well as to non-Shared Expenses. 
  
 (iii) With each estimated or actual Operating Expenses, Landlord shall disclose to Tenant those cost centers
that are Shared Expenses and those that depend solely on the Building (“Non-Shared Operating Expenses”), and those practices shall be consistent from year to year so long as The Related Tower City Buildings remain the same as of the date
of the Lease. Landlord agrees to notify Tenant of any change in The Related Tower City Buildings. In the event the make-up of the Related Tower City Buildings does change, the revised calculations shall be adjusted as necessary in both the Base Year
and Comparison Year. 
  
 (iv) The provisions of
Section 5 shall apply fully to Shared Expenses as well as to Non-Shared Operating Expenses; 
  

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 (v) Without limiting the foregoing, Landlord represents and warrants that the allocation
of Shared Expenses among the Building and the balance of the Related Tower City Buildings on Exhibit CSF has been, and that all allocations of Shared Expenses shall continue to be, calculated in a fair and equitable manner, including, without
limitation, without duplication of costs or expenses for management, supervision or otherwise. 
  
 (k) “Operating Expenses-Exclusions”—Operating expenses shall exclude the following: 
  
 (i) Taxes (as defined in Subparagraph 4(o); 
  
 (ii) Costs incurred by Landlord with respect to goods and services (including utilities) supplied to tenants and occupants of the Building
to the extent that such tenants and occupants are obligated to directly reimburse Landlord for such costs; 
  
 (iii) Costs incurred by Landlord for the repair of damage to the Building to the extent that Landlord is reimbursed by insurance proceeds;

  
 (iv) Costs incurred by Landlord with respect
to the installation of tenant improvements made for existing and new tenants in the Building; 
  
 (v) Depreciation and interest and principal on mortgages encumbering the Building; 
  
 (vi) Legal expenses incurred in negotiating, modifying and
enforcing the terms of any lease; 
  
 (vii) Cost
of any capital improvement made after completion of the Building other than those described in clause (j)(a)(4) above, and 
  
 (viii) Expenses incurred by Landlord in leasing the Building. 
  
 (l) “Operating Expense-Adjustments”—In the event that during any period, whether during the year established
for Base Operating Expenses or in any Comparison Year, less than ninety-five percent (95%) of the rentable area of the Building is occupied, the Operating Expenses for both the Base Operating Expenses and the Comparison Year shall be adjusted to
what the Operating Expenses for the Comparison Year would have been if ninety-five percent (95%) of the rentable area of the Building had been occupied throughout the such applicable years. As part of Landlord’s statement of Operating Expenses
(as provided in Section 5 below), Landlord shall include detailed written evidence of Landlord’s calculation of the Operating Expense-Adjustments to Tenant. Landlord’s calculation of the Operating Expenses and the Operating
Expense-Adjustments and all related computations and records shall be conducted and maintained consistently for the Base Year and all Comparison Years. 
  

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 (m) “Usable Area”—As used in this Lease the term “usable area” measures the
actual occupiable area of the Premises and shall mean: (x) with respect to the Premises, the area as computed by measuring the inside finished surface of the dominant portion of the permanent outer walls of the Building, the finished surface of the
office side of corridors and other permanent walls which separate the Premises from the Building core or public corridor or common area, and the center line of any partition which separates the Premises from adjoining premises. No deductions shall
be made for space occupied by structural or functional columns and projections. In the event the outer wall is solid and without windows, the outer wall bounds shall include six (6) inches of the outer wall thickness; and (y) with respect to the
Building, the aggregate of the area of all space in the Building being offered by lease by Landlord as determined in accordance with the aforedescribed method of measurement. 
  
 (n) “Rentable Area”—As used in this Lease, the term “rentable area” shall mean (x) with respect to
the Premises, the square footage figure on which Tenant’s Annual Base Rent is based which shall be equal to the usable area of the Premises which Tenant actually occupies multiplied by an additional common area factor of one hundred ten and
one-tenth percent (110.1%); and (y) with respect to any Building floor, the floor area computed by measuring to the inside finished surface of the dominant portion of the permanent outer Building walls, excluding any major vertical penetrations of
the floor. 
  
 (o) “Taxes”—The real estate taxes
and assessments, special or otherwise, sewer charges, if any, and all payments or service charges to governmental authorities in lieu of real estate taxes or assessments, including expenses incurred in connection with disputing or contesting the
amount thereof levied or assessed for the full or partial Comparison Year in question upon or with respect to the Building and the land upon which it is located by federal, state or local governments. Should any governmental authority having
jurisdiction impose a tax and/or assessment (other than net income or franchise tax) upon or against the rentals or Additional Charges payable hereunder or on the privilege of renting, leasing or letting real property, either by way of substitution
for the taxes and assessment levied or assessed against such land and such buildings, or in addition thereto, such tax and/or assessment shall be deemed to constitute a tax and/or assessment against such land and improvements. To the best of
Landlord’s knowledge, information and belief, there are no pending or contemplated tax complaints with respect to the Building. 
  
 (p) “Substantial Completion”—As used in this Lease, the term “substantially completed” or “substantial completion”
shall mean such time as: (i) the Premises is reasonably ready and available for Tenant’s use and reasonably approved by Tenant; (ii) the Premises has been cleared of all construction materials and is “broom-clean”; (iii) there remains
no more than a “punch list” of items of a minor nature to be completed by Landlord’s contractor excluding long-lead delivery items and above-standard items; and (iv) Tenant has been given the opportunity to perform a walk-through
inspection of the Demised Premises. 
  
 Each of Landlord and
Tenant acknowledge that the substantial completion of Landlord’s Work (as hereinafter described) is dependent, in part, upon Landlord’s timely notice to Tenant of Landlord’s need to receive input from Tenant regarding decisions at
certain points in 
  

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 the construction schedule attached hereto and made a part hereof as Exhibit “G” and correspondingly,
Tenant’s timely response to such Landlord requests. Provided Landlord notifies Tenant of such proposed requests (which shall include sufficient information and range choices for Tenant’s consideration) with respect to each Tenant decision
which may be required, to be exercised by notifying both Bob Hart (by telephone 216-337-0768 with confirmation by facsimile to 216-283-8866) and David Harmon (by telephone 614-837-6715 with confirmation by facsimile to 614-837-6715) and its
respective due date in order to maintain the construction schedule, then Tenant covenants to respond to Landlord’s request within one (1) business day or such longer time as permitted by Landlord. 
  

	5.	ADJUSTMENT OF RENTS AND ADDITIONAL CHARGES: 

  
 (a) Operating Expenses and Taxes—In any Comparison Year, Tenant shall pay as Additional Charges, Tenant’s Share of the increase, if any, in
Operating Expenses and Taxes for such Comparison Year over and above the Base Operating Expenses (subject to the limitation hereinafter described in subsection [v]) and Taxes. Tenant shall pay such Additional Charges in the following manner:

  
 (i) Prior to the end of each Comparison Year
or as soon thereafter as reasonably practicable (but in no event later than April 30 following the end of such Comparison Year), Landlord shall furnish to Tenant a statement showing Landlord’s estimate of Operating Expenses and Taxes for the
Comparison Year, the amount of any Additional Charges due from Tenant based upon that estimate and Landlord’s calculation of the Operating Expenses-Adjustment; 
  
 (ii) Commencing as of January 1st of each Comparison Year and thereafter as of January 1st of each
subsequent Comparison Year, on or before the first day of each calendar month, subject to the limitation hereinafter described in subsection (v), Tenant shall pay Landlord one-twelfth (1/12) of the amount of the estimated Additional Charges due from
Tenant for the Comparison Year, as shown by the statement most recently provided by Landlord; provided, however, that for any partial Comparison Year, on or before the first day of each calendar month during any partial Comparison Year within the
Lease Term, Tenant shall pay to Landlord a sum equal to the total estimated Additional Charges due from Tenant for that partial Comparison Year (based on the proration in clause (iv) of this Subparagraph) divided by the number of calendar months in
that partial Comparison Year (counting any fractional calendar months on a per diem basis as provided in section 5(a)(iv) below). Subject to subparagraph 5(a)(iv) below, if Landlord’s statement is furnished after January 1st of a Comparison
Year, on or before the first day of the first calendar month following Tenant’s receipt of Landlord’s statement, in addition to the monthly installment of estimated Additional Charges for the Comparison Year due on that date, Tenant shall
pay such amount of the estimated Additional Charges for each calendar month or fraction thereof that has already elapsed in that Comparison Year. 
  
 (iii) There shall be a final adjustment at the end of each Comparison Year, to reflect actual Operating Expenses and Taxes as provided in
Paragraph 5(c); and 
  

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 (iv) If the Commencement Date is other than January 1st, or the Lease Term expires or
terminates on a day other than December 31st, the Additional Charges payable by Tenant during any partial Comparison Year shall be prorated on a daily basis, based on a 360-day year. 
  
 (v) Annual increases in Tenant’s Share of “Controllable Operating Expenses” (as hereinafter
defined) shall not exceed four percent (4%) of the corresponding charge for the immediately preceding calendar year on a “cumulative” (as hereinafter defined) basis. “Controllable Operating Expenses” shall mean all Operating
Expenses other than “Non-Controllable Operating Expenses” (as hereinafter defined). “Non-Controllable Operating Expenses” shall mean utility charges, insurance premiums and expenses resulting directly from governmental action so
long as they otherwise qualify as Operating Expenses. Upon request, Landlord agrees to furnish Tenant reasonably suitable documentary evidence of any increases included in Non-Controllable Operating Expenses. There shall be no limitation on
increases in Tenant’s Share of Non-Controllable Operating Expenses and there shall be no automatic or minimum increases in Non-Controllable Operating Expenses. The following examples will serve to illustrate the meaning of the word
“cumulative” as applied to capped increases on Controllable Operating Expenses or “COE”: suppose calendar year 2005 COE increases over Base Year 2004 COE were 2.5%, calendar year 2006 COE increases over Base Year 2004 COE were
3.5% and calendar year 2007 COE increases over Base Year 2004 COE were 6.5% and calendar year 2008 COE increases over Base Year 2004 COE were 3.75%. Since actual COE increases in 2005 and 2006 would be below the four percent (4%) cap, Tenant would
be responsible only for actual increases but the cumulative differences between the cap and actual increases would be two percent (2%) (1-1/2% in 2005 and .5% in 2006). Landlord could add the two percent (2%) cumulative differences to the four
percent (4%) cap in 2007 so Tenant’s Share of COE increases in that calendar year would be capped at six percent (6%). In 2008, Tenant would be responsible only for actual increases (amounting to 3.75%) and Landlord would be entitled to carry
forward the difference between the cap and actual of .25% to a subsequent Comparison Year. 
  
 (b) Electric Charges—Tenant’s Electric Charges for electric service to the Premises, including but not limited to heating, air conditioning,
lights and outlets, shall be separately metered and billed monthly in accordance with Subparagraph 4(g) herein commencing with the Commencement Date. 
  
 (c) Final Statement—As soon as practicable after the end of each Comparison Year (but in no event later than April 30 following the end of such
Comparison Year), Landlord shall present Tenant with a final statement of actual Operating Expenses and Taxes for that Comparison Year and Landlord’s calculation of the Operating Expenses-Adjustment for that Comparison Year. Within thirty (30)
days of presentation of the final statement, Tenant shall pay Landlord, as Additional Charges, any amount due for Tenant’s Share of Taxes and Operating Expenses. Any credit due Tenant for overpayment of Tenant’s Share of Taxes or Operating
Expenses shall be credited against the monthly installments of Annual Base Rent next coming due (except that Landlord shall refund to Tenant the amount of any such credit for the final Comparison Year in the Lease Term which amount shall be paid to
Tenant within thirty (30) days following the expiration of the Term or any applicable Renewal Term). Tenant shall have ninety (90) days after presentation of Landlord’s final statement of actual Taxes and Operating Expenses 
  

 11 

 within which to object in writing to the accuracy of the statement; after expiration of said ninety (90) day period,
Landlord’s statement shall be conclusive and binding on Tenant. Objection by Tenant shall not excuse or abate Tenant’s obligation to make the payments required by this paragraph pending resolution to Tenant’s objection. 
  
 (d) Audit of Books and Records—Upon Tenant’s request, made at any
time during the ninety (90) day period after the submission of the applicable Landlord’s final statement to Tenant, Landlord shall allow Tenant or Tenant’s agents, upon not less than ten (10) days’ advance notice to Landlord, to
examine, during normal business hours at Landlord’s office in Cleveland, Ohio, where such records are kept, such books, purchase orders, invoices, payrolls and other records as may be reasonably necessary in order to permit Tenant to verify the
information set forth in Landlord’s final statement of Operating Expenses. 
  
 (e) Verification and Disputes—Provided Tenant has timely objected to Landlord’s final statement of actual Taxes and Operating Expenses for either the Base Year or a Comparison Year and such dispute is not
resolved by the parties hereto within forty-five (45) days after Tenant’s objection, then an independent firm of certified public accountants shall be selected by lot (the “CPA Firm”). Landlord and Tenant shall each supply the names
of two independent certified public accounting firms which are experienced in auditing the books and records of persons owning and/or operating office buildings similar to the Building and an employee of Tenant shall randomly draw one (1) name in
the presence of an employee of Landlord. The CPA Firm shall be deemed “independent” if the CPA Firm has not acted in any capacity for either Landlord or Tenant during the previous five (5) years. The CPA Firm shall review the objections
raised by Tenant and issue a written determination of the correct amount of Operating Expenses and/or Taxes for the period being examined within ninety (90) days of undertaking the audit. The determination of the CPA Firm shall be conclusive and
binding upon the parties. The fees and expenses incurred in obtaining such an opinion shall be borne by the party adversely affected thereby; and if more than one item is disputed and the opinion adversely affects both parties, the fees and expenses
shall be borne by the parties in such equitable proportions as are determined by the accountants hearing the matter. 
  
 (f) Books and Records—Landlord shall cause to be kept in Cleveland, Ohio, true and complete copies of the books and records of Operating Expenses
covering not less than the current calendar year and the three (3) prior calendar years as they begin to accumulate. Landlord shall cause such books and records to be kept in accordance with generally accepted accounting practices for real estate,
consistently maintained on an accrual basis. Without limiting the foregoing or any of Landlord’s other obligations hereunder, Landlord agrees that it shall use its commercially reasonable efforts to ensure that the Landlord’s budget shall
be consistently prepared and carried out in all years. 
  

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	6.	BUILDING SERVICES: 

  
 Landlord shall furnish Tenant the following services: 
  
 (a) Cleaning, and janitor services, standard for the Building as set forth in Exhibit “JS” attached hereto and incorporated herein which
reflects the schedule of such services (except for the cleaning and maintenance of Tenant’s computer room and secure facilities which Tenant shall have the right to perform without Landlord’s prior written consent or supervision by
Landlord, Tenant shall not engage or provide cleaning, janitor, or maintenance services without Landlord’s prior written consent, and if consent is given, such services shall always be subject to supervision by Landlord, and at Tenant’s
sole responsibility and expense); 
  
 (b) Heat or air conditioning
during “normal business hours” (as hereinafter defined) and for up to fifty (50) additional hours per month at no additional cost to Tenant to accommodate Tenant’s operations outside of normal business hour. However, electricity to
operate the heat pumps servicing the Premises shall be at Tenant’s cost and shall be included in Tenant’s monthly electricity bill. If Tenant requires heat and air conditioning service during other than normal business hours in excess of
fifty (50) additional hours per month, there will be a Fifteen Dollars ($15.00) hourly per zone charge for central plant condenser water distribution; 
  
 (c) Cold and hot water at standard Building temperatures for sanitary purposes only; 
  
 (d) Passenger and freight elevator service twenty-four (24) hours per day. To the extent possible, Tenant’s need for
freight elevator service shall be scheduled in advance with Landlord or the Building management. Notwithstanding the foregoing, Landlord shall permit Tenant to use the freight elevators to move (i) into the Temporary Space, (ii) into the Premises at
any time following receipt of Landlord’s ten (10) business day notice of Substantial Completion, and (iii) out of the Premises, in each instance, such use may be during or after normal business hours at no additional cost to Tenant. If
requested by Tenant, provided that both elevators are in working order, Landlord shall provide exclusive use of at least one freight elevator for up to three (3) consecutive days, without charge; 
  
 (e) As long as Landlord provides electrical service in said Building, Tenant
shall obtain all such service used in the Premises from Landlord and shall pay Landlord the Electric Charges therefor in accordance with metered rates as described in Subparagraph 4(g). Upon not less than sixty (60) days prior written notice to
Tenant, Landlord may cease to provide electrical service to the Premises without liability or responsibility to Tenant except to connect, within the period of notice, the electrical system of the Premises with another source of electrical service;
thereafter, Tenant shall pay the charges for such service directly to the public utility, or municipal corporation supplying the same upon billings therefor. Tenant shall purchase from Landlord all light bulbs, fluorescent tubes, ballasts or
starters used in said Premises provided the cost of the same are at reasonable rates. All expense of maintenance and cleaning of fluorescent lighting equipment including but not limited to the replacement of ballasts and starters located in the
Premises shall be borne by Tenant unless such costs are recovered pursuant to product warranties; and all electricity used during cleaning service or alterations and repairs in the Premises shall be paid for by Tenant; 
  
 (f) The term “normal business hours” as used in this Paragraph 6
shall mean Monday to Friday, inclusive from 8:00 A.M. to 6:00 P.M. and Saturday mornings from 8:00 A.M. to 1:00 
  

 13 

 P.M., but excluding all legal holidays. Notwithstanding the foregoing, Tenant shall have access to the Premises
twenty-four (24) hours per day, seven (7) days per week; 
  
 (g)
Landlord, while not warranting that any of the Building services stipulated in this Paragraph 6 shall be free from interruptions or suspensions caused by repairs, renewals, improvements, alterations, strikes, lockouts, accidents, inability of
Landlord to procure such service, or to obtain fuel or supplies, or for other cause or causes beyond Landlord’s reasonable control, shall nevertheless diligently attempt to make such repairs to Building distribution lines and facilities as may
be required to restore any such service so interrupted or suspended. An interruption or suspension of, or fluctuation in, any Building service (resulting from any of said cause or causes) shall never be deemed an eviction or disturbance of
Tenant’s use and possession of the Premises, or any part thereof, nor render Landlord liable to Tenant for damages, nor relieve Tenant from performance of Tenant’s covenants and agreements hereunder, including, without limitation,
Tenant’s obligation to pay Annual Base Rent and Additional Charges. Notwithstanding the foregoing, in the event of any interruption or suspension of such Building services (other than utility services not within Landlord’s control), and
such interruption or suspension renders the Premises untenantable for a period greater than forty-eight (48) hours, Annual Base Rent due after forty-eight (48) hours shall be abated until service is restored. In the event such condition continues
for a period of thirty (30) consecutive days, Tenant shall have the right, exercisable by written notice to Landlord, to terminate this Lease Agreement. 
  

	7.	RIGHTS RESERVED BY LANDLORD: 

  
 Landlord reserves the following rights: 
  
 (a) To change the street address or name of the Building or the unit number of the Premises. Landlord agrees, however, to notify Tenant of any intended
change of Building name or street address not less than ninety (90) days prior to the effective date of such change. Landlord further reserves the right to make changes in the arrangement or location of entrances, passageways, doors, doorways,
corridors, elevators, stairs, toilets or other public parts of the Building which do not materially and adversely affect the Premises, access to or from the Premises to the Common Areas of the Building or the Related Tower City Buildings, without
liability to or consent of Tenant; 
  
 (b) To designate all
sources furnishing sign painting, lettering, vending machines, towel or toilet supplies, or other similar services required in the Premises; 
  
 (c) To enter during the last ninety (90) days of the Term, if Tenant shall have removed substantially all of Tenant’s property from the Premises, for
the purpose of altering, remodeling, repairing, renovating or otherwise preparing the Premises for re-tenanting and in such event the Term of this Lease Agreement shall be deemed terminated as of the date Landlord makes such entry; 
  

 14 

 (d) Subject to Tenant’s use and enjoyment of the Premises pursuant to this Lease Agreement, to grant
anyone the exclusive privilege of conducting any particular business or activity in the Building; 
  
 (e) Upon reasonable notice to Tenant, to enter the Premises at all reasonable times; (1) for the making of such inspections, repairs, alterations,
improvements or additions of, or to the Premises or the Building as Landlord may deem necessary; (2) to exhibit the Premises to others during the last twelve (12) months of the Term hereunder; and (3) for any purpose whatsoever related to the
safety, protection, or preservation of the Premises or of the Building. Notwithstanding the foregoing, Landlord agrees to take reasonable efforts not to cause unnecessary inconvenience to or interruption of Tenant’s occupancy of the Premises
and that no such alterations, improvements or additions to the Premises shall materially and adversely affect the Premises without Tenant’s prior consent; 
  

(f) At any time or times Landlord, either voluntarily or pursuant to governmental requirements, may, at Landlord’s expense, make repairs,
alterations or improvements in or to the Building or any part thereof, and in emergency situations, Landlord may temporarily close entrances, doors, corridors, elevators or other public facilities in order to perform such repairs, alterations or
improvements. Notwithstanding the foregoing, Landlord agrees to take reasonable efforts not to cause unnecessary inconvenience to or interruption of Tenant’s occupancy of the Premises; 
  
 (g) To charge Tenant reasonable expenses (excluding overtime or premium costs
incurred by Landlord unless expressly approved by Tenant) resulting from repairs, alterations, decorating, or other work performed in the Premises or the Building at Tenant’s request; 
  

	7A.	INDEMNITY AND INSURANCE: 

  
 (a) Mutual Indemnification. 
  
 Tenant shall indemnify and save Landlord harmless from legal action, damages, loss, liability and other expense (including reasonable
attorney fees) in connection with loss of life, bodily or personal injury or property damage arising from or out of Tenant’s use or occupancy of the Premises except to the extent that such legal action, damages, loss, liability or other expense
results from any act, omission or neglect of Landlord, its respective agents, contractors, employees or persons claiming through it. Landlord shall indemnify and save Tenant harmless from legal action, damages, loss, liability and any other expense
(including reasonable attorney fees) in connection with loss of life, bodily or personal injury or property damage, arising from or out of the use of the Common Areas of the Building, except to the extent that such legal action, damages, loss,
liability or other expense results from any act, omission or neglect of Tenant, its respective agents, contractors, employees or persons claiming through it. 
  

 15 

 (b) Tenant’s Insurance. 
  
 Tenant covenants and agrees that from and after the date of delivery of the Premises from Landlord to
Tenant, and during the Term of this Lease or any renewal thereof, Tenant will carry and maintain, at its sole cost and expense, the following types of insurance, naming both Tenant and Landlord as insureds, in the amount specified and in the form
hereinafter provided for with insurance companies authorized to do business in the state in which the Premises is located and rate A/VII or better in the most current edition of Best’s Insurance Report: 
  
 (i) Commercial General Liability Insurance. Tenant
shall keep in full force and effect commercial general liability insurance in respect to both direct and indirect damage to buildings, structures or other tangible property or any consequential loss of use of such property, in an amount of not less
than $3,000,000 per claim with a $2,000,000 aggregate limit, adjusted annually for inflation, written on a combined single limit per occurrence basis for property damage, personal injury and bodily injury or death of one or more persons. 

 
 (ii) Personal Property, Alterations, Improvements and
Betterments. To the extent Tenant performs any leasehold improvements or alterations (“Tenant’s Improvements”) to the Premises, Tenant shall at all times, following the completion thereof, maintain in full force and effect a
policy(s) of all risk insurance including coverage for sprinkler damage, vandalism and malicious mischief, covering all of Tenant’s Personal Property, including improvements added to the Premises, to the extent of their full replacement costs
as updated from time to time during the Term of this Lease. 
  
 (iii) Additional Hazards. Tenant agrees that it will not keep, maintain or use in or upon the Premises any article which may be prohibited by the standard form of all risk insurance coverage. Tenant agrees to
pay any increase in premium for All Risk Coverage resulting from the maintenance of such prohibited articles that may be charged during the Term of this Lease or renewal period thereof for the amount of any insurance which may be carried by the
Landlord on the Premises. Said additional premiums shall be payable by Tenant to Landlord upon ten (10) days written notice to Tenant. 
  
 (iv) Blanket Policies. Tenant may maintain any of its required insurances under blanket policies of insurance covering the Premises
and any other premises of Tenant, or companies affiliated with Tenant, provided that the coverage afforded will not be reduced or diminished by reason of the use of such blanket policy. 
  
 (v) Policy(s) and/or Certificates of Insurance. The above mentioned policy(s) or certificate(s) of
insurance are to be provided by Tenant to Landlord prior to occupancy and at least annually thereafter or as requested by the Landlord. The coverage evidenced by the policy(s) or certificate(s) of insurance will be with insurance company(s)
acceptable to the Landlord and will be for a period of not less than one (1) year, and will provide that the Landlord be given written notice thirty (30) days prior to the expiration, material alteration, cancellation, non-renewal or replacement of
the existing policy(s), with the further understanding that should the Tenant fail to furnish said notice or policies as is provided in this Lease, and at the times 
  

 16 

 herein provided, the Landlord may obtain such insurance and the premiums on such insurance shall be
deemed Additional Charges to be paid by the Tenant to the Landlord upon demand. 
  
 (vi) Notice of Loss. Tenant shall notify Landlord forthwith in the event of any damage to persons or property occurring on the
Premises from fire, any other casualty, or serious injury. 
  
 (c)
Landlord’s Insurance. 
  
 Landlord covenants and
agrees that from and after the date of delivery of the Premises from Landlord to Tenant and during the Term of this Lease or any renewal thereof, Landlord will carry and maintain, with regard to the Building, the following types of insurance, in the
amounts specified and in the form hereinafter provided for with insurance companies authorized to do business in the state in which the Premises is located and rated A/VII or better in the most current edition of Best’s Insurance Report:

  
 (i) Commercial General Liability
Insurance. Landlord shall keep and maintain in full force and effect commercial general liability insurance in an amount not less than $3,000,000, adjusted annually for inflation, written on a combined single limit per occurrence basis for
property damage and personal and bodily injury or death of one or more persons. 
  
 (ii) All Risk Coverage and Rental Income Insurance. Landlord shall, at all times, keep and maintain in full force and effect all
risk policy(s) of insurance, including coverage for sprinkler damage, vandalism and malicious mischief, covering the roof, structural portions and perimeter walls of the Building and Premises (excluding Tenant’s fixtures, merchandise, other
personal property and Tenant’s Improvements, if any) in an amount not less than their full replacement cost (exclusive of the cost of excavations, foundations and footings) updated from time to time during the Term of this Lease or the amount
of such insurance which Landlord’s mortgage lender may require Landlord to maintain, whichever is greater. 
  
 (iii) Landlord may maintain any of its required insurance under blanket policies of insurance covering said Premises and any other
premises of the Landlord or companies affiliated with the Landlord, provided that the coverage afforded will not be reduced or diminished by reason of the use of such blanket policy of insurance. 
  
 (iv) Policy(s) and/or Certificates of Insurance.
Landlord shall provide certificates of insurance to Tenant prior to occupancy and thereafter as requested by the Tenant but no more frequently than annually. 
  
 (d) Waiver of Subrogation. 
  
 Notwithstanding anything to the contrary contained elsewhere in this Lease, or prohibited by law, neither Landlord nor Tenant shall be liable to the other
party or to any insurance company insuring the other party by way of subrogated rights, or otherwise, for any loss or damage caused by fire or any other hazard or peril to any building structure, or other tangible 
  

 17 

 property, or any resulting loss of income that is insurable, even though such loss or damage may have been occasioned by
the negligence of such party, its agents or employees. 
  
 (e)
Landlord Not Responsible for Acts of Others. 
  
 Landlord
shall not be responsible or liable to Tenant, or those claiming by, through or under Tenant, for any loss or damage to their person or property resulting from the acts or omissions of persons occupying space adjoining or adjacent to the Premises or
connected to the Premises or any other part of the Building caused by such events as breaking or falling of electrical cables and wires, the breaking, bursting, stoppage or leaking of water, gas, sewer or steam pipes. 
  

	8.	DELIVERY AND SURRENDER OF POSSESSION: 

  
 (a) If Landlord shall be unable to deliver possession of the Premises to Tenant by July 19, 2004 (the “Outside Date”) because of
any reason other than delays by Tenant in rendering timely decisions as provided in Paragraph 4(o) and Exhibit “G”: 
  
 (i) Tenant shall receive an abatement of Annual Base Rent (and shall not be obligated to pay any Additional Charges) to be calculated as
follows: (the sum of two (2) days Base Annual Rent) multiplied by the number of days following the Outside Date that possession is delayed; 
  
 (ii) Tenant agrees to accept the foregoing as liquidated damages, in full satisfaction for the failure of Landlord to deliver possession
by the Outside Date by reason of said delay, and to the exclusion of all other claims and rights which Tenant might otherwise have by reason of delivery of possession not being made by the Outside Date. 
  
 (b) Subject to the provisions of Paragraph 4(o), taking of
possession by Tenant of the Premises shall be conclusive evidence as against Tenant that the Premises is in good order and satisfactory condition when Tenant so takes possession except for latent defects, punch list items, other matters discovered
by Tenant within one (1) year following the Commencement Date. No representation respecting the condition of the Premises or the Building has been made by Landlord to Tenant unless contained herein; and no promise of Landlord to prepare, alter or
improve the Premises for Tenant’s use and occupancy shall be binding upon Landlord unless contained herein or in Exhibit “B.” This Lease does not grant any rights to light or air over property except over public ways kept open by
public authority, and Landlord shall not be liable to Tenant for any expense, injury, death, loss or damages resulting from work done in, or upon, by reason of the use of, any adjacent or nearby building, land or public or private way. 

 
 (c) At the expiration, or earlier termination in any
manner, of the Term hereof, Tenant shall quit and surrender the Premises broom clean together with all installations, improvements and alterations (including partitions) which may have been installed by Landlord or Tenant. The Premises shall be in
as good condition and repair as when possession was 
  

 18 

 delivered, reasonable use and wear, loss or damage by fire, the elements or other casualty not resulting
from the willful or negligent acts of Tenant, Tenant’s agents, employees, or invitees excepted, failing which Landlord may restore the Premises to such condition and Tenant shall pay the cost thereof. 
  

	9.	LOSS OR DAMAGE TO PROPERTY: 

  
 All personal property belonging to Tenant or to any other person located in or about the Premises or the Building shall be there at the sole risk of
Tenant or such other person, and neither Landlord nor Landlord’s agents or employees shall be liable for the theft or misappropriation thereof, nor for any damage or injury thereto, nor for death or injury of Tenant or any other person or
damage to property caused by water, snow, frost, steam, heat, cold, dampness, falling plaster, explosions, sewers or sewerage, gas, odors, noise, the bursting or leaking of pipes, plumbing, electrical wiring, and equipment and fixtures of all kinds,
unless such damage or injury was proximately caused by the negligent act or omission of Landlord or its agents or employees or by any act or neglect of other tenants or occupants of the Building. 
  

	10.	HOLDING OVER: 

  
 If Tenant shall hold over and beyond the Term of this Lease with the consent expressed or implied of Landlord, such holding over shall be construed to be
a tenancy only from month to month and for the first ninety (90) days, shall be at one hundred twenty-five percent (125%) of then Annual Base Rent and thereafter shall be increased to one hundred fifty percent (150%) of the then Annual Base Rent,
plus all Additional Charges as above specified for such time as Tenant may continue its occupancy. Notwithstanding anything contained herein to the contrary, nothing contained in this subparagraph shall be deemed or construed to give Tenant the
right to hold over. Tenant shall not be permitted to hold over if Landlord gives Tenant not less than ninety (90) days prior written notice before the expiration of the Term of this Lease that Tenant may not hold over. 
  

	11.	ASSIGNMENT AND SUBLETTING: 

  
 Tenant shall not, without the prior written consent of Landlord in each instance, which consent shall not be unreasonably withheld, conditioned or
delayed; (a) assign, mortgage, hypothecate or convey this Lease or any interest therein; (b) allow any transfer hereof or any lien upon Tenant’s interest by operation of law; (c) sublet occupancy of the Premises or any part thereof by anyone
other than Tenant. Consent to any such assignment, conveyance, or subletting by Landlord shall not operate as a waiver of the necessity for a consent to any subsequent assignment, conveyance or subletting, and the terms of such consent shall be
binding upon any person holding by, under, or through Tenant. Such consent shall not relieve Tenant from liability hereunder for the payment of Annual Base Rent and Additional Charges or performance or observance of any of the terms and conditions
of this Lease. Notwithstanding the foregoing, Tenant may assign, sublease or convey its interest in this Lease Agreement to a subsidiary or affiliate of Tenant or a successor by merger or reorganization to Tenant, without Landlord’s 

 

 19 

 consent provided that a copy of the assignment, sublease or corporate merger or reorganization instrument is delivered to
Landlord within thirty (30) days after consummation of the transaction. 
  

	12.	ALTERATIONS—PERSONAL PROPERTY: 

  
 (a) Tenant shall not make any structural alterations, additions, improvements or other changes in or to the Premises or the Building, or attach, affix or
build therein any improvement or installation without Landlord’s prior written consent in each and every instance which shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, provided Tenant notifies Landlord
prior thereto, Tenant may make non-structural alterations costing up to Twenty-Five Thousand Dollars ($25,000.00) without the consent of Landlord. Landlord’s approval of any plans, specifications or drawings for Tenant’s alterations shall,
however, create no responsibility or liability on the part of Landlord for their completeness, design sufficiency or compliance the requirements of governmental agencies or authorities. 
  
 Before any work which requires Landlord’s consent is done or any materials therefor are delivered on
the Premises or into the Building, Tenant shall provide Landlord with plans, specifications, names of contractors, copies of contracts and necessary permits; shall indemnify and hold harmless Landlord against liens, costs, damages and expenses of
all kinds; and shall submit to Landlord’s reasonable supervision of said work; provided, however, Landlord shall not be entitled to a supervision fee in connection with such supervision. Any installation of special equipment including
intermittent operating equipment must have the prior approval of Landlord and they may be subject to special charges and regulations. Any new or additional electrical facilities required to service equipment installed by Tenant and all changes in
existing electrical facilities in or servicing the Premises required by Tenant (if permitted) shall be installed, furnished or made by Landlord at Tenant’s expense. Tenant may not install, or arrange to have installed, any air conditioning
equipment without receiving Landlord’s prior written approval; and any such equipment installed without said approval, it shall, if required by Landlord, be removed at Tenant’s sole expense; 
  
 (b) Any alterations or improvements made by Tenant or its contractors shall
be performed in such a manner so as to avoid any labor dispute which causes or is likely to cause stoppage or impairment of work or delivery services or any other services in the Building. In the event there shall be any such stoppage or impairment
as a result of any such labor dispute or potential labor dispute, Tenant shall immediately undertake such action as may be necessary to eliminate such dispute or potential dispute, including, but not limited to (i) removing all disputants from the
job site until such time as the labor dispute no longer exists, (ii) seeking an injunction in the event of a breach of contract between Tenant and Tenant’s contractor, and (iii) filing appropriate unfair labor practice charges in the event of a
union jurisdictional dispute. 
  
 (c) With respect to any
mechanic’s liens filed against either Tenant’s leasehold estate in the Premises or Landlord’s fee simple title interest in the Building as a result of work performed at the request or on behalf of Tenant, Tenant shall indemnify and
save harmless the Landlord against all loss, liability, costs, attorney’s fees, damages or interest charges as a result of any such lien. Tenant shall, within thirty (30) days of the filing of any such lien and written notice given 

 

 20 

 to Tenant, remove, pay of cancel said lien or secure the payment of any such lien or liens by bond or other security
acceptable to Landlord. 
  
 (d) Tenant shall have the right at all
times and at its own expense to contest and defend on behalf of the Tenant or Landlord any action involving the collection, validity or removal of such lien or liens, upon giving adequate security to the Landlord for payment of such lien.

  
 (e) Landlord or its affiliated entity is a party to a local
union trade agreement which requires that Tenant and common area construction and/or leasehold improvements be performed by union trades unless the union trade bid is, in the exercise of Tenant’s reasonable business judgment, not economically
feasible. Tenant shall perform or cause Tenant’s contractor to perform all work in the making and/or installation of any repairs, alterations or improvements in a manner so as to avoid any labor dispute which causes or is likely to cause
stoppage or impairment of work or delivery services or any other services in the Building. In the event there shall be any such stoppage or impairment as the result of any such labor dispute or potential labor dispute, Tenant shall immediately
undertake such action as may be necessary to eliminate such dispute or potential dispute. 
  

	13.	LANDLORD’S REPAIR OBLIGATION: 

  
 Landlord agrees to maintain and repair the public portions of the Building in accordance with the standards of a downtown first-class non-institutional
office building. Landlord agrees to maintain, repair or replace, as necessary, at its sole cost and expense, all structural portions of the Building, including the Premises and all mechanical, HVAC, electrical and plumbing systems within the
Premises and elsewhere which serve the Premises (or the disrepair or malfunction of which could damage or disrupt use of the Premises) or which serve the common area of the Building including all windows and window coverings accessible from the
Premises. Landlord also agrees to make any and all repairs to the Premises (except as hereinafter provided) and to repair and/or restore, at its sole cost and expense, any and all damage to the Premises (except as hereinafter provided) and to repair
and/or restore, at its sole cost and expense, any and all damage to the Premises or to Tenant’s furniture, fixtures or equipment which may be caused by the act or neglect of Landlord, or its contractors or employees. All repairs required to be
made as a result of Tenant’s misuse or neglect of the Premises or of damage to, or defacement of, the Building or any part thereof, by reason of Tenant’s tenancy therein shall be made at Tenant’s expense. Notwithstanding anything
contained herein to the contrary, Landlord shall be responsible for complying with the requirements of the ADA that are applicable to the Premises at Landlord’s sole cost and expense. Without limiting the foregoing, and in addition to
Landlord’s TIA Work, prior to the Commencement Date, Landlord shall repair and cause the windows to be professionally cleaned (to the extent reasonably practicable given the fact that the windows are over seventy [70] years old), the exterior
windows in the Premises, including washing the windows inside and out and cleaning the metal frames and shall repair the wall damage and related damage in the areas to be specified by Tenant. 
  

	14.	INTENTIONALLY OMITTED. 

  

 21 

	15.	UNTENANTABILITY: 

  
 Unless all or substantially all of the Building is made unfit for occupancy by fire or other casualty, acts of God or other cause, if the Premises shall
be partially damaged by fire or other casualty, this Lease shall remain in full force and effect and the damage to the Premises shall be repaired by the Landlord, and the rent until such repairs shall be made shall be abated on a per diem basis
proportionate to the extent and for the period that the Premises are unfit for occupancy. Landlord shall incur no liability on account of any delay in the completion of such repairs which may arise by reason of adjustment of insurance, labor
difficulties or any other cause beyond Landlord’s control. If all or substantially all of the Premises or the Building are made unfit for occupancy by fire or other casualty, acts of God or other cause, Landlord shall repair, restore or
rehabilitate the Premises or the Building at Landlord’s expense. In such event, rent shall be abated on a per diem basis proportionate to the extent and for the period that the Premises are unfit for occupancy, provided that if such repairs are
not restored or repaired within two hundred ten (210) days after commencement of such restoration or repair, as mutually agreed by Landlord and Tenant, then: (a) Tenant shall have the right to terminate this Lease, as of the date when the Premises
were rendered untenantable, by notice to Landlord not later than sixty (60) days from the date Landlord and Tenant acknowledge that the Premises are incapable of being repaired or restored within the aforesaid two hundred ten (210) day period. If,
during the final two (2) years of the Term (as may be extended), all or substantially all of the Premises or the Building are made unfit for occupancy by fire or other casualty, acts of God or other cause, Landlord may elect to terminate this Lease
as of the date when the Premises or the Building are so made unfit for occupancy, by written notice to Tenant within ninety (90) days after that date unless, within thirty (30) days following receipt of Landlord’s notice to terminate, Tenant
exercises an Option to Renew. Any termination of this Lease pursuant to this Section 15 shall be effective as of the date when the Premises were rendered untenantable. In the event neither Landlord or Tenant elect to terminate this Lease, Landlord
shall proceed to diligently repair, restore or rehabilitate the Premises, as improved and supplemented, at Landlord’s expense, as soon as reasonably possible after Landlord is able to take possession of the damaged Premises and undertake
reconstruction or repairs. In the event of termination of this Lease pursuant to this Section 15, Annual Base Rent shall be apportioned on a per diem basis up to the effective date of such termination. 
  

	16.	DEFAULT BY TENANT: 

  
 All rights and remedies of Landlord herein set forth are in addition to any and all rights and remedies allowed by law and equity. 
  
 (a) If any voluntary or involuntary petition or similar pleading under any
Act of Congress relating to bankruptcy shall be filed by or against Tenant, or if any voluntary or involuntary proceedings in any court or tribunal shall be instituted by or against Tenant to declare Tenant insolvent or unable to pay Tenant’s
debts, then and in any such event Landlord may avail itself of all rights and remedies afforded or available to it under the Bankruptcy Reform Act of 1978 and any subsequent amendments thereto. 
  

 22 

 (b) If Tenant shall fail to pay the Annual Base Rent and Additional Charges reserved herein when due, or
within ten (10) days after notice from Landlord that said Annual Base Rent and/or Additional Charges has not been paid, or defaults in the prompt and full performance of any of Tenant’s covenants and agreements hereunder and said default is not
corrected within thirty (30) days after notice from Landlord of said default; provided, however, that if the term, condition, covenant or obligation to be performed by Tenant is of such nature that the same cannot reasonably be performed within such
thirty (30) day period, such matter shall not constitute a default so long as Tenant commences to cure such default within said thirty (30) day period and thereafter diligently and continuously undertakes to complete the same, or if the leasehold
interest of Tenant be levied upon and Tenant shall not have the lien removed within thirty (30) days after notice from Landlord of said lien or levy under execution or be attached, or if Tenant makes an assignment for the benefit of creditors or if
a receiver be appointed for any property of Tenant, or if Tenant abandons the Premises, then and in any such event Landlord may, if Landlord so elects, and with or without notice of such election and with or without further demand whatsoever,
forthwith terminate this Lease and Tenant’s right or possession of the Premises, or Landlord may, without terminating this Lease, terminate Tenant’s right to possession of the Premises. 
  
 (c) Upon the termination of this Lease, or upon the termination of
Tenant’s right to possession without termination of the Lease, Tenant shall surrender possession and vacate the Premises immediately, and Landlord may enter into and repossess the Premises with or without process of law and remove all persons
and property therefrom in the same manner and with the same rights as if this Lease had not been made, and for the purpose of such entry and repossession, Tenant waives any notice provided by law or otherwise to be given in connection therewith.

  
 (d) If Landlord elects to terminate Tenant’s right to
possession only, without terminating the Lease as above provided, Landlord may remove from the Premises any and all property found therein and such repossession shall not release Tenant from Tenant’s obligation to pay the rent reserved herein.
After any such repossession by Landlord without termination of the Lease, Landlord shall make reasonable efforts to relet the Premises, or any part thereof, as agent of Tenant to any person, firm or corporation and for such time and upon such terms
as Landlord, in Landlord’s sole discretion, may determine. Landlord may make repairs, alterations and additions in and to the Premises and redecorate the same to the extent reasonably deemed by Landlord necessary, and Tenant shall, upon demand,
pay the reasonable cost thereof together with Landlord’s expenses (including any broker’s commission) of reletting. If the rents and Additional Charges collected by Landlord upon any such reletting are not sufficient to pay monthly the
full amount of the rent and Additional Charges reserved herein together with the costs of such repairs, alterations, additions, redecorating and expenses, Tenant shall pay to Landlord the amount of each monthly deficiency upon demand. 
  
 (e) Any and all property which may be removed from the Premises by Landlord
may be handled, removed, stored or otherwise disposed of by Landlord at the risk and expense of Tenant, and Landlord shall in no event be responsible for the preservation of safekeeping thereof. Tenant shall pay to Landlord, upon demand, any and all
expenses incurred in such removal and 
  

 23 

 all storage charges against the said property so long as the same shall be in Landlord’s possession or under
Landlord’s control. If any property shall remain in the Premises or in the possession of Landlord and shall not be removed by Tenant within a period of seven (7) days from and after the time when the Premises are either abandoned by Tenant or
repossessed by Landlord under the terms of this Lease, said property shall conclusively be deemed to have been forever abandoned by Tenant. 
  
 (f) If Tenant shall default in performing any term, covenant or condition of this Lease on the part of Tenant to be performed by Tenant, which default may
be cured by the expenditure of money, Landlord at Landlord’s option may, but shall not be obligated to, on behalf of Tenant, expend such sum as may be necessary to perform and fulfill such term, covenant or condition, and any and all sums so
expended by Landlord, with interest thereon at the rate of two percent (2%) per month from the date of such expenditure, shall be deemed to be Additional Charges, in addition to the Annual Base Rent, and shall be repaid by Tenant to Landlord on
demand but no such payment or expenditure by Landlord shall be deemed a waiver of Tenant’s default nor shall it affect any other remedy of Landlord by reason of such default. 
  

	17.	SUBORDINATION OF LEASE: 

  
 Provided Tenant has received a fully executed recordable subordination, nondisturbance and attornment agreement (a “Nondisturbance Agreement”)
in form reasonably satisfactory to Tenant in each instance, which agreement must provide that, (a) if there shall be a foreclosure of a superior mortgage, such mortgagee will not make Tenant a party defendant to such foreclosure, evict Tenant,
disturb Tenant’s possession under this Lease, or terminate or disturb Tenant’s leasehold estate or rights hereunder, and will recognize Tenant as the direct tenant of such mortgagee on the same terms and conditions as are contained in this
Lease (subject to the provisions hereinafter set forth), provided no default beyond the expiration of applicable notice and cure periods shall have occurred and be continuing hereunder, and (b) if a superior lease shall terminate or be terminated
for any reason, such lessor will not make Tenant a party in any action to terminate such superior lease or to remove or evict Tenant from the Demised Premises, nor disturb Tenant’s possession under this Lease, or terminate or disturb
Tenant’s leasehold estate or rights hereunder, and will recognize Tenant as the direct tenant of such lessor on the same terms and conditions as are contained in this Lease (subject to the provisions hereinafter set forth), provided no default
beyond the expiration of applicable notice and cure periods shall have occurred and be continuing, then, this Lease shall be subject and subordinate to the lien of any mortgage or mortgages, deed or deeds of trust and ground lease or leases
which may now or hereafter affect the Building or the land of which the Premises are a part or both, and to all renewals, extensions, replacements, amendments or modifications of any such mortgages, deeds of trust or ground leases. Tenant
acknowledges that in the event of the enforcement by Landlord’s mortgagee of the remedies provided by law or its mortgage, any person succeeding to Landlord’s position hereunder as a result of such enforcement shall not be bound by any
payment of Annual Base Rent or Additional Charges for more than one (1) month in advance of its due date. Without limiting the foregoing, if any mortgage has been granted by Landlord prior to the date of this Lease and remains in effect, Landlord
shall provide a Nondisturbance Agreement in 
  

 24 

 the form attached hereto and made a part hereof as Exhibit “SNDA” from the mortgagee thereunder to Tenant
contemporaneously with this Lease. 
  

	18.	NOTICES: 

  
 Except as provided in section 4(p), in every instance where it shall be necessary or desirable for Landlord or Tenant to serve any notice or demand upon
the other, such notice or demand shall be deemed sufficiently given or made if, in writing, if sent by personal delivery, by registered or certified mail (or by express mail, if available), return receipt requested, or by courier guaranteeing next
business day delivery and furnishing a receipt in evidence thereof, and the time of giving or making such notice or demand shall be deemed to be the time when the same is received or rejected. Notices shall be delivered to the following addresses:

  

			
	Tenant:	  	Education Loan Servicing Corporation
	 	  	MK Ferguson Plaza
	 	  	1500 West Third Street, Suite 125
	 	  	Cleveland, Ohio 44113
	 	  	Attention: Chief Executive Officer
	 	  	 
	 	  	And
	 	  	 
	 	  	Education Loan Servicing Corporation
	 	  	12760 High Bluff Drive, Suite 210
	 	  	San Diego, California 92130
	 	  	Attention: General Counsel
	 	  	 
	Landlord:	  	Post Office Plaza Limited Partnership
	 	  	Terminal Tower
	 	  	50 Public Square, Suite 1100
	 	  	Cleveland, Ohio 44113-2267
	 	  	Attention: General Counsel

  

	19.	ACCESS TO BUILDING: 

  
 Tenant, for Tenant and for Tenant’s agents, employees, licensees and invitees, agrees that all such persons desiring to enter or leave the Building
at other than normal business hours, shall use such entrances or exits as may be designated by Landlord, and shall comply with Building security regulations established from time to time (provided any such changes shall not materially and adversely
affect Tenant’s access to the Premises) by Landlord with respect to identification, registration, method of signaling for admission, etc., so as to establish the right of such persons to enter or to leave the Building. Notwithstanding the
foregoing, Tenant shall have access to the Premises twenty-four (24) hours per day, seven (7) days per week by virtue of magnetic card access system.  
  

 25 

	20.	COMMON AREAS: 

  
 Tenant and Tenant’s agents, employees, licensees, and invitees shall have the right to use, in common with Landlord and Landlord’s tenants and
the agents, employees, licensees and invitees of each, the public sidewalks, entrances, lobbies, vestibules, stairways, corridors, passenger and freight elevators, public toilets and other public areas of the Building and the Tower City Related
Buildings, subject, however, to applicable Building rules, regulations and security measures. Tenant and Tenant’s agents, employees, licensees and invitees shall not obstruct or litter, or use for storage (temporary or otherwise) or for the
display of merchandise or services or for any purpose other than the intended and normal purpose, any of said public sidewalks, entrances, lobbies, vestibules, stairways, corridors, passenger and freight elevators, public toilets and other public
areas of said Building; and no floor mats or runners shall be placed by Tenant in any Building corridor, lobby or vestibule. 
  

	21.	INTENTIONALLY OMITTED. 

  

	22.	EMINENT DOMAIN: 

  
 Tenant agrees with Landlord that if the whole or a substantial part of the Premises shall be appropriated, condemned, taken or otherwise acquired by any
public or quasi-public authority under the power of eminent domain, condemnation or other proceedings so as to render the Premises untenantable, this Lease and the estate hereby created shall terminate and wholly expire on the date title shall vest
in the acquiring authority, and all rent and Additional Charges shall be prorated and adjusted as of said date. In no event whatsoever shall Tenant have any claim against Landlord by reason of any appropriation, condemnation or taking the whole or
any part of the Premises or of said Building, nor shall Tenant have any claim to the amount, or any portion thereof, that may be awarded as damages or paid as a result of such appropriation and taking. Tenant hereby assigns to Landlord all of
Tenant’s right, title and interest in and to any and all amounts awarded or paid by reason of such appropriation, condemnation and taking, provided however, that none of the foregoing is meant to deprive the Tenant from claiming moving
expenses, displacement expenses or the like solely from the acquiring authority. If a part of the Premises shall be taken or conveyed but the Premises remains tenantable and adequate for Tenant’s use, in Tenant’s reasonable opinion, then
this Lease shall be terminated as to the part taken or conveyed as of the date Tenant surrenders possession; Landlord shall make such repairs, alterations, and improvements as may be necessary to render the part not taken or conveyed tenantable; and
the rent shall be reduced in proportion to the part of the Premises so taken or conveyed. Notwithstanding the foregoing, Tenant shall have the right to recover from such authority, but not from Landlord, (a) the future value of Tenant’s
leasehold estate, (b) such compensation as may be awarded to Tenant on account of moving and relocation expenses and (c) such other compensation to which Tenant may be entitled under law provided that any such compensation awarded to Tenant does not
and shall not reduce any compensation or award to Landlord. 
  
  

 26 

	23.	NO WAIVER: 

  
 (a) No receipt of money by Landlord from Tenant with knowledge of the breach of any covenants of this Lease, or after the termination hereof, or after the
service of any notice, or after the commencement of any suit, or after final judgment for possession of the Premises shall be deemed a waiver of such breach, nor shall it reinstate, continue or extend the term of this Lease or affect any such
notice, demand or suit. 
  
 (b) No delay on the part of either
Landlord or Tenant in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege preclude any other, or further, exercise thereof or the exercise of
any other right, power or privilege. 
  
 (c) No act done or thing
said by either Landlord or Tenant Landlord or their respective agents or employees shall constitute a cancellation, termination or modification of this Lease, or a waiver of any covenant, agreement or condition hereof, nor relieve the other from
their respective obligations hereunder. Any waiver or release and any cancellation, termination, or modification of this Lease by either Landlord or Tenant must be in writing signed by the party to be charged. 
  

	24.	ESTOPPEL CERTIFICATES: 

  
 Each of Landlord and Tenant agree at any time, upon not less than ten (10) days prior written request by the other, to execute, acknowledge and deliver to
Landlord a written statement certifying that this Lease is unmodified and in full force and effect (or, if there has been modifications, that the same is in full force as modified and stating the modifications), the dates to which the Annual Base
Rent and Additional Charges have been paid in pursuance to this Lease and such other certification concerning the Lease as may be reasonably required by Landlord, Landlord’s mortgagee or Tenant. Each further agrees that said statement may be
relied upon by any prospective purchaser of the fee or mortgage, assignee of any mortgage on the fee of the Premises or potential sublessee or assignee, provided the only effect of such statement shall be to preclude the declarant from asserting any
fact or position contrary to that set forth in such statement. 
  

	25.	INTENTIONALLY OMITTED. 

  

	26.	RULES AND REGULATIONS: 

  
 Tenant and Tenant’s agents, employees and invitees shall faithfully observe, and strictly comply with the Rules and Regulations appearing at the end
of this Lease and made a part hereof as Exhibit “D”, and with such further reasonable Rules and Regulations as Landlord may, after notice to Tenant, from time to time adopt; provided the same are not in conflict with this Lease. Nothing in
this Lease contained shall be construed to impose upon Landlord any duty or obligation to enforce the Rules and Regulations in any other lease as against any other tenant, and Landlord shall not be liable to Tenant for violation of the same by any
other tenant or the agents, 
  

 27 

 employees, licensees or invitees of such other tenant. Notwithstanding anything contained in this Lease to the contrary,
Tenant shall only be obligated to comply with the rules and regulations of Landlord to the extent that they do not discriminate against, and are not applied so as to discriminate against Tenant, do not materially increase the costs of Tenant to
operate at the Premises, do not materially interfere with the operations at the Premises, and do not conflict with any of the provisions of this Lease. 
  

	27.	BROKER: 

  
 Landlord and Tenant acknowledge that Brandon Wiant Converse, Ltd. (“Tenant’s Acknowledged Broker”) and CB Richard Ellis
(“Landlord’s Acknowledged Broker”) may be entitled to a fee for broker’s services rendered in bringing together the parties to this Lease. Landlord shall be responsible for paying whatever fee is determined to be due and owing to
both Tenant’s Acknowledged Broker and Landlord’s Acknowledged Broker. Landlord and Tenant each represents and warrants that, other than Tenant’s and Landlord’s Acknowledged Brokers, no other broker negotiated or was instrumental
in negotiating or consummating this Lease and that no other real estate commission is payable in connection with this Lease. Landlord and Tenant each agrees to indemnify and hold the other harmless from and against payment of or liability for any
real estate commission and for all costs and expenses, including reasonable attorney’s fees, arising in connection with any defense or claim caused by the breach of the representations made in this paragraph. 
  

	28.	ENTIRE AGREEMENT: 

  
 This Lease contains the entire agreement between the parties hereto and shall not be modified in any manner except by an instrument in writing executed by
said parties or their respective successors in interest. If more than one person or entity or a combination thereof comprise “Tenant”, their liability hereunder shall be joint and several. 
  

	29.	RECORDING: 

  
 This Lease shall not be recorded, but either party may record a Lease Memorandum describing the property herein demised, the Term of this Lease and other
pertinent matters. The party requesting that the Lease Memorandum be recorded shall prepare and pay all costs of preparation and recording of the Lease Memorandum and the other party agrees to execute at any and all times such instruments as may be
required for such recording. 
  

	30.	PARAGRAPH HEADINGS: 

  
 The paragraph headings appearing in this Lease are inserted only as a matter of convenience and for reference purposes, and in no way define, limit or
describe the scope and intent of this Lease or any paragraph hereof nor in any way affect it. 
  

 28 

	31.	QUIET ENJOYMENT: 

  
 If Tenant shall: (i) pay the rent reserved, the Additional Charges stipulated herein and other amounts to be paid by Tenant to Landlord; and (ii) well and
faithfully keep, perform and observe all of the covenants, agreements and conditions herein stipulated to be kept, performed and observed by Tenant, Tenant shall at all times during the Term of this Lease have the peaceable and quiet enjoyment,
possession, occupancy and use of the Premises without hindrance of Landlord or any person lawfully claiming under Landlord, subject, however, to the terms of this Lease and any instrument provided for in Paragraph 17. 
  

	32.	GUARANTY: 

  
 Education Lending Group, Inc., a Delaware corporation, agrees to guarantee performance and payment of all of Tenant’s obligations under this Lease
pursuant to the Guaranty attached hereto and made a part hereof. 
  
 Paragraphs numbered 33 through 37 are annexed hereto in Rider “A” consisting of pages (i) through (iii). 
  
 The following Exhibits are either attached hereto or are included by reference. 
  

					
			
	Exhibit “A”	 	—	  	Premises Diagram—Attached
			
	Exhibit “B”	 	—	  	Architectural and MEP Demolition Permit Package dated February 23, 2004 and Structural Steel and Steel Stair Building Permit Package dated February 27, 2004, prepared by Creative Process
dated February 13, 2004—Not Attached
			
	Exhibit “B-1”	 	—	  	Landlord’s TIA Work—Attached
			
	Exhibit “CSF”	 	—	  	Description of Allocable Common Services and Facilities—Attached
			
	Exhibit “D”	 	—	  	Rules and Regulations—Attached
			
	Exhibit “F”	 	—	  	GLA Analysis—Attached
			
	Exhibit “G”	 	—	  	Construction Schedule—Attached
			
	Exhibit “SNDA”	 	—	  	Subordination, Non-Disturbance and Attornment Agreement—Attached
			
	Exhibit “TS”	 	—	  	Diagram of Temporary Space Area—Attached
			
	Exhibit “JS”	 	—	  	 Janitorial Services—Attached

			
	Exhibit “RSR”	 	—	  	 Diagram of Right of Second Refusal Space—Attached

  

 29 

 IN WITNESS WHEREOF, Tenant and Landlord have executed triplicate counterparts of this LEASE as of the
day, month and year first above shown. 
  

			
	 LANDLORD:
  
 POST OFFICE PLAZA LIMITED PARTNERSHIP,
 an Ohio limited
partnership

		
	By:	 	 Post Office Building Co.,
 General
Partner

		
	 By:
	 	 /s/    Duane F. Bishop, Jr.

	 	 	

	 	 	 Duane F. Bishop, Jr., Vice President

	 	 	 
	  
 TENANT:
  
 EDUCATION LOAN SERVICING CORPORATION,
 a Delaware corporation
  

	By:	 	 /s/    Douglas L. Feist

	 	 	

	 	 	 Douglas L. Feist
 Executive Vice President and Secretary

  

 30 

 STATE OF
OHIO                        ) 
                             ) SS: 
 COUNTY OF CUYAHOGA       ) 
  
 BEFORE ME, the undersigned Notary Public in and for said County and State, personally appeared the above named POST OFFICE
PLAZA LIMITED PARTNERSHIP, an Ohio limited partnership, by Post Office Building Co., General Partner, by Duane F. Bishop, Jr., its Vice President, who acknowledged that he did sign the foregoing instrument and that the same is his free act and deed
personally and the free act and deed of said corporation. 
  
 IN
TESTIMONY WHEREOF, I have hereunto set my hand and official seal at Cleveland, Ohio, this 16th day of
March, 2004. 
  

	
	
	/s/    Nancy K. Fabriziana
	

	 Notary Public

  

 31 

 STATE OF CALIFORNIA  ) 
                     ) SS: 

COUNTY OF SAN DIEGO ) 
  
 BEFORE ME, the undersigned Notary Public, in and for said County and State, personally appeared the above named EDUCATION LOAN SERVICING CORPORATION, a
Delaware corporation, by Douglas L. Feist its Executive Vice President and Secretary, who acknowledged that he/she did sign the foregoing instrument and that the same is his/her free act and deed and the free act and deed of said corporation.

  
 IN TESTIMONY WHEREOF, I have hereunto set my hand and official
seal at San Diego, California, this 10th day of March, 2004. 
  

	
	
	/s/    Larana J. Fraser
	

	 Notary Public

  

 32 

 RIDER “A” 
  

	33.	ANNUAL BASE RENT:  

  

	(a)	Rate: 

  

							
	 Months

	 	 Annual Base Rent

	 	 Monthly Base Rent

	 	 Rate Per Square
 Foot of Rentable
 Area of Space

				
	Commencement Date to date First-Take Down Space is occupied (as provided in Section 35 below, “First Take-Down Date” or “FTDD”)	 	$250,976.00	 	$20,914.67	 	16,192 rsf @ $15.50
				
	FTDD—date Second Take-Down Space is occupied (as provided in Section 35 below, “Second Take-Down Date” or “STDD”)	 	$311,581.00	 	$25,965.08	 	20,102 rsf @ $15.50
				
	 STDD-60
	 	$371,767.50	 	$30,980.63	 	23,985 rsf @ $15.50
				
	 61-120
	 	$395,752.50	 	$32,979.38	 	23,985 rsf @ $16.50

  

	(b)	Rent Adjustment: 

  
 Final Space Re-Measurement. If a field-verification or CAD measurement of the Premises following substantial completion of Landlord’s Work
should reveal a different usable area than that set forth in Paragraph 1 hereof, which would, in turn, cause a corresponding change in the rentable area of the Premises then, in such event, the Annual Base Rent will be correspondingly increased or
decreased, as the case may be, subject to the reasonable prior approval of Tenant. Landlord shall cause to be delivered to Tenant concurrently with the Lease and at any time a re-measurement shall take place, a certificate from Landlord’s
architect certifying to the accuracy of the calculation of the square footage of the Premises. 
  

	34.	LEASEHOLD IMPROVEMENTS: 

  
 (a) Landlord agrees to cause to be performed, at Landlord’s sole cost and expense, the work more particularly described in Exhibit “B” and
based on mutually approved plans and 
  

 33 

 specifications dated (“Landlord’s Base Building Work”). In addition, Landlord agrees to cause to be
performed the work more particularly described in “Exhibit B-1” attached hereto and made a part hereof (“Landlord’s TIA Work”) subject to “Landlord’s Work Cost Threshold” as hereinafter described. Both
Landlord’s Base Building Work and Landlord’s TIA Work shall be performed by Landlord’s contractor in a lien-free, good and workmanlike manner. Though included in Landlord’s TIA Work and to be performed by Landlord’s
contractor, all costs approved by Tenant in advance and in writing related to data, cabling and security shall be borne by Tenant. Landlord and Tenant acknowledge and agree that Landlord’s TIA Work, as the same has been projected as of the date
of this Lease, is expected to cost (exclusive of architectural and engineering fees and the costs of demolition (including removal of the mezzanine), construction of the stairway and repair or replacement of windows and blinds, all of which shall be
borne solely by Landlord as part of Landlord’s Base Building Work and shall not be counted against Landlord’s Work Cost Threshold) no more than Eight Hundred Seventy-One Thousand Four Hundred and 00/100 Dollars ($871,400.00) ($40.00 per
square foot of Premises Usable Area) (“Landlord’s Work Cost Threshold”). Subject to Section 34(b), any Excess Costs over and above Landlord’s Work Cost Threshold shall be borne equally (50-50) by Landlord and Tenant. 

 
 (b) Notwithstanding the foregoing and to the extent Tenant has requested
enhancements to either Landlord’s Base Building Work or Landlord’s TIA Work following the date of this Lease, as such requests have been made in writing (“Enhancements”), Landlord shall initially bear the costs of such
Enhancements and the actual cost of such Enhancements shall be handled as follows: at Tenant’s option, up to Fifty-Four Thousand Four Hundred Sixty-Two and 50/100 Dollars ($54,462.50) ($2.50 per square foot of Premises Usable Area of 21,785
square feet), to the extent the same is actually incurred, may be added to Annual Base Rent at an interest rate of Ten Percent (10%) over the ten (10) year term of the Lease and the balance of such costs above the foregoing amount shall be paid by
Tenant to Landlord in cash within thirty (30) days of the date Landlord delivers its written invoice for such costs. 
  
 (c) Landlord hereby agrees to allow Tenant to inspect the Premises from time-to-time over the course of Landlord’s Work. 
  

	35.	MANDATORY TAKE-DOWN OF ADDITIONAL SPACE: 

  
 By no later than the beginning of the sixteenth (16th) month of the Lease term following the Commencement Date, Landlord shall deliver to Tenant and Tenant shall be obligated to take possession of and pay Annual Base Rent and Additional Charges with
respect to approximately 3,551 square feet of usable area and 3,910 square feet of rentable area as more particularly shown as “Phase II” on Exhibit “A” (“First Take-Down Space”). Whenever Tenant occupies the First
Take-Down Space, the Lease will be amended to reflect the inclusion of such space as of the date (the “First Take-Down Date” or “FTDD”) such space is occupied, the increase in Annual Base Rent and the proportionate increase in
Tenant’s Share. By no later than the beginning of the twenty-fifth (25th) month of the Lease term following the
Commencement Date, Landlord shall deliver to Tenant and Tenant shall be obligated to take possession of and pay Annual Base Rent and Additional Charges with respect to approximately 3,527 square feet of usable area and 3,883 square feet of rentable
area as more particularly shown as “Phase III” on Exhibit “A” (“Second 
  

 34 

 Take-Down Space”). Whenever Tenant occupies the Second Take-Down Space, the Lease will be amended to reflect the
inclusion of the space as of such date (the “Second Take-Down Date” or “STDD”), the increase in Annual Base Rent and the proportionate increase in Tenant’s Share. 
  

	36.	RIGHT OF SECOND REFUSAL TO LEASE ADDITIONAL SPACE: 

  
 Provided Tenant is not then in default of this Lease beyond all applicable notices and opportunities to cure the same, and, if during the term, as may be
extended (excluding the last two 2 years thereof), Landlord shall desire to lease then-available space in the Building which is proximate to the Premises as more particularly shown on Exhibit “RSR” attached hereto and made a part hereof
(“Subject Space”) and which has been first offered to but rejected by Chase Management, before offering the Subject Space for Lease to third-party prospective lessees, Landlord shall first offer the Subject Space to Tenant on the
same terms and conditions as those pursuant to which Landlord desires to lease the Subject Space. Within ten (10) business days following Tenant’s receipt of notice from Landlord of the availability of the Subject Space and the rental, rate and
other terms and conditions (“Landlord’s Notice”), Tenant must notify Landlord, in writing, of its election to lease such space on the terms set forth in Landlord’s Notice. If Tenant fails to accept such offer within the time
period herein specified, all rights hereunder to Tenant with respect to Landlord’s Notice shall be deemed waived; provided, however, that Tenant’s rights under this section 36 shall remain applicable to subsequent Landlord offers until
such time as the Subject Space is actually occupied. If Tenant shall accept such offer within the time period herein specified, Landlord shall promptly deliver to Tenant a proposed Lease Amendment setting forth the terms and conditions pursuant to
which the Subject Space will be added to the Premises. The parties agree to use diligent and good faith efforts to agree upon the other terms and conditions. If Tenant and Landlord fail to come to an agreement on the terms, all rights of Tenant
under this section with respect to such space shall be deemed to be null and void and of no further force and effect; provided, however, that Tenant’s rights under this section 36 shall remain applicable to subsequent Landlord offers until such
time as the Subject Space is actually occupied. In the event that Tenant does not exercise the foregoing rights within the required time period, all and any such rights shall be deemed to be null and void and of no further force and effect upon
expiration of the applicable time period; provided, however, that Tenant’s rights under this section 36 shall remain applicable to subsequent Landlord offers until such time as the Subject Space is actually occupied. In the event the Subject
Space is not added to the Premises, but rather, leased to a third-party tenant, it may be necessary for Landlord to construct a corridor across a portion of the Premises (as more particularly illustrated on attached Exhibit “RSR”) to gain
access to the Subject Space. If this should be necessary, Landlord shall, at it sole cost and expense, be responsible for the design and construction of a temporary barricade and a new demising wall (subject to all applicable laws and building
codes) to separate the Premises from such new corridor and all reasonable costs of Tenant incurred as a result of Landlord’s work (including, without limitation, costs which may need to be incurred to relocate Tenant’s cubicles and the
wiring associated with each), which costs shall be reimbursed by Landlord within fifteen (15) days following receipt of Tenant’s written demand therefor. Tenant shall remove all items from the area in question to accommodate Landlord’s
work. In such event, the new demising wall shall be constructed in such a manner as to provide natural light through nine foot (9’) wide glass insets approximately 
  

 35 

 six feet (6’) high, between each of the five (5) columns comprising the new demising wall separating the Premises
from the new corridor. Further, Landlord and Tenant shall amend this Lease to reflect the reduction in rentable square feet as of the date that is five (5) business days prior to the date upon which Landlord commences its construction of such new
demising wall. Landlord shall perform Landlord’s construction in a good and workmanlike manner and other than as specifically provided by this paragraph, shall not materially and adversely affect (i) the Premises, (ii) access to or from the
Premises to the Common Areas of the Building, or (iii) Tenant’s operation of its business (such that Landlord shall be required to perform such construction work during such times as Tenant is not operating its business (Landlord hereby
acknowledges that Tenant’s anticipated hours of operation will be Monday to Saturday, 8:00 a.m. to 9:00 p.m., inclusive) and that Landlord shall take all steps necessary to minimize noise, dust and other such effects of construction).

  

	37.	TEMPORARY SPACE; PRE-POSSESSION: 

  
 (a) During the performance of Landlord’s work, Tenant shall be entitled to occupy space on the northern side of the Building (“Temporary
Space”) as more particularly shown on Exhibit “TS” attached hereto and made a part hereof, at no cost to Tenant except utilities consumed while occupying the Temporary Space. The Temporary Space will be delivered to Tenant in
“as-is,” “where-is,” condition and Landlord shall not be obligated to perform any improvements to the Temporary Space. Tenant agrees to vacate the Temporary Space by no later than the Commencement Date of this Lease. 

 
 (b) Tenant, upon receipt of Landlord’s notice that the Premises is
Substantially Completed, shall have the right to enter into and occupy the Premises for no less than ten (10) business days for the purpose of installing personal property and equipment required for the operation of Tenant’s business. Tenant
shall have provided to Landlord all certificates of insurance required pursuant to this Lease. Such entry and occupancy by Tenant shall not be deemed to be the occupancy of the Premises for the conduct of its business. 
  

 36 

 GUARANTY 
  
 FOR VALUE RECEIVED and in consideration for and as an inducement to Landlord for entering into the Lease dated March 10,
2004, by and between POST OFFICE PLAZA LIMITED PARTNERSHIP, an Ohio limited partnership, hereinafter called “Landlord” and EDUCATION LOAN SERVICING CORPORATION, a Delaware corporation, hereinafter called “Tenant”, to which this
Guaranty is attached, the undersigned EDUCATION LENDING GROUP, INC., a Delaware corporation (“Guarantor”), jointly and severally hereby guarantees to Landlord, its successors and assigns, the full performance and observance of all the
covenants, conditions, and agreements therein provided to be performed and observed by Tenant, its successors and assigns, and expressly agree that the validity of this agreement and the obligations of Guarantor hereunder shall in no way be
terminated, affected, or impaired by reason of the assertion by Landlord against Tenant of any of the rights or remedies reserved to Landlord pursuant to the provisions of the within Lease, or by reason of the waiver by Landlord of, or the failure
of Landlord to enforce any of the terms, covenants, and conditions of said Lease, or the granting of any indulgence or extension of time to Tenant, all of which may be given or done without notice to Guarantor. Guarantor waives demand and notice of
default in the payment of rent, additional rent, or any other amounts contained or reserved in said Lease, or notice of a breach of non-performance of any of the covenants, conditions, or agreements contained in said Lease. Guarantor further
covenants and agrees that this agreement and Guaranty is absolute and unconditional and shall remain and continue in full force and effect as to any amendment, modification, renewal or extension of the within Lease, to all of which the undersigned
hereby consents in advance. 
  
 Guarantor further agrees that its
liability under this agreement and Guaranty shall be primary, and that in any right of action which shall accrue to Landlord under the within Lease, Landlord may, at its option, proceed against the undersigned without having given any demand or
notice or commenced any action, or having obtained any judgment against Tenant. 
  
 No assignment or any other transfer of Tenant’s interest in the within Lease shall operate to extinguish or diminish the liability of the undersigned under this agreement and Guaranty. No bankruptcy, insolvency,
or any other debtors relief proceedings shall operate to release or discharge this Guaranty or the obligations of Guarantor hereunder. 
  

 37 

 IN WITNESS WHEREOF, the undersigned has caused this agreement and Guaranty to be duly executed this
10th day of March, 2004. 
  

					
	 EDUCATION LENDING GROUP, INC.
 a Delaware
corporation
  

		
	By:	 	/s/    Robert deRose
	 	 	

	 	 	 Robert deRose
 Chief Executive
Officer

  
 STATE OF CALIFORNIA  ) 
                     ) SS: 
 COUNTY OF SAN DIEGO ) 
  
 BEFORE ME, the undersigned Notary Public in and for said County and State, personally appeared the above named EDUCATION LENDING GROUP, INC. by Robert deRose, its Chief Executive Officer, who acknowledged that he did sign the foregoing
instrument and that the same is his free act and deed and the free act deed of said corporation. 
  
 IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal at San Diego, California this 10th day of March, 2004. 
  

	
	
	/s/    Larana J. Fraser
	

	Notary Public

  

 38Tripartite Cooperation Agreement

 Exhibit 10.1 
  
 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 (*****). 
  

  
 TRIPARTITE COOPERATION AGREEMENT 
  
 By and Between 
  
 NOVARTIS PHARMA
AG 
  
 GENENTECH, INC. 
  
 AND 
  
 TANOX, INC. 
  
 Dated as of February 25, 2004 
  

  

 TABLE OF CONTENTS 
  

					
	 ARTICLE 1 DEFINITIONS
	  	2
		
	 ARTICLE 2 PURPOSE AND EFFECT OF THIS AGREEMENT
	  	15
			
	 2.1
	  	 Outline of Terms and Settlement
	  	15
	 2.2
	  	 Ancillary D&L Agreement, JCA and Cross-License Agreement
	  	16
	 2.3
	  	 *****
	  	16
	 2.4
	  	 No Rights Under Other Agreements
	  	16
	 2.5
	  	 *****
	  	16
	 2.6
	  	 Costs
	  	16
		
	 ARTICLE 3 SETTLEMENT
	  	17
			
	 3.1
	  	 Releases and Dismissal of Existing Claims
	  	17
	 3.2
	  	 Costs
	  	17
	 3.3
	  	 Confidentiality Orders
	  	17
		
	 ARTICLE 4 COOPERATION
	  	17
			
	 4.1
	  	 Integration of Programs and Cooperation Generally
	  	17
	 4.2
	  	 Scope of Cooperation
	  	18
	 4.3
	  	 Compliance With Legal Requirements
	  	19
	 4.4
	  	 Information Sharing
	  	19
	 4.5
	  	 *****
	  	19
		
	 ARTICLE 5 GOVERNANCE
	  	19
			
	 5.1
	  	 Governance For Manufacture And For Europe and the US Generally
	  	19
	 5.2
	  	 Governance For East Asia and Rest of World
	  	20
	 5.3
	  	 The Joint Management Committee
	  	21
	 5.4
	  	 JMC Requirements For Unanimous Consent Between Novartis and Genentech
	  	23
	 5.5
	  	 The Joint Commercialization Committee
	  	24
	 5.6
	  	 Alliance Management Representatives
	  	28
	 5.7
	  	 JCC Sub-Committees
	  	28
	 5.8
	  	 Matters To Be Referred by USBT and EBT
	  	33
	 5.9
	  	 Change of Control *****
	  	33
	 5.10
	  	 Disclosure of Information
	  	33
	 5.11
	  	 Certain Limitations on Committees
	  	33
		
	 ARTICLE 6 LICENSES
	  	34
			
	 6.1
	  	 No Derogation or Expansion
	  	34
	 6.2
	  	 [Intentionally Left Blank]
	  	34
	 6.3
	  	 License from Genentech to Novartis and Tanox
	  	34
	 6.4
	  	 License from Novartis to Genentech and Tanox
	  	36
	 6.5
	  	 License from Tanox to Genentech and Novartis
	  	37

  

 i 

					
	 6.6
	  	 Use of Know-How
	  	39
	 6.7
	  	 Sublicenses
	  	40
	 6.8
	  	 Third Party Rights
	  	41
	 6.9
	  	 No Limitation on Licenses
	  	42
	 6.10
	  	 Additional Licenses to Tanox
	  	42
	 6.11
	  	 No Implied License
	  	42
		
	 ARTICLE 7 DEVELOPMENT
	  	42
			
	 7.1
	  	 Development of Anti-IgE Products Generally
	  	42
	 7.2
	  	 Development for Europe and the US
	  	43
	 7.3
	  	 Development for East Asia and ROW
	  	44
		
	 ARTICLE 8 REGULATORY ACTIVITIES
	  	44
			
	 8.1
	  	 Regulatory Development of Anti-IgE Products Generally
	  	44
	 8.2
	  	 Regulatory Development Activities in the US
	  	45
	 8.3
	  	 Regulatory Development Activities in Europe
	  	46
	 8.4
	  	 Regulatory Development Activities in East Asia and ROW
	  	47
	 8.5
	  	 Regulatory Development Information Sharing and Safety Management
	  	47
		
	 ARTICLE 9 COMMERCIALIZATION
	  	48
			
	 9.1
	  	 Commercialization in the United States
	  	48
	 9.2
	  	 Commercialization in Europe
	  	48
	 9.3
	  	 Commercially Reasonable Efforts
	  	49
	 9.4
	  	 Commercialization in East Asia and ROW
	  	49
	 9.5
	  	 *****
	  	49
		
	 ARTICLE 10 MANUFACTURING AND SUPPLY
	  	49
			
	 10.1
	  	 Manufacturing of Anti-IgE Antibodies and Anti-IgE Products
	  	49
	 10.2
	  	 Release of Tanox Rights and Obligations to Manufacture
	  	50
	 10.3
	  	 Manufacturing of Xolair
	  	50
	 10.4
	  	 Other Anti-IgE Products
	  	50
	 10.5
	  	 Commercially Reasonable Efforts
	  	51
	 10.6
	  	 Allocation of Anti-IgE Products Supply
	  	51
		
	 ARTICLE 11 PAYMENTS
	  	52
			
	 11.1
	  	 Sales of Anti-IgE Products in the US
	  	52
	 11.2
	  	 Sales of Anti-IgE Products in Europe
	  	52
	 11.3
	  	 Sales of Anti-IgE Products in East Asia and the Rest of World
	  	53
	 11.4
	  	 Milestone Payments
	  	53
	 11.5
	  	 Credit for Milestone Payments
	  	54
	 11.6
	  	 Development and Manufacturing Compensation Payments
	  	54
	 11.7
	  	 No Other Payments
	  	55
	 11.8
	  	 Reports
	  	55
	 11.9
	  	 Books
	  	55
	 11.10
	  	 Timing and Method of Payment; Currency
	  	55

  

 -ii- 

					
	 11.11
	  	 Reconciliation
	  	56
	 11.12
	  	 Audit Rights
	  	56
	 11.13
	  	 Invoices and Documentation
	  	57
	 11.14
	  	 Taxes
	  	58
	 11.15
	  	 Interest
	  	58
	 11.16
	  	 Retroactive Effect
	  	58
		
	 ARTICLE 12 DISPUTE RESOLUTION
	  	58
			
	 12.1
	  	 Resolution of Disputes
	  	58
	 12.2
	  	 Arbitration
	  	59
	 12.3
	  	 *****
	  	60
		
	 ARTICLE 13 INTELLECTUAL PROPERTY
	  	60
			
	 13.1
	  	 Trademarks
	  	60
	 13.2
	  	 Ownership of Intellectual Property
	  	61
	 13.3
	  	 Use of Jointly-Owned Intellectual Property Outside of Collaboration
	  	63
	 13.4
	  	 Licensing of Anti-IgE Specific Patents Outside of Collaboration
	  	63
	 13.5
	  	 Infringement of Intellectual Property
	  	63
	 13.6
	  	 Infringement of Third Party Patents
	  	66
		
	 ARTICLE 14 REPRESENTATIONS AND WARRANTIES
	  	66
			
	 14.1
	  	 Due Organization, Valid Existence and Due Authorization
	  	66
	 14.2
	  	 Approvals, Binding Obligations; No Violations; No Assignment of Claims
	  	67
	 14.3
	  	 Anti-IgE Patents, Know-How and Biological Materials
	  	67
	 14.4
	  	 No Inconsistent Rights
	  	67
	 14.5
	  	 Third Party Agreements
	  	67
	 14.6
	  	 Agreements Between Parties
	  	67
	 14.7
	  	 Third Party Claims
	  	68
	 14.8
	  	 Disclaimer
	  	69
		
	 ARTICLE 15 CONFIDENTIALITY
	  	69
			
	 15.1
	  	 Company Information
	  	69
	 15.2
	  	 Academic and Scientific Publications
	  	70
	 15.3
	  	 Injunctive Relief
	  	70
		
	 ARTICLE 16 LIMITATIONS ON LIABILITY
	  	70
		
	 ARTICLE 17 FORCE MAJEURE
	  	71
		
	 ARTICLE 18 TERM AND TERMINATION
	  	71
			
	 18.1
	  	 Term
	  	71
	 18.2
	  	 Termination Rights
	  	72
	 18.3
	  	 Termination At Will
	  	73
	 18.4
	  	 No Termination for Breach
	  	77

  

 -iii- 

					
	 18.5
	  	 Termination on Change of Control
	  	77
	 18.6
	  	 Effect of Termination; Survival
	  	80
		
	 ARTICLE 19 INDEMNIFICATION AND INSURANCE
	  	80
			
	 19.1
	  	 Indemnification by Tanox
	  	80
	 19.2
	  	 Indemnification by Genentech
	  	81
	 19.3
	  	 Indemnification by Novartis
	  	81
	 19.4
	  	 Indemnification Procedure
	  	82
	 19.5
	  	 Litigation Costs and Damages
	  	82
	 19.6
	  	 Insurance
	  	83
		
	 ARTICLE 20 MISCELLANEOUS
	  	83
			
	 20.1
	  	 Governing Law; Submission to Jurisdiction
	  	83
	 20.2
	  	 Notices
	  	83
	 20.3
	  	 No Third Party Beneficiary
	  	84
	 20.4
	  	 Integration and Conflict
	  	84
	 20.5
	  	 Amendments
	  	85
	 20.6
	  	 No Assignment and Binding Effect
	  	85
	 20.7
	  	 Headings
	  	85
	 20.8
	  	 Exhibits and Schedules Incorporated
	  	85
	 20.9
	  	 Severability
	  	85
	 20.10
	  	 No Waiver
	  	85
	 20.11
	  	 Counterparts
	  	86
	 20.12
	  	 Bankruptcy Acknowledgment
	  	86
	 20.13
	  	 Publicity
	  	86
	 20.14
	  	 No Partnership or Agency
	  	87
	 20.15
	  	 Further Assurances
	  	87

  
 SCHEDULES 
  
 Schedule A – Financial Appendix 
 Schedule B – Tanox Anti-IgE Patents and Applications 
 Schedule C
–Inter-Party Agreements 
 Schedule D – Transitional Arrangements 
  
 EXHIBITS 
  
 Exhibit A – Tanox Release 
 Exhibit B – Genentech Release

 Exhibit C – Novartis Release 
 Exhibit D – Joint
Motions/Requests for Dismissal 
 ***** 
  

 -iv- 

 TRIPARTITE COOPERATION AGREEMENT 
  
 THIS TRIPARTITE COOPERATION AGREEMENT (together with all exhibits and schedules 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”), Genentech, Inc., a Delaware corporation
(“Genentech”) and Tanox, Inc. (formerly known as Tanox Biosystems, Inc.), originally a Texas corporation and reincorporated as a Delaware corporation (“Tanox”). (Each of Novartis, Genentech 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, providing for cooperation in the research, development and commercialization of anti-IgE antibody-based treatments in humans for IgE-mediated diseases (the “Original D&L Agreement”); and

  
 WHEREAS, 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, Genentech and Tanox entered into a certain Settlement and Cross-License Agreement dated as of July 8, 1996 (the “Cross-License
Agreement”), under which Genentech and Tanox each granted the other a license under certain patents; 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, subsequent to the execution of the Outline of Terms and Cross-License Agreement, Genentech has succeeded Genentech International Limited with respect to all the rights and obligations relevant to Genentech
International Limited under the Outline of Terms and the Cross-License Agreement; and 
  

 1 

 WHEREAS, Genentech and Novartis entered into a certain Joint Commercialization Agreement dated as of
April 19, 2000 (the “Original JCA”), under which Genentech and Novartis agreed to collaborate on commercialization of certain anti-IgE products in Europe and the United States; and 
  
 WHEREAS, various disputes have arisen between the Parties 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 this Agreement
for the purpose of: (a) resolving certain of those disputes and terminating the lawsuits and arbitration proceedings with respect thereto; and (b) cooperating with each other with respect to the Manufacture, Development and Commercialization of
Anti-IgE Antibodies and Anti-IgE Products throughout the world on the terms and subject to the conditions set forth herein; and 
  
 WHEREAS, the Parties intend this Agreement, together with any Ancillary Agreements and the exhibits and attachments hereto and thereto, to represent all
tripartite aspects of the Detailed Agreement (as described in Section 2.1 below) envisaged by the Outline of Terms, and also intend for the JCA to remain in full force and effect and to represent all bipartite aspects (as between Novartis and
Genentech) of the Detailed Agreement envisaged by the Outline of Terms, in each case with respect to the Manufacture, Development and Commercialization of Anti-IgE Products; and 
  
 WHEREAS, the Parties enter into this Agreement for the purpose of cooperating with respect to the Manufacture, Development
and Commercialization of Anti-IgE Antibodies and Anti-IgE Products throughout the world on the terms and conditions set forth herein; and 
  
 WHEREAS, in connection with entering into this Agreement, Genentech and Novartis intend to modify the Original JCA, Tanox and Novartis intend to modify
the Original D&L Agreement (including by separating the subject matter thereof and of the Supplemental Agreement into two agreements, an Amended and Restated D&L Agreement and an Ancillary D&L Agreement), and Tanox and Genentech intend
to modify the Cross-License Agreement, all as of the Effective Date hereof; 
  
 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 
  
 Capitalized terms used in this Agreement shall have the meanings set forth
below: 
  
 “Abandon” shall mean to permit a claim
within a patent or patent application, patent application or patent to lapse or become abandoned without first having filed a substitute (e.g., a continuation, a continuation-in-part, or a divisional application or an alternate claim (including,
without limitation, pending claims) which covers substantially the same subject 

  

 -2- 

 
matter). Notwithstanding the above definition, failing to respond to a final office action in which a claim or claims are deemed not patentable shall not be
included in the scope of Abandoning. 
  
 “Acquired
Patents” shall have the meaning set forth in Section 13.2(f). 
  
 “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 direction of, the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise. ***** 
  
 “Alliance Manager” shall have the meaning set forth in
Section 5.5(c) herein. 
  
 “Allocable Manufacturing
Overhead” shall have the meaning set forth in the Financial Appendix. 
  
 “Amended and Restated D&L Agreement” shall mean the Amended and Restated Development and Licensing Agreement entered into by Tanox and Novartis as of the date hereof (a true and accurate copy of
which has been provided to Genentech on the Effective Date of this Agreement), which amends and restates the Original D&L Agreement and certain portions of the Supplemental Agreement, in each case relating to certain products other than Anti-IgE
Products, as such agreement may be amended from time to time as permitted under Section 2.5 hereof. 
  
 “Ancillary Agreements” shall mean the JCA, the Ancillary D&L Agreement, the Manufacturing and Supply Agreements, the MTA, and the
Hu-901 Extension Agreements entered into by some or all of the Parties hereto, and includes any exhibits and schedules to any of the foregoing. 
  
 “Ancillary D&L Agreement” shall mean the Ancillary Development and Licensing Agreement by and between Novartis and Tanox dated as of
the date hereof (a true and accurate copy of which has been provided to Genentech on the Effective Date of this Agreement), which amends and restates the Original D&L Agreement and certain portions of the Supplemental Agreement, in each case
relating to Anti-IgE Antibodies and Anti-IgE Products in East Asia and Rest of World, as such agreement may be amended from time to time as permitted under Section 2.5 hereof. 
  
 “Antibody” shall mean any immunoglobulin protein (excluding any immunoadhesins), and any fragment, less
than full-length antibody form (such as Fv, Fab, and F(ab’)2), single-chain antibody, or 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. 
  

 -3- 

 “Anti-IgE Antibody” *****. 
  
 “Anti-IgE Patents” shall mean any and all patent applications and patents (including inventor’s
certificates) throughout the world, including any substitutions, extensions, supplementary patent certificates, reissues, re-examinations, renewals, divisions, continuations or continuations-in-part thereof or therefore which are now or hereafter
during the Term Controlled by any of Novartis, Genentech or Tanox and which, but for a license thereto, would be infringed by the making, using, importing, selling, or offering for sale of an Anti-IgE Antibody or an Anti-IgE Product in accordance
with the terms and conditions of this Agreement and any Ancillary Agreement *****. Notwithstanding the foregoing, any patent for which a license is required to avoid infringement with respect to any Manufacture, Development and Commercialization
activity with respect to any Anti-IgE Antibody or Anti-IgE Product shall be included in “Anti-IgE Patents” hereunder. 
  
 “Anti-IgE Product” shall mean any human pharmaceutical formulation containing or comprising an Anti-IgE Antibody alone or in combination
with other active or inactive ingredients, components or materials in the same formulation as the Anti-IgE Antibody. 
  
 “Anti-IgE Specific Claims” shall mean those claims (if any) of Anti-IgE Patents which are solely directed to: (a) a composition of matter
of Antibodies directed against IgE or products incorporating any such Antibody; (b) methods of administration of Antibodies directed against IgE; (c) methods of treatment of IgE mediated reactions using Antibodies directed against IgE; or (d)
methods of manufacturing Antibodies directed against IgE or products incorporating any such Antibody ***** 
  
 “Anti-IgE Specific Patents” shall mean any and all Anti-IgE Patents in which all claims are solely directed to: (a) a composition of
matter of Antibodies directed against IgE or products incorporating any such Antibody; (b) methods of administration of Antibodies directed against IgE; (c) methods of treatment of IgE mediated reactions using Antibodies directed against IgE; or (d)
methods of manufacturing Antibodies directed against IgE or products incorporating any such Antibody *****. 
  
 “Anti-IgE Trademarks” shall mean the trademarks, logos or indicia of origin displayed on or anticipated to be used in connection with any
Anti-IgE Product sold in any country, or used in connection with the Commercialization of any Anti-IgE Product in any country, which identify its source, ***** which shall also include such other trademarks as are selected after the Effective Date
in accordance with the JCA and/or the Ancillary D&L Agreement, and shall also include, in each case, related e-brands and domain names. 
  
 “Approval” shall mean any approval, registration, license or authorization from any Public Authority required for the Manufacture,
Development, Commercialization, storage or transport of an Anti-IgE Antibody or an Anti-IgE Product 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. 
  
 “Approval Application” shall mean the submission to the relevant Public Authority of an appropriate application seeking any approval, registration or authorization from 

  

 -4- 

 
any Public Authority required for the Manufacture, Development, Commercialization, storage or transport of an Anti-IgE Antibody or an Anti-IgE Product in any
Regulatory Jurisdiction, and shall include, without limitation, a marketing authorization application, supplementary application or variation (“MAA”) in Europe, an Investigational New Drug application (“IND”), a
biologics license application or supplementary application (“BLA”), a product license application (“PLA”) and an establishment license application (“ELA”) in the United States, and equivalent
applications for marketing authorization in other Regulatory Jurisdictions, but shall not include any application solely seeking Pricing Approval. 
  
 “Biological Materials” shall mean reagents and compounds used in assays transferred hereunder (as well as the assays themselves),
micro-organisms, cell lines, antibodies, cell culture media and similar materials, to the extent any of the foregoing are: (i) necessary for the Manufacture, use, Development, or Commercialization of an Anti-IgE Antibody or Anti-IgE Product in
accordance with the terms and conditions of this Agreement or, with respect to Collaboration Products, under the Ancillary D&L Agreement or otherwise voluntarily provided by Novartis, Genentech or Tanox hereunder; (ii) not generally commercially
available; and (iii) Controlled by any of Novartis, Genentech or Tanox. ***** 
  
 “Breaching Party” shall have the meaning set forth in Section 18.4. 
  
 “Bulk Product” shall mean all bulk forms of the active ingredient of any Anti-IgE Product. 
  
 “Business Day” shall mean any day other than a Saturday, a
Sunday or a day on which commercial banks located in New York, New York or in Basel, Switzerland shall be authorized or required by Legal Requirements to close. 
  

***** 
  
 “CDR” shall mean the “complementarity determining region” as defined in Kabat et al., Sequence of Proteins of Immunological
Interest, 5th Ed. Public Health Service, National Institutes of Health, Bethesda, MD (1991) together with the “hypervariable loop” as described in Chothia and Lesk, J. Mol. Biol 196:901-917 (1987). 
  
 ***** 
  
 “Clinical Requirements” shall mean such quantities of any Anti-IgE Product as are required by Novartis,
Genentech and/or Tanox for the conduct of preclinical and clinical studies in order to obtain Approval of that Anti-IgE Product with respect to a particular Regulatory Jurisdiction, quantities of any Anti-IgE Product which are required by Novartis,
Genentech or Tanox for submission to a Public Authority in accordance with this Agreement (or any Ancillary Agreement) in connection with any Approval Application or Approval in any Regulatory Jurisdiction and quantities of any Anti-IgE Product
which are required by Novartis, Genentech or Tanox for 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
Pricing Approval. 
  

 -5- 

 “Clinical Trial” shall mean a controlled study in humans of the safety or efficacy of an
Anti-IgE Product, and shall include, without limitation, any Phase I clinical trial, Phase II clinical trial or Phase III clinical trial, but shall not include any post-marketing clinical trial or Phase IV clinical trial unless such post-marketing
clinical trial or Phase IV clinical trial is designed to support expanded labeling or to satisfy requirements of a Public Authority in connection with any Approval (including, without limitation, any supplemental BLA, or equivalent) or Pricing
Approval. 
  
 “Code” shall have the meaning set
forth in Section 20.12 herein. 
  
 “Co-Exclusive”
shall mean a license or sublicense, as applicable, under which each co-exclusive licensee has the right to exclude all others, including the licensor, but shall not have the right to exclude any other co-exclusive licensee. 
  
 “Collaboration Product” shall mean any Anti-IgE Product
including as an active ingredient E-25 or Hu-901 (or any other Anti-IgE Antibody identified and synthesized by Tanox or Novartis) or any other Anti-IgE Antibody Developed or Commercialized in the United States or Europe under this Agreement or the
Outline of Terms *****.  
  
 “Commercial
Requirements” shall mean such quantities of any Anti-IgE Product as are required by Novartis, Genentech and/or Tanox to fulfill their requirements for Commercialization with respect to a particular Regulatory Jurisdiction (including,
without limitation, samples). 
  
 “Commercialization
Costs” shall have the meaning set forth in the Financial Appendix. 
  
 “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 Pricing Approval), or to the extent permitted under this Agreement or any Ancillary Agreement, to have any of those things done, and “Commercialization” shall have a corresponding meaning. 

 
 “Committee” means any committee, sub-committee or team
contemplated by Article 5 of this Agreement. 
  
 “Commercial Launch” of an Anti-IgE Product shall mean the first commercial sale of an Anti-IgE Product to a Third Party customer in a given country, after final marketing approval in such country (including any required
Pricing Approval, where applicable) has been obtained from the relevant Public Authority for such Anti-IgE Product for such sale. 
  
 “Commercially Reasonable Efforts” means, 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 Anti-IgE
Products *****. 
  

 -6- 

 “Company Information” shall mean this Agreement, the Ancillary Agreements and the
Related Agreements, and the information or materials disclosed by any of Novartis, Genentech or Tanox (or their respective Affiliates) to any other Party (or any of its Affiliates) pursuant to this Agreement, the Outline of Terms or any Ancillary
Agreement, including, without limitation, by disclosure to any Committee, whether furnished before or after the Effective Date, and including, without limitation, any information or materials provided pursuant to Section 4.4, notices provided
hereunder, and any information disclosed in connection with financial disclosures or accounting audits. ***** 
  
 ***** 
  
 “Control” or “Controlled” means owned or in-licensed from a Third Party or an Affiliate of the applicable Party, in each
case with the ability to grant access to or a license or sublicense as provided for herein or any Ancillary Agreement without violating the terms of any agreement or other arrangement with any Third Party, as at the later of the Effective Date and
the date on which the applicable intellectual property rights, know how or materials were initially obtained, created or invented. 
  
 “Controlling Party” shall mean, with respect to any patent or patent application claiming any intellectual property developed jointly by
two or more Parties: (a) Genentech (or Novartis if Genentech is not a joint owner of the applicable patent or patent application), with respect to the United States only; (b) Novartis (or Genentech if Novartis is not a joint owner of the applicable
patent or patent application), with respect to Europe; (c) Novartis (or Tanox if Novartis is not a joint owner of the applicable patent or patent application) for East Asia and the Rest of World. 
  
 “Cost of Goods” shall have the meaning set forth in the
Financial Appendix. 
  
 “Cost of Sales” shall
have the meaning set forth in the Financial Appendix. 
  
 “Cross-License Agreement” shall mean the Settlement and Cross-License Agreement by and between Genentech and Tanox dated as of July 8, 1996, together with Amendment No. 1 dated as of the Effective Date (a true and accurate
copy of each of which has been provided to Novartis on the Effective Date of this Agreement), as such agreement may be further amended from time to time as permitted under Section 2.5 hereof. 
  
 “D&L Agreements” shall mean collectively the Ancillary
D&L Agreement and the Amended and Restated D&L Agreement. 
  
 “Damages” shall mean all liabilities, damages, losses, settlements, penalties, fines, costs and expenses, including, without limitation, reasonable attorneys’ fees, of whatever kind or nature, in each case incurred by
a Novartis Indemnitee, Genentech Indemnitee or Tanox Indemnitee, as the case may be, and paid to a Third Party, before and without giving effect to any insurance proceeds. 
  
 “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 

  

 -7- 

 
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 “Europe/US Development Plan” and for purposes of operation
of the Committees with respect to any Europe/US Development Plan (except as otherwise expressly set forth in Article 5). 
  
 “Development Costs” shall have the meaning set forth in the Financial Appendix. 
  
 “Dispute” shall mean any dispute, controversy or claim
between two or more of the Parties arising on or after the Effective Date out of or in connection with this Agreement or any Ancillary Agreement or Related Agreement, or the Parties’ activities hereunder or thereunder, but shall not include any
dispute, controversy or claim (a) not involving Novartis and arising solely out of or solely in connection with the Cross-License Agreement; (b) not involving Genentech and arising solely out of or solely in connection with the Amended and Restated
D&L Agreement; *****. 
  
 “E-25” shall mean
the Anti-IgE Antibody and/or Anti-IgE Product which is known by Genentech as of the Effective Date hereof ***** and modifications thereto resulting solely from changes in the Manufacturing process thereof. 
  
 ***** 
  
 “East Asia” shall mean the territories of Taiwan, Hong Kong, Singapore, China, South Korea and, to the
extent permitted by applicable Legal Requirements, North Korea. 
  
 “EBT” or “Europe Brand Team” shall have the meaning set forth in the JCA. 
  
 “Effective Date” shall have the meaning set forth in the introductory paragraph of this Agreement. 
  
 “Europe” shall mean collectively Austria, Belgium, Denmark,
Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, the United Kingdom, Switzerland, Poland, Hungary, the Czech Republic, Slovakia, Albania, Bosnia and Herzegovina, Bulgaria, Croatia,
Macedonia, Romania and Yugoslavia, and, in each case, their territories and possessions. 
  
 “Europe Brand Plan” shall mean a Plan covering Commercialization of Anti-IgE Products and Anti-IgE Antibodies in Europe in substantially the form of the US Brand Plan. 
  
 “Europe/US Brand Plan” shall mean the Europe/US Brand Plan
approved in accordance with Section 5.4(a) herein. 
  
 “Europe/US Development Plan” shall have the meaning set forth in Section 5.5(a)(iii) herein. 
  

 -8- 

 “Europe/US Development Sub-Committee” and “E/US DSC” shall mean the
Europe/US Development Sub-Committee described in Section 5.7(b) herein. 
  
 “Europe/US Strategic Plan” shall have the meaning set forth in Section 5.5(a)(ii) herein. 
  
 “Excluded Costs” shall have the meaning set forth in Section 1 of the Financial Appendix. 
  
 “Exclusive” shall mean a license or sublicense, as
applicable, under which the licensee has the right to exclude all others, including, without limitation, the licensor. 
  
 “Existing Broad License Agreement” shall mean a license agreement, existing as of the Effective Date, under which a Party obtains rights
which cover an Anti-IgE Antibody or an Anti-IgE Product but which rights also extend to products other than Anti-IgE Antibodies and Anti-IgE Products. 
  
 “Existing Claims” shall mean all claims, disputes, actions and proceedings between the Parties, or any of them (and any underlying debts,
liens, liabilities, costs, expenses or losses of any type arising therefrom), known or unknown, involving any claim, matter or event (a) arising or occurring prior to the Effective Date, and (b) concerning or relating to the Original D&L
Agreement, the Supplemental Agreement, the Ancillary Agreements in existence prior to the Effective Date (including the Original JCA as it existed prior to the Effective Date), the Related Agreements (including the Settlement and Cross License as it
existed prior to the Effective Date), the Outline of Terms, Anti-IgE Antibodies, Anti-IgE Products, any intellectual property rights therein or thereto or the Development, Manufacturing or Commercialization thereof, including, without limitation the
Legal Proceedings and any disputes which were raised, or could have been raised, in the Legal Proceedings, and any claims relating to (a) and (b) above communicated by any Party to any other Party prior to the Effective Date ***** 
  
 “FDA” shall mean the United States Food and Drug
Administration and any successor agency having substantially the same functions. 
  
 “Filled Product” shall mean all forms of any Anti-IgE Product which are filled but not packaged for sale. For the purposes of weight calculations, Filled Product equals the weight of Bulk Product
actually contained in the final dosage unit. 
  
 “Finished
Product” shall mean finished, final dosage units of any Anti-IgE Product packaged for sale or distribution as a sample, each in accordance with applicable Specifications, GMPs and other Legal Requirements for any applicable Regulatory
Jurisdiction. 
  
 “Finance Sub-Committee” or
“FSC” shall have the meaning set forth in Section 5.7(c) herein. 
  
 “Financial Appendix” shall mean the Financial Appendix attached as Schedule A hereto. 
  
 “Force Majeure Events” shall have the meaning set forth in Article 17 herein. 
  

 -9- 

 “Fully Burdened Manufacturing Cost” or “FBMC” shall have the meaning
set forth in the Financial Appendix. 
  
 “GAAP”
shall mean US Generally Accepted Accounting Principles from time to time, consistently applied. 
  
 “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. 
  
 “GMP” shall mean current Good Manufacturing Practices (or equivalent term) as such term is defined from time to time by the FDA or other relevant Public Authority having jurisdiction over the Manufacture or sale of Anti-IgE
Antibodies or Anti-IgE Products in any Regulatory Jurisdiction. 
  
 “Hu-901” shall mean the Anti-IgE Antibody and/or Anti-IgE Product which is known by the Parties as of the Effective Date as “Hu-901”, “TNX-901,” or ***** and used in the Phase II clinical trials entitled
“Hu-901.01. A Phase I/II, double blind, randomized, placebo-controlled, multiple dose study to assess the safety, tolerability, pharmacokinetics and pharmacodynamics of ascending subcutaneous doses of Hu-901 in subjects with a history of
immediate hypersensitivity reaction to peanut ingestion” (dated April 18, 2000), and modifications thereto resulting solely from changes in the Manufacturing process thereof. 
  
 “Hu-901 Extension Agreements” shall mean the letter agreement between the Parties dated as of July 1, 2003,
, as such agreement may be amended or superceded from time to time as permitted under Section 2.5 hereof. 
  
 “IAS” shall mean International Accounting Standards issued by the International Accounting Standards Committee from time to time,
consistently applied. 
  
 “Joint Commercialization
Agreement” and “JCA” shall mean the Joint Commercialization Agreement by and between Novartis and Genentech dated as of April 19, 2000, and the related US Commercialization Agreement by and between Novartis Pharmaceuticals
Corporation and Genentech dated as of April 19, 2000, which have been combined together, and amended and restated in the Amended and Restated Joint Commercialization Agreement as of the date hereof (a true and accurate copy of which has been
provided to Tanox on the Effective Date of this Agreement), as such agreement may be amended from time to time as permitted under Section 2.5 hereof. 
  
 “Joint Commercialization Committee” or “JCC” shall mean the Joint Commercialization Committee as described in Section
5.5 herein. 
  
 “Joint Management Committee” or
“JMC” shall mean the Joint Management Committee as described in Section 5.3 herein. 
  
 “JMC Chairperson” shall have the meaning set forth in Section 5.3(c) herein. 
  

 -10- 

 “Know-How” shall mean any and all proprietary information, know-how, data, test results,
knowledge, techniques, discoveries, inventions, specifications, designs, regulatory filings, and other information (whether or not patentable) which are now or hereafter during the Term in the Control of any of Novartis, Genentech or Tanox that are
necessary or material for the Development, Manufacture (subject to the exception below) or Commercialization of any Anti-IgE Antibody or Anti-IgE Product in accordance with this Agreement or any Ancillary Agreement (including any of the forgoing
provided under the Outline of Terms, the Original D&L Agreement or the Original JCA prior to the Effective Date); provided, however, “Know-How” shall exclude any issued patent within the Anti-IgE Patents *****.
 
  
 “Lead Litigating Party” shall
have the meaning set forth in Section 13.5(d). 
  
 “Legal
Proceedings” shall mean (a) the arbitration captioned Tanox, Inc. v. Genentech, Inc., et al, American Arbitration Association Case No. 74 Y 181 01113 99 LMF; (b) the arbitration captioned Tanox, Inc. v. Novartis
Pharma AG, American Arbitration Association Case No. 50 T 153 00119 99; and (c) the litigation captioned Genentech, Inc., et al. v. Tanox, Inc., Case No. C 99-02060 (MHP) (N.D. Cal.). 
  
 “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. 
  
 “Litigating Party” shall have the meaning set forth in Section 13.5(c). 
  
 “Manufacture” shall mean the manufacture and production of
Anti-IgE Antibodies and/or Anti-IgE Products, including, without limitation, for Clinical Requirements and Commercial Requirements, or to the extent permitted under this Agreement or any Ancillary Agreement, have any of those things done, and
“Manufacturing” shall have a corresponding meaning. The term “Manufacture” shall include manufacturing development (including, without limitation, the development of processes for such manufacturing or production or
technical methods of formulating Anti-IgE Antibodies or Anti-IgE Products), unless otherwise expressly indicated. 
  
 “Manufacturing and Logistics Sub-Committee” and “MLSC” shall have the meaning set forth in Section 5.7(a) herein.

  
 “Manufacturing and Supply Agreement(s)” shall
mean the Novartis/Genentech Manufacturing and Supply Agreement, and such other agreements related to the Manufacture and supply of Anti-IgE Antibodies or Anti-IgE Products as may be entered into pursuant to Section 10.4. 
  
 “Marketing Costs” shall have the meaning set forth in the
Financial Appendix. 
  
 “MTA” shall mean the
Material Transfer Agreement between Novartis and Genentech dated March 3, 1996, a copy of which has previously been provided to Tanox, as such agreement may be amended from time to time as permitted under Section 2.5 hereof. 
  
 “Net Profits” shall have the meaning set forth in the
Financial Appendix.  
  

 -11- 

 “Net Sales (U.S.)” and “Net Sales (EUR)” shall have the respective
meanings set forth in the Financial Appendix. 
  
 “Net
Sales” shall have the meaning set forth in the Financial Appendix. 
  
 “Net Selling Price Per Gram” shall mean the aggregate Worldwide Net Sales in a given year divided by the number of grams of Bulk Product within Finished Product sold in that year (it being understood
that samples, which are not sold, are excluded from this calculation). 
  
 “Non-Controlling Party” shall mean, with respect to any patent or patent application claiming any intellectual property Generated jointly by two or more Parties, any Party jointly owning the invention claimed in such patent
or patent application which Party is not the “Controlling Party.” 
  
 “Non-Tanox Committees” shall have the meaning set forth in Section 5.9. 
  
 “Novartis/Genentech Manufacturing and Supply Agreement” shall mean the Manufacturing and Supply Agreement between Novartis and Genentech
dated as of June 9, 2000 (a true and accurate copy of which has been provided to Tanox prior to the Effective Date of this Agreement), as such agreement may be amended from time to time as permitted under Section 2.5 hereof. 
  
 “Outline of Terms” shall have the meaning set forth in the
recitals to this Agreement. 
  
 “Patent Protected
Countries” shall mean those countries where the manufacture, use or sale of the applicable Anti-IgE Product would infringe a Valid Claim of a Tanox Anti-IgE Patent in such country (absent a license). 
  
 “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. 
  
 “Plans” shall mean the Worldwide Manufacturing and Supply
Plan and such plans and budgets as may be developed and approved by the Committees hereunder in accordance with Sections 5.3-5.8 with respect to Europe and the US, including, without limitation, the Europe/US Strategic Plan, Europe/US Brand Plan,
Europe/US Development Plan, US Brand Plan and Europe Brand Plan. 
  
 “Pricing Approval” shall mean, in any country where Public Authorities may approve or determine pricing for pharmaceutical products for reimbursement or otherwise, such approval or determination. 
  
 “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, including the proprietary Anti-IgE Trademarks used in Europe and the
United States in connection with any Anti-IgE Product. 
  

 -12- 

 “Prosecution Costs” shall mean all costs related to the filing, prosecution (including
interference costs and costs for actions under 35 U.S.C § 146) and maintenance of patent applications (but excluding costs related to in-house activities) to the extent reasonably agreed upon in advance by the Parties sharing such costs.

  
 “Public Authority” shall mean any
supranational, national, regional, state or local government, court, governmental agency, authority, board, bureau, instrumentality or regulatory body. 
  
 “Regulatory Jurisdiction” shall mean any jurisdiction in which Approval for Manufacturing, Developing or Commercializing Anti-IgE
Antibodies or Anti-IgE Products is required. 
  
 “Related
Agreements” shall mean the Amended and Restated D&L Agreement, the Cross-License Agreement, the Technology Transfer Agreements, and any agreements that are ancillary thereto (excluding any Ancillary Agreements). 
  
 “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, the JCA or the Ancillary D&L Agreement where such
Anti-IgE Antibody or Anti-IgE Product is Developed or Commercialized in the United States and/or Europe under this Agreement. 
  
 “Rest of World” and “ROW” shall mean any countries or territories other than the United States, Europe and East Asia.

  
 ***** 
  
 ***** 
  
 “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; provided, however, that for sales of Xolair in the United
States, if Net Sales (US) of Xolair in the ***** are: (i) greater than *****, but less than *****, such ***** period shall be extended by a further ***** with respect to Xolair; or (ii) greater than *****, such ***** period shall be extended by a
further ***** with respect to Xolair. 
  
 “Safety
Addendum” shall have the meaning set forth in Section 8.5 herein. 
  
 “Sales Costs” shall have the meaning set forth in the Financial Appendix. 
  
 “Sales Returns and Allowances” shall have the meaning set forth in the Financial Appendix. 
  

 -13- 

 “Semi-Exclusive” shall mean a license or sublicense, as applicable, under which each
semi-exclusive licensee has the right to exclude all others, but shall not have the right to exclude the licensor or any other semi-exclusive licensee. 
  
 “Senior Officer” shall mean the Chief Executive Officers of each of the Parties, or their respective designees in each case. 

 
 “Specifications” shall mean with respect to any Anti-IgE
Product, the applicable written specifications for such Anti-IgE Product in effect at a particular time including, but not limited to, specifications provided in any Approval for such Anti-IgE Product. 
  
 “Tanox Anti-IgE Patents” shall mean each of (i) the Anti-IgE
Patents listed in Schedule B hereto, (ii) any patent(s) issuing therefrom and from divisionals, continuations, or continuations-in-part of any patent applications listed on such Schedule, and (iii) patents that are reissues, reexaminations,
renewals, substitutions, extensions or foreign counterparts of any of the foregoing (i) or (ii), which, in each case, are Controlled by Tanox. 
  
 “Tanox Committees” shall have the meaning set forth in Section 5.9. 
  
 “Tanox Costs and Expenses” shall have the meaning set forth in the Financial Appendix. 
  
 “Technology Transfer Agreements” shall mean: (i) the
Technology Transfer Agreement between Novartis and Genentech dated as of September 4, 1998; (ii) the Technology Transfer License Agreement between Novartis and Genentech dated as of June 23, 2003, and (iii) any other manufacturing technology
transfer agreement entered into by two or more Parties in relation to the Manufacture of any Anti-IgE Antibody or Anti-IgE Products, in each case, as such agreements may be amended from time to time as permitted under Section 2.5 hereof. 

 
 “Term” shall mean the period beginning on the Effective
Date and ending on the earlier to occur of the expiration of this Agreement as described in Section 18.1 herein or termination of this Agreement with respect to all of Genentech, Novartis and Tanox as set forth in Article 18. 
  
 “Terminating Party(ies)” shall have the respective meanings
set forth in Section 18.3. 
  
 “Third Party”
shall mean any Person other than Novartis, Genentech, Tanox or their respective Affiliates. 
  
 “Third Party Agreements” shall have the meaning set forth in Section 14.5. 
  
 “United States” or “US” shall mean the United States of America, its territories and possessions. 
  
 ***** 
  

 -14- 

 “US Brand Plan” shall mean a Plan covering Commercialization of Anti-IgE Products and
Anti-IgE Antibodies in the United States in substantially the form of Exhibit A to the JCA. 
  
 “US Brand Team” or “USBT” shall have the meaning set forth in the JCA. 
  
 “Valid Claim” shall mean a then-existing claim of an issued and unexpired Anti-IgE Patent that has not been held invalid, unpatentable or
unenforceable by a decision of a governmental body or court of competent jurisdiction (which decision is unappealable or unappealed within the time allowed for appeal), and that has not been rendered unenforceable through disclaimer or otherwise.

  
 “Worldwide” shall mean the United States,
Europe, East Asia and ROW. 
  
 “Worldwide Net
Sales” shall mean the aggregate of Net Sales (U.S.), Net Sales (EUR), Net Sales (EA) (as defined in the Ancillary D&L Agreement) and Net Sales (ROW) (as defined in the Ancillary D&L Agreement). 
  
 “Worldwide Manufacturing and Supply Plan” shall have the
meaning set forth in Section 5.5(a)(iv) herein. 
  
 “Xolair” shall mean any product containing the Anti-IgE Antibody “E-25” or “omalizumab” (and modifications thereto resulting solely from changes in the Manufacturing process thereof), including without
limitation, the Anti-IgE Product Approved by the FDA as of June 20, 2003. 
  
 ARTICLE 2 
  
 PURPOSE AND EFFECT
OF THIS AGREEMENT 
  
 2.1 Outline of Terms and
Settlement. This Agreement, any Ancillary Agreements and the exhibits and attachments hereto and thereto, are intended by the Parties (i) to represent all aspects of the “Detailed Agreement” provided for under Section 8.2 of the
Outline of Terms and to implement and complete such provisions of the Outline of Terms, and (ii) to settle the Existing Claims of the Parties. Accordingly, with effect from the Effective Date, subject to Section 2.3, the Outline of Terms is hereby
superseded and any rights and obligations thereunder are hereby terminated and of no further force and effect from the Effective Date; ***** For the avoidance of doubt, subject to the foregoing proviso and to Section 11.16 *****, (a) any rights and
obligations of the Parties between the effective date of the Outline of Terms and the Effective Date of this Agreement are subject to the releases and dismissals pursuant to Section 3.1 of this Agreement; and (b) except as noted in this Section 2.1,
any provisions which, by their terms, survive termination of the Outline of Terms shall terminate and be of no further force or effect. *****. 
  
 With effect from the Effective Date, all references in any Ancillary Agreement dated prior to the Effective Date to the “Detailed Agreement” or
the Outline of Terms shall be deemed references to this Agreement, unless the context otherwise requires. 
  

 -15- 

 2.2 Ancillary D&L Agreement, JCA and Cross-License Agreement. This Agreement and the exhibits
and attachments hereto and thereto, are intended by the Parties to supplement the Ancillary D&L Agreement, the JCA and the Cross-License Agreement (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 Ancillary D&L Agreement, the Amended and Restated D&L Agreement, the Cross-License Agreement or the JCA, the terms of this Agreement shall prevail with respect to the development,
manufacture or commercialization (as such terms are generally construed rather than as strictly defined hereunder) of Anti-IgE Antibodies and Anti-IgE Products; provided, however, that (a) as between Novartis and Genentech only, to the
extent that this Agreement is silent as to a matter expressly dealt with in the JCA, the terms of the JCA (including, without limitation, any references therein to the survival of provisions of the Original JCA) shall prevail; and (b) as between
Novartis and Tanox only, to the extent that this Agreement is silent as to a matter expressly dealt with in the Ancillary D&L Agreement, the Ancillary D&L Agreement shall prevail. 
  
 2.3 ***** 
  
 2.4 No Rights Under Other Agreements. Nothing in this Agreement shall be deemed to cause (i) Tanox to be a party to, or a third party beneficiary
of, the JCA (except as expressly provided in Section 7.3 hereunder); (ii) Genentech to be a party to, or a third party beneficiary of, either of the D&L Agreements (other than as expressly set forth in Section 18.5 of this Agreement with respect
to the Ancillary D&L Agreement only); or (iii) Novartis to be a party to, or a third party beneficiary of, the Cross-License Agreement. Without limiting the foregoing, each of Tanox, Genentech and Novartis acknowledges and agrees that, except to
the extent that they are incorporated into this Agreement by express reference: (a) the provisions of: the JCA are for the exclusive benefit of Novartis and Genentech and their respective Affiliates; the D&L Agreements are for the exclusive
benefit of Novartis and Tanox and their respective Affiliates; and the Cross-License Agreement are for the exclusive benefit of Tanox and Genentech and their respective Affiliates, and (b) no Party who is not a party to the JCA, D&L Agreements
or Cross-License Agreement, as the case may be, shall have any right or claim against, or obligation to, those Parties that are parties to the respective agreements (or any of their respective Affiliates) by reason only of the provisions of the JCA,
D&L Agreements or Cross-License Agreement, as applicable. 
  
 2.5 ***** 
  
 2.6 Costs. Each Party hereto
shall bear all costs and expenditures incurred by it in connection with drafting and negotiation of this Agreement, any Ancillary Agreement and any Related Agreement, including, without limitation, attorney’s fees. 
  

 -16- 

 ARTICLE 3 
  
 SETTLEMENT 
  
 3.1 Releases and Dismissal of Existing Claims. Simultaneous with the execution of this Agreement, each of the Parties shall execute the appropriate
Release of Existing Claims attached as Exhibits A, B and C hereto. Promptly upon execution of this Agreement, each of the Parties shall take all necessary steps to dismiss with prejudice and otherwise terminate each of the Legal Proceedings,
including, without limitation, by filing with the applicable court, or arbitration panel, the applicable Joint Motions/Requests for Dismissal attached hereto as Exhibit D. 
  
 3.2 Costs. Each Party hereto shall bear all costs and expenditures incurred by it under or in connection with the
Existing Claims, including, without limitation, attorney’s fees and expenses and court and arbitration costs. Any additional costs and expenses necessarily incurred after the Effective Date hereof in connection with the Legal Proceedings and
their termination shall be borne by the Party incurring the expense. 
  
 3.3 Confidentiality Orders. Each Party agrees to be bound by the confidentiality orders stipulated in the respective Legal Proceedings to which it is a party and agrees to treat such orders as if they had been entered by the
applicable court or arbitration panel, regardless of whether or not they were actually entered by the applicable court or arbitration panel. 
  
 ARTICLE 4 
  
 COOPERATION 
  
 4.1 Integration of Programs and Cooperation Generally. In furtherance of the three-Party collaboration that was established in July 1996 under the Outline of Terms, the Anti-IgE Antibody and Anti-IgE Product development programs of
the respective Parties are hereby merged and integrated and shall be conducted as a single program pursuant to this Agreement. In light of the foregoing and in light of the rights of the respective Parties with respect to Anti-IgE Patents and
Know-How, Anti-IgE Antibodies and Anti-IgE Products, subject to the express rights and obligations of each of the Parties in this Agreement, each of Novartis, Genentech 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: 
  
 (a) cooperate in good faith in Manufacturing, Developing and Commercializing Anti-IgE Antibodies and Anti-IgE Products in accordance with, and to the
extent such Manufacturing, Development and Commercialization complies with the terms and conditions of this Agreement; 
  
 (b) use Commercially Reasonable Efforts to Develop, Manufacture and Commercialize Anti-IgE Products in the United States and Europe in accordance with
this Agreement; 
  

 -17- 

 (c) without limiting the foregoing, reasonably consider requests from the other Parties to pursue
Development (including manufacturing development) and Commercialization of Anti-IgE Products and indications therefor which the Parties are not yet actively pursuing pursuant to this Agreement taking into account the risk and incremental increase in
profit expected to be generated through the Development of such indication; and 
  
 (d) *****. 
  
 4.2 Scope of
Cooperation. 
  
 (a) Anti-IgE Antibodies and Anti-IgE
Products. Each of Novartis, Genentech and Tanox acknowledge and agree that, during the Term: 
  
 (i) Hu-901*****, E-25, ***** are agreed for purposes of this Agreement to be Anti-IgE Antibodies, ***** regardless of whether Hu-901*****,
E-25, ***** is or has been selected for development and/or commercialization under this Agreement or the Outline of Terms; 
  
 (ii) all development, manufacturing and commercialization (as such terms are generally construed rather than as defined hereunder) of
Anti-IgE Antibodies and Anti-IgE Products by or for the Parties, including, without limitation, Xolair, ***** and Hu-901, shall be pursuant to and subject to this Agreement, the JCA (solely with respect to Anti-IgE Antibodies and Anti-IgE Products
Developed and/or Commercialized hereunder) and the Ancillary D&L Agreement (solely with respect to Collaboration Products in East Asia and the ROW); 
  
 (iii) no Party shall develop or commercialize (as such terms are generally construed rather than just as defined hereunder) any Anti-IgE
Antibody or any Anti-IgE Product except as set forth in (ii) above, even if the Parties do not, without limiting any other obligations in this Agreement, Develop or Commercialize any such Anti-IgE Antibody or Anti-IgE Product at all or for any or
all potential indications; and 
  
 (iv) *****

  
 Without limiting the foregoing and except for its rights of co-development
with Novartis in East Asia under the Ancillary D&L Agreement and its rights of Development, Manufacture and Commercialization in East Asia and ROW in the event of a termination, as to Novartis, of this Agreement pursuant to Section 18.2, 18.3 or
18.5 or the Ancillary D&L Agreement, Tanox acknowledges that neither the Ancillary D&L Agreement nor the Amended and Restated D&L Agreement (or any successor Agreement to either of the foregoing) gives Tanox the right to independently
develop or commercialize Hu-901***** or any other Anti-IgE Antibody or Anti-IgE Product, and Tanox agrees that it will no longer contest that issue in arbitration or litigation, on appeal or otherwise. 
  
 (b) Other Products. 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; provided, however, that subject to Section 6.11 of this Agreement, nothing in this Agreement
shall limit the rights of (i) subject to applicable provisions 

  

 -18- 

 
of the D&L Agreements and the JCA, Novartis to develop and commercialize IgE inhibiting Antibodies which are not Anti-IgE Antibodies, (ii) subject to
applicable provisions of the Cross-License Agreement and the JCA, Genentech, to develop and commercialize IgE inhibiting Antibodies which are not Anti-IgE Antibodies, and (iii) subject to applicable provisions of the Cross-License Agreement and the
D&L Agreements, Tanox to develop and commercialize IgE inhibiting Antibodies which are not Anti-IgE Antibodies. 
  
 4.3 Compliance With Legal Requirements. The Parties, and their respective Affiliates, shall perform their obligations under this Agreement, and any
applicable Ancillary Agreement, including any Development, Manufacture 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. ***** 
  
 4.4 Information Sharing. Subject to the conditions set forth in
Article 15 hereof, each Party shall, and shall use commercially reasonable efforts to cause its relevant Affiliates performing obligations hereunder to, provide to any other Party any information or materials (including, without limitation,
Biological Materials, information or materials on substances, formulations, techniques, technology, equipment, data, results, reports, Know-How, sources for supply, patent position, business plans, proprietary information, trade secrets, customer
lists and marketing and sales information) which: (i) are created pursuant to the Outline of Terms or this Agreement; or (ii) are reasonably necessary for such other Party (or its relevant Affiliates performing obligations hereunder) to perform its
obligations, or exercise its rights, as expressly set forth in this Agreement, the JCA (with respect to the United States and Europe) and, with regard to East Asia and Rest of World, the Ancillary D&L Agreement (solely with respect to
Collaboration Products), or (iii) which are jointly owned by such Party and the potential recipient, in each case including without limitation, information or materials required for the Development (including selection), Manufacture or
Commercialization of any Anti-IgE Antibody or any Anti-IgE Product by such other Party (or its relevant Affiliates performing obligations hereunder). ***** 
  
 4.5 ***** 
  
 GOVERNANCE 
  
 5.1 Governance For Manufacture And For Europe and the US Generally. 
  
 (a) Generally. Subject to the express provisions of this Agreement, the Parties’ Manufacture of Anti-IgE Antibodies and Anti-IgE Products for Worldwide requirements, and the Parties’ Development
(including manufacturing development) and Commercialization of Anti-IgE Antibodies and Anti-IgE Products in Europe and the US, and their cooperation hereunder with respect thereto, will be subject to the governance, approval, direction, facilitation
and oversight of the Committees described in Sections 5.3 – 5.7 (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 for and Commercialization in the United States and Europe, and the selection of indications for which particular Anti-IgE Antibodies and Anti-IgE Products shall be Developed for and 

  

 -19- 

 
Commercialized in the United States and Europe, shall be made through the Committees described below. Each Party acknowledges and agrees that, except as
expressly set forth in Sections 5.3 – 5.7 (inclusive) of this Agreement, it shall have no right to have any representative attend, participate or vote in any Committee or considered a member of any Committee. 
  
 (b) Commercially Reasonable Efforts. Nothing in Article 5 shall limit
the Parties’ obligations to exercise Commercially Reasonable Efforts as provided for elsewhere in this Agreement. Notwithstanding the foregoing or anything else in this Agreement, 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 (in violation of its Commercially Reasonable Efforts
obligation) pursuant to this Article 5 or of any other rights pursuant to this Agreement. 
  
 (c) Interpretation of Financial Terms. Notwithstanding any of the foregoing to the contrary, no determination of the FSC (or any other Committee) (including any interpretation of the provisions of this
Agreement or any approval of financial statements) shall be binding against any of the Parties with respect to any financial terms or conditions (or any other rights or obligations of any of the Parties) contained in this Agreement or any Ancillary
Agreement. 
  
 (d) Limits on Development Activities.*****:

  
 (i)*****. 
  
 (e) For purposes of decision making by the Committees contemplated in this
Article 5, any human clinical trials conducted in a country, any interactions with clinical investigators in a country and any interactions with regulatory authorities in a country will be deemed to be Development activities conducted for such
country, other than with respect to the sharing of Development Costs, and Net Profits and Net Losses, as applicable. 
  
 5.2 Governance For East Asia and Rest of World. The Development and Commercialization of Anti-IgE Antibodies and Anti-IgE Products by Novartis and
Tanox for East Asia and the Rest of World and their cooperation with respect thereto will be subject to the Ancillary D&L Agreement, and the Manufacturing of Anti-IgE Antibodies and Anti-IgE Products for East Asia and the Rest of World and
Novartis’ and Tanox’s cooperation with respect thereto will be subject to this Agreement and the Ancillary D&L Agreement. Genentech acknowledges and agrees that it shall have no right to have any representative attend, participate or
vote in any committee established pursuant to either of the D&L Agreements or considered a member of any committee established pursuant to either of the D&L Agreements. Notwithstanding the foregoing, Novartis and Tanox, with respect to East
Asia, and Novartis, with respect to Rest of World, shall provide to the Europe/US Development Sub-Committee information as to their overall plans for the development of Anti-IgE Products in East Asia and the Rest of World (including indications to
be pursued, inclusion/exclusion criteria and dosing regimen). 
  

 -20- 

 5.3 The Joint Management Committee. 
  
 (a) Functions of the JMC. Overall governance of the Parties’ cooperation hereunder, the Manufacture of Anti-IgE
Antibodies and Anti-IgE Products for Worldwide requirements, and the Parties’ Development for and Commercialization in Europe and the US of Anti-IgE Antibodies and Anti-IgE Products will be approved, directed and facilitated by the 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 JMC within the foregoing scope shall be determined by the JMC subject to the terms and conditions
of this Agreement, but in any event shall include the following: 
  
 (i) review and approval of the Europe/US Brand Plan and Europe/US Strategic Plan (which constitutes the compilation of all other Plans hereunder including, without limitation, the Europe/US Development Plan, the US
Brand Plan and the Europe Brand Plan) which shall be recommended by the Joint Commercialization Committee under Section 5.5(a) below and subject to JMC approval hereunder; 
  
 (ii) review and approval of the Worldwide Manufacturing and Supply Plan, which shall be recommended by the
Joint Commercialization Committee under Section 5.5(a) below and subject to JMC approval hereunder; 
  
 (iii) coordination of the Parties’ various functional representatives in developing and executing Plans for Anti-IgE Antibodies and
Anti-IgE Products in an effort to ensure consistency and efficiency; 
  
 (iv) resolving disputes among members of the JCC and identifying unresolved disputes between members of the JMC to the Senior Officers of each of Novartis, Genentech and Tanox, if applicable, for resolution in
accordance with Section 12.1(b) hereof: 
  
 (v)
planning and coordinating cooperative efforts between the Parties and each of the Committees; 
  
 (vi) approving strategies for internal and external communications by the Parties with respect to the Anti-IgE Products and Anti-IgE
Antibodies in Europe and the US; and 
  
 (vii)
reviewing and approving all arrangements (including, without limitation, all material terms thereof) with one or more Third Parties under which such Third Parties shall undertake any Manufacture or supply obligations hereunder; ***** 
  
 No Plan shall be acted upon until it is approved by the JMC.

  
 (b) Composition of the JMC. The 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 JMC shall
be comprised of up to ***** members, with each Party being entitled to appoint up to ***** members to the JMC and with each Party having identified to the others in writing its initial members of the 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 JMC members may be changed by unanimous vote of the 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 JMC member may not, concurrently with JMC membership, be a member of the JCC, the US Brand Team, the Europe Brand
Team or any subcommittee of any of the foregoing (although a 

  

 -21- 

 
JMC member may participate in a non-voting capacity at any meetings of any such Committees or sub-committees provided that notice of such attendance has been
provided in advance). 
  
 (c) Chairperson of the JMC. The
JMC shall be chaired for a one (1) year term commencing August 1st of each year, by a JMC Chairperson selected from the JMC members appointed by Novartis and Genentech. Such JMC Chairperson shall be selected for each successive year by only one of
Novartis and Genentech, so that each of Novartis and Genentech will have the right to select the JMC Chairperson in alternate years. The JMC Chairperson for the term beginning August 1, 2003 has been selected by *****. The responsibilities of the
JMC Chairperson shall be determined by the JMC but shall in any event include the following: (i) setting meeting agendas; (ii) calling emergency meetings of the JMC; (iii) coordinating presentation of JMC disputes that have been unresolved for *****
to the applicable Parties’ Senior Officers pursuant to Section 12.1(b) hereof; and (iv) recording, preparing and, within a reasonable time, issuing minutes of the JMC meetings, which meeting minutes shall be submitted for approval of the
members of the JMC. The JMC Chairperson’s additional responsibilities and authority shall be limited to administrative matters and such JMC Chairperson shall not have the right or authority to make decisions for the JMC itself. 
  
 (d) Meetings of the JMC. The JMC shall meet as often as the JMC
determines to be necessary to ensure the effective implementation of this Agreement and the Ancillary Agreements (excluding the Ancillary D&L Agreement) and the Parties’ cooperation hereunder, but in no event less than quarterly, on such
dates and at such places to be unanimously agreed upon by the members of the JMC. Meetings of the 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 JMC meetings and such costs will not be reimbursable as part of costs and expenses to be shared hereunder. Decisions of the JMC shall be made by majority, with each Party having one (1) vote regardless of the number of
representatives present or voting; provided, however, that Tanox shall be entitled to vote only on matters materially related to, and only to the extent that they relate to:(I) the Development (excluding manufacturing development) of
Anti-IgE Antibodies and Anti-IgE Products in Europe and the US and/or (II) the Worldwide Manufacture and supply of only such Anti-IgE Antibodies and Anti-IgE Products as are either: (i) then being (or intended to be) Manufactured and supplied by
Tanox pursuant to Section 10.4 of this Agreement; or (ii) were identified and synthesized by Tanox. For the avoidance of doubt, Tanox shall not be entitled to vote on matters which solely relate to, or to the extent that they relate to, the
Commercialization of Anti-IgE Antibodies and Anti-IgE Products in Europe or the US or the Worldwide Manufacture and supply of such Anti-IgE Antibodies and Anti-IgE Products as: (A) are not then being (or intended to be) Manufactured and supplied by
Tanox and (B) were not identified or synthesized by Tanox. Notwithstanding the foregoing, if the Tanox members on the JMC believe in good faith that a decision of the Novartis and Genentech members of the JMC is a matter with respect to which Tanox
has a right to vote in accordance with the foregoing (and either Genentech or Novartis in good faith objects to Tanox’ right to so vote), such Tanox members in the course of the JMC meeting at which such decision is made, shall so indicate, and
the JMC Chairperson shall promptly refer the matter to the Senior Officers for expedited resolution by the Senior Officers. It is contemplated that a reasonable number of additional representatives of the Parties may attend and participate in a
non-voting capacity in the JMC meetings where such additional representatives are reasonably required to address specific issues to be discussed at such meeting of the JMC. The procedures which will govern the operation of the JMC and its decision
making 

  

 -22- 

 
process and the specific criteria to be used to resolve disputes as contemplated herein will be determined by the JMC. For the avoidance of doubt, subject to
Section 5.3(a)(vii), the Genentech members of the JMC shall not be entitled to vote on the matters described in SubSections (A) and (B) of Section 5.5(a)(iv). 
  

(e) Sub-Committees of the JMC. The JMC may from time to time establish such sub-committees tasked with specific functions, as the JMC reasonably
deems appropriate to implement this Agreement and the Ancillary Agreements (excluding the Ancillary D&L Agreement) in so far as they apply with respect to the Manufacture of Anti-IgE Antibodies and Anti-IgE Products for Worldwide requirements
and/or the Parties’ Development for and Commercialization in Europe and/or the US of Anti-IgE Antibodies and Anti-IgE Products. The JMC shall not have the authority to create sub-committees which have the effect of excluding Tanox from its
participation and voting rights otherwise provided hereunder. 
  
 5.4 JMC Requirements For Unanimous Consent Between Novartis and Genentech. Notwithstanding anything to the contrary contained herein, the unanimous affirmative vote of Novartis and Genentech at the JMC shall be required for the
following matters: 
  
 (a) approval of a Europe/US Brand Plan to
be presented by the JCC, which Europe/US Brand Plan shall include, without limitation: 
  
 (i) a US Brand Plan and a Europe Brand Plan and budgets relating thereto, in substantial conformity with the form of the current US Brand
Plan (with Manufacturing information redacted) provided to Tanox prior to the Effective Date; 
  
 (ii) a statement or description of annual detail requirements for the United States and Europe; 
  
 (iii) new indications and clinical development plans and
proposed changes to any of the foregoing for Europe and the US; 
  
 (iv) the form of initial package insert for each Anti-IgE Product for Europe and the US (it being agreed that the final package insert for each Anti-IgE Product for Europe and the US shall be approved in writing by a
designated JMC representative from each of Genentech and Novartis); and 
  
 (v) all Product Trade Dress (subject to Novartis’ selection of Anti-IgE Trademarks pursuant to Section 13.1 of this Agreement and Section 11.3 of the JCA) for Europe and the US and any changes to such Product
Trade Dress (it being understood that Genentech’s name shall appear on packaging of Anti-IgE Products in a Regulatory Jurisdiction in Europe only to the extent required by Legal Requirements in such Regulatory Jurisdiction); 
  
 (b) the budget for any Plan for Europe or the US that is not contained within
the budget for the Europe/US Brand Plan; 
  
 (c) material changes
to the budget contained in any approved Plan, including, without limitation, changes to any such budget which represent ***** in a given year; 
  
 (d) pricing of Anti-IgE Products for Europe and the United States, including any price increase strategies, and any proposed changes to any of the
foregoing; 
  

 -23- 

 (e) allocations of scarce Anti-IgE Product supply in accordance with Section 10.6 of this Agreement and
deviations from the principles of allocation provided therein; and 
  
 (f) material terms of licenses to any Required Third Party Rights under Section 6.8. 
  
 5.5 The Joint Commercialization Committee. 
  
 (a) Functions of the JCC; Preparation of Plans. The JCC shall be established by the Parties for the purpose of reviewing and recommending Plans for
review and approval by the JMC (as provided in Section 5.3(a)(i) and (ii) above) and overseeing the execution by the Parties of those Plans approved by the JMC. Specifically, the JCC shall be responsible for overseeing the preparation of, on an
annual basis, a Worldwide Manufacturing and Supply Plan and a Europe/US Strategic Plan (which consists of a compilation of the Europe/US Development Plan, the US Brand Plan and the Europe Brand Plan, each as set forth below). Each such Plan shall be
subject to the approval of the JMC pursuant to Section 5.3(a)(i) and (ii) hereof, subject to Section 5.3(d) hereof; provided, however, that (I) the Europe/US Brand Plan shall be approved by Novartis and Genentech unanimously pursuant
to Section 5.4(a) hereof and (II) any budget which forms part of any other Plan for Europe or the US shall be approved by Novartis and Genentech unanimously pursuant to Section 5.4(b) hereof. 
  
 (i) The Europe/US Brand Plan shall comprise a Plan as
described in Section 5.4(a) above. 
  
 (ii) The
Europe/US Strategic Plan shall comprise a compilation of separate Plans for the Development (including manufacturing development) and Commercialization of Anti-IgE Products in each applicable Regulatory Jurisdiction in Europe and the US, including,
without limitation, a detailed budget setting forth the total expenditures, for each of the United States and Europe, expected to be incurred during each quarter of the upcoming year. The Europe/US Strategic Plan shall comprise a compilation of
Plans substantially conforming with the form and criteria as *****. 
  
 (iii) The Europe/US Development Plan, to be prepared by the E/US DSC, shall comprise: (A) a detailed Plan for the Development (including manufacturing development) of Anti-IgE Products in each applicable Regulatory
Jurisdiction for each of the United States and Europe, and (B) a detailed 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 each of the United States and Europe. The Europe/US Development Plan shall substantially conform
with the form and criteria as the Europe/US Development Plan provided to Tanox (with Manufacturing information redacted) prior to the Effective Date. 
  
 (iv) The Worldwide Manufacturing and Supply Plan, to be prepared by the MLSC, shall comprise a detailed Plan for the Manufacture
(excluding manufacturing development, which for the avoidance of doubt shall be included in the Europe/US Development Plan) and supply of Anti-IgE Products for each Regulatory Jurisdiction Worldwide, including, without limitation, an overall
manufacturing plan for Anti-IgE Products Worldwide and a detailed forecast and allocation analysis for each of the United States, Europe, East Asia and the Rest of World and a detailed Worldwide budget for 

  

 -24- 

 
each quarter of the upcoming year. The Worldwide Manufacturing and Supply Plan shall substantially conform with the form and components provided to Tanox
prior to the Effective Date. Genentech shall not have a vote regarding: 
  
 (A) filling and finishing of Anti-IgE Products for use or sale in East Asia or Rest of World (except to the extent such decision affects Genentech’s obligations with respect to the supply of Bulk Product
hereunder); or 
  
 (B) Manufacture and supply of
Anti-IgE Antibodies and Anti-IgE Products for use or sale in East Asia and/or ROW under the Ancillary D&L Agreement, which Anti-IgE Antibodies and Anti-IgE Products are not Manufactured under this Agreement for the United States or Europe or by
Genentech for East Asia and/or ROW (except to the extent such decision affects Novartis’ obligations with respect to the supply of Bulk Product for the United States and Europe hereunder and except to the extent such decision involves the use
of any Genentech technology for Manufacture in East Asia or ROW). 
  
 (b) Other Functions of the JCC. In addition to the duties set forth in Section 5.5(a) above, the JCC’s responsibilities will include: 
  
 (i) monitoring compliance with all Plans (including but not limited to the Europe/US Strategic Plan, Europe/US Brand Plan, US Brand Plan
and Europe Brand Plan); 
  
 (ii) reviewing and
overseeing the implementation of positioning and market strategies for Europe and the US, and core advertising and core Promotional Materials and Europe/US strategies related thereto, so long as the foregoing are consistent with the Europe/US
Strategic Plan approved by the JMC, including without limitation, making decisions to seek or include any new indication in the US or Europe for an Anti-IgE Product, and to address situations where indications for any Anti-IgE Product are not
consistent for all Regulatory Jurisdictions in the US and Europe, consistent with the Europe/US Strategic Plan; 
  
 (iii) reviewing Product Trade Dress for Europe and the US; provided, however, that any and all Product Trade Dress (subject
to Novartis’ selection of Anti-IgE Trademarks pursuant to Section 13.1 of this Agreement and Section 11.3 of the JCA and Section 11.1 of the Ancillary D&L Agreement) and any change thereto must be approved unanimously by the Novartis and
Genentech members of the JMC pursuant to Section 5.4(a)(v) hereof; 
  
 (iv) rectifying any inconsistencies between the Brand Plans for Europe and/or the United States and the Europe/US Strategic Plan that cannot be rectified by the USBT and EBT under the JCA; 
  
 (v) reviewing Plans other than those set forth in Section
5.5(a) above for consistency with the Europe/US Strategic Plan, Europe/US Brand Plan, Europe/US Development Plan and Worldwide Manufacturing and Supply Plan and recommending to the JMC final adoption of such Plans; 
  
 (vi) recommending for unanimous approval by the Novartis and
Genentech members of the JMC under Section 5.4(d) above the pricing of Anti-IgE Products in the United States and Europe; 
  

 -25- 

 (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 Europe and the US, and developing strategies with respect to, and planning and coordinating, external communications by the Parties with respect
to Manufacture of Anti-IgE Products Worldwide; 
  
 (viii) reviewing and approving all protocols, including concept sheets and protocol summaries, for studies in the US or Europe involving any Anti-IgE Product; provided, however, that such protocols are consistent with the
Europe/US Development Plan approved by the JMC and consistent with new indications and clinical development plans for Europe and the US which are unanimously approved by the Novartis and Genentech members of the JMC pursuant to Section 5.4 herein;
 
  
 (ix) reviewing and submitting
for JMC approval all Manufacturing arrangements between the Parties hereunder, and all agreements with any Third Parties under which a Third Party shall undertake any Manufacture and supply obligations hereunder; provided, however,
that notwithstanding the restrictions on any Party’s rights to vote with respect to Manufacturing issues (including, without limitation, the restrictions on Genentech’s rights to vote under Sections 5.3(d) and 5.5(a)(iv)),if such Third
Party agreement involves the use of any information or materials relating to Manufacturing Anti-IgE Antibodies or Anti-IgE Products, each Party with an ownership interest in such information or materials shall have the right to veto such Third Party
agreement, at its sole discretion; 
  
 (x)
coordinating with other Committees, as applicable, to ensure consistency of supply of Anti-IgE Products Worldwide and compliance with Legal Requirements regarding the Manufacture and supply of Anti-IgE Products Worldwide; and 
  
 (xi) approving actual calendar year spending by any Party
that exceeds the total calendar year approved budget for that Party in any 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 affirmative vote of Genentech and Novartis at the JCC). 
  
 (c) Composition of the JCC. The JCC shall have members appointed by each of the Parties, provided that *****. As of the Effective Date, the 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 others in writing its initial members of the 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 JCC members may be changed by the 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 JCC member may not, concurrently with JCC membership, be a member of the JMC. 
  
 (d) Chairperson of the JCC. The JCC shall be chaired for a one (1) year term, commencing August 1st of each year, by a JCC Chairperson selected from one of the Alliance Managers appointed by either Genentech or Novartis. Such JCC Chairperson shall be
selected for each successive year by either Genentech or Novartis so that each of them will have the right to select the JCC Chairperson in alternate years. The JCC Chairperson for the term beginning 

  

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August 1, 2003 has been selected by *****. The responsibilities of the JCC Chairperson shall be determined by the JCC but shall in any event include the
following: (i) setting meeting agendas; (ii) calling emergency meetings of the JCC; (iii) coordinating presentation of disputes between members of the JCC that have been unresolved for ***** to the JMC pursuant to Section 5.5(e) below; and (iv)
recording, preparing and, within a reasonable time, issuing minutes of the JCC meetings, which meeting minutes shall be submitted for approval by the members of the JCC. The JCC Chairperson’s additional responsibilities and authority shall be
limited to administrative matters and such JCC Chairperson shall not have the right or authority to make decisions for the JCC itself. 
  
 (e) Meetings. The JCC shall meet as often as the JCC determines to be necessary to meet its objectives under this Agreement or as directed by the
JMC but in no event less than once every quarter or more often as needed, on such dates and at such places as are agreed upon between Genentech and Novartis (subject to prior notice and to reasonable consideration of Tanox’s schedule and
availability). Meetings of the 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 JCC meetings (and meetings of any JCC
subcommittees) and such costs will not be reimbursable as part of costs and expenses to be shared hereunder (except to the extent constituting Marketing Costs under the Financial Appendix). Decisions of the JCC shall be made by majority, with each
Party having one (1) vote regardless of the number of representatives present or voting; provided, however, that: 
  
 (i) Tanox shall be entitled to vote at the JCC only on matters materially related to, and only to the extent that they relate to, the
Development (excluding manufacturing development) of Anti-IgE Antibodies and Anti-IgE Products in Europe and the US (and matters concerning publications of Development (excluding manufacturing development) results Worldwide in accordance with
Section 15.2) or to the Worldwide Manufacture and supply of only such Anti-IgE Antibodies and Anti-IgE Products as are either: (i) then being (or intended to be) Manufactured and supplied by Tanox pursuant to Section 10.4 of this Agreement or (ii)
were identified and synthesized by Tanox. For the avoidance of doubt, Tanox shall not be entitled to vote on JCC matters which solely relate to, or to the extent that they relate to, the Commercialization of Anti-IgE Antibodies and Anti-IgE Products
in Europe or the US, or the Worldwide Manufacture and supply of such Anti-IgE Antibodies and Anti-IgE Products as: (I) are not then being (or intended to be) Manufactured and supplied by Tanox and (II) were not identified and synthesized by Tanox.
Notwithstanding the foregoing, if the Tanox members on the JCC believe in good faith that a decision of the Novartis and Genentech members of the JCC is a matter with respect to which Tanox has a right to vote in accordance with the foregoing (and
either Genentech or Novartis in good faith objects to Tanox’ right to so vote), such Tanox members in the course of the JCC meeting at which such decision is made, shall so indicate, and the JCC Chairperson shall promptly refer the matter to
the full membership of the JMC for expedited resolution by the JMC; and 
  
 (ii) Genentech shall not be entitled to vote at the JCC on matters which solely relate to Europe, or to the extent that they relate to Europe, unless such matters are expected by the JCC members appointed by Novartis
in their reasonable judgment to result in any of the following: (A) ***** change in the aggregate budget for Europe for a particular year; (B) a substantial negative effect on the profits to be obtained from or 

  

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costs to be shared for Anti-IgE Products in Europe or the United States; (C) determination of a key strategic issue or issues; or (D) denying the Genentech
appointed members the opportunity to have meaningful insight into the overall decision making with respect to Development for and Commercialization in Europe of Anti-IgE Products. Demonstrative examples of matters as to which Genentech shall have
the right to vote even to the extent they relate to Europe shall include, without limitation: pricing of Anti-IgE Products in Europe and forecasts, key strategic initiatives, core positioning and strategies, detailing requirements and seeking
additional indications in Europe for Anti-IgE Products. Notwithstanding the foregoing, if the Genentech members on the JCC believe in good faith that the decision of the Novartis members of the JCC satisfies one of the foregoing criteria, such
Genentech members in the course of the JCC meeting at which such decision is made, shall so indicate, and the JCC Chairperson shall promptly refer the matter to the JMC for expedited resolution by the JMC members entitled to vote with respect to the
subject matter of the Dispute. Moreover, a unanimous vote of Novartis and Genentech shall be required to approve (i) the principal material terms of any co-promotion or co-marketing arrangement with respect to Anti-IgE Products in Europe with any
Third Party *****, and (ii) budget variances as provided in Section 5.5(b)(xi). 
  
 In the event that the JCC is unable to make a decision due to a deadlock lasting longer than *****, the JCC Chairperson shall submit the matter being considered to the members of the JMC of the Parties to the Dispute
for a decision at the JMC’s next scheduled meeting or at a meeting called pursuant to Section 5.3(c), as the case may be (and such Party, if any, that is not a Party to the Dispute shall be excluded from that portion of the JMC meeting
discussing such Dispute). 
  
 5.6 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 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; 
  
 (b) providing single-point communication for seeking consensus both internally within the respective Party’s organization and together regarding key
global strategy and Plan issues, as appropriate, including facilitating review of external corporate communications in accordance with Section 20.13; 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 JMC (as set forth in Section 5.5(e)) or JCC) as appropriate, in a timely manner. 
  
 5.7 JCC Sub-Committees. The 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 and the Ancillary Agreements (excluding the Ancillary D&L Agreement) in so far as they apply with respect to the Manufacture of Anti-IgE Antibodies and Anti-IgE Products for
Worldwide requirements and/or the Parties’ Development for and Commercialization in Europe and the US of Anti-IgE Antibodies and Anti-IgE Products. The sub-committees described in Sections 5.7(a)–(c) shall in any event be maintained at all
times 

  

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during the Term of this Agreement. Unless otherwise provided herein, the number of members of such sub-committees or any others appropriately created by the
JCC shall rest in the JCC’s discretion; provided, however, that: (i) each Party shall have the right to appoint an equal number of representatives to the E/US DSC and the Finance Sub-Committee; and (ii) Novartis and Genentech
shall have the right to appoint an equal number of representatives to the MLSC, and Tanox shall only have the right to appoint representatives to the MLSC if (I) it is requested by the JMC, and agrees pursuant to Section 10.4, to Manufacture an
Anti-IgE Antibody or Anti-IgE Product or (II) an Anti-IgE Antibody or Anti-IgE Product identified and synthesized by Tanox is being Developed or Commercialized hereunder, and, in either such case, Tanox shall also have the right to appoint a number
of representatives to the MLSC equal to those appointed by Genentech and Novartis, respectively. The sub-committees of the JCC shall meet as frequently as they determine to be necessary to accomplish their objectives, but in no event less than
quarterly. Recommendations of sub-committees of the JCC shall be presented to the JCC and the JMC, or other appropriate committees as necessary. Decisions of sub-committees of the JCC shall be made by majority, with each Party having one (1) vote
regardless of the number of representatives present or voting; provided, however, that: (i) each Party shall be entitled to vote on issues before MLSC and the E/US DSC only to the extent that such Party would be entitled to vote on
such matter if it were before the JCC; and (ii) Tanox shall not be entitled to vote on any matter before the FSC. If a sub-committee of the JCC is unable to reach a decision on any issue within ***** after presentation, the issue shall be referred
to the Alliance Managers of the Parties to the Dispute for presentation to the JCC at the JCC’s next scheduled meeting (and such Party, if any, which is not a party to the Dispute shall be excluded from that portion of the JCC meeting
discussing such Dispute). Unless otherwise provided herein, the procedures and operation of all JCC sub-committees shall be determined by such sub-committees. 
  

(a) Manufacturing and Logistics Sub-Committee. A Manufacturing and Logistics Sub-Committee (“MLSC”) shall be established as a
sub-committee of the JCC and tasked with coordination of logistical issues, Manufacturing (excluding manufacturing development) obligations and related issues Worldwide. The MLSC shall have at least ***** members, and each of Novartis and Genentech
shall appoint an equal number of members to the MLSC. Tanox shall only have the right to appoint representatives to the MLSC if: (I) the Novartis and Genentech members of the JMC request Tanox, and Tanox agrees pursuant to Section 10.4, to
Manufacture an Anti-IgE Antibody or Anti-IgE Product; or (II) an Anti-IgE Antibody or an Anti-IgE Product identified and synthesized by Tanox is being Developed or Commercialized hereunder, and in either such case, Tanox shall have the right to
appoint a number of representatives to the MLSC equal to those appointed by Genentech and Novartis, respectively. Each Party shall notify the other Parties of the identity of its appointed members and any changes thereto. The MLSC shall meet as
often as the MLSC determines to be necessary to meet its objectives under this Agreement or as directed by the JCC, on such dates and at such places as are agreed upon between the members of the MLSC. The MLSC meetings may be held in person or in
any reasonable manner, including, without limitation, by telephone or video conference. Notwithstanding any other provision of this Agreement, members of the MLSC appointed by Tanox shall be entitled to attend, vote and participate in meetings of
the MLSC (including, without limitation, receiving materials with respect thereto) only on matters materially related to, and only to the extent that they relate to, the Manufacture and supply of (I) such Anti-IgE Antibodies and Anti-IgE Products as
are then being (or intended to be) Manufactured and supplied by Tanox or (II) such Anti-IgE Antibodies and Anti-IgE Products 

  

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identified and synthesized by Tanox as are being Developed or Commercialized hereunder, subject to Section 5.10(c). For the avoidance of doubt, members of
the MLSC appointed by Tanox shall not be entitled to attend, vote or participate in meetings of the MLSC (including, without limitation, receiving materials with respect thereto) which solely relate to, or to the extent that they relate to, the
Manufacture and supply of such Anti-IgE Antibodies and Anti-IgE Products as are not then being (or intended to be) Manufactured and supplied by Tanox and were not identified and synthesized by Tanox. The MLSC shall be responsible for: 
  
 (i) preparing the Worldwide Manufacturing and Supply Plan
(as defined in Section 5.5(a)(iv) above) for approval by the JCC and the JMC as provided hereinabove, including making presentations of such Plan to the JCC; 
  

(ii) coordinating all stages of supply of Anti-IgE Products (including, without limitation, Xolair and Hu-901) pursuant to the
Manufacturing and Supply Agreement(s) to satisfy the Worldwide Manufacturing and Supply Plan and supply needs for the United States, Europe, East Asia and the Rest of World; 
  
 (iii) coordinating the presentation to the JCC and JMC of disputes to be resolved in accordance herewith
arising between the Parties under the Manufacturing and Supply Agreement(s) or the Worldwide Manufacturing and Supply Plan, for resolution by the JCC or JMC, as applicable, as provided herein; 
  
 (iv) recommending and coordinating necessary adjustments to
the Manufacturing schedule to ensure meeting the strategic plans for all stages of Anti-IgE Products; 
  
 (v) recommending optimal inventory levels and safety stock targets; 
  
 (vi) reviewing and submitting for JCC review pursuant to Section 5.5(b)(ix) any Third Party contracts under
which a Third Party shall undertake any Manufacture and supply obligations hereunder; 
  
 (vii) in accordance with the Manufacturing and Supply Agreement(s), providing coordination of key parameters for all stages of the
Worldwide Manufacturing and Supply Plan as identified by the MLSC, including, but not limited to, supply risk management, process improvements, cost reduction initiatives, logistics, environmental, health and safety opportunities, quality control
and GMP; 
  
 (viii) monitoring key milestones of
the scale-up and launch process for all stages of the Worldwide Manufacturing and Supply Plan as identified by the MLSC; and 
  
 (ix) coordinating collection and review of any Anti-IgE Product quality complaints Worldwide. 
  
 The JCC Chairperson shall appoint one member of the MLSC to act as the
MLSC’s chairperson for a term of one year. The MLSC chairperson’s additional responsibilities and authority shall be limited to administrative matters and such MLSC chairperson shall not have the right or authority to make decisions for
the MLSC itself. 
  
 (b) Europe/US Development
Sub-Committee. A Europe/US Development Sub-Committee (“E/US DSC”) shall be established as a sub-committee of the JCC and tasked with coordination of Development (including manufacturing development) issues for Europe and the US
and coordination of regulatory issues for Europe and the US. The E/US DSC shall have at 

  

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least ***** members, and each Party shall have the right to appoint an equal number of members to the E/US DSC. The Tanox member of the E/US DSC shall not be
entitled to participate therein (including, without limitation, receiving materials with respect thereto) to the extent involving, with respect to any Anti-IgE Antibodies or Anti-IgE Products as are not then being or intended to be Manufactured by
Tanox pursuant to Section 10.4 and were not identified and synthesized by Tanox that are being Developed hereunder (subject to Section 5.10(c)), manufacturing processes or technical processes of making new formulations. Each Party shall notify the
other Parties of the identity of its appointed member(s) of the E/US DSC and any changes thereto. The E/US DSC shall meet as often as the E/US DSC determines to be necessary to meet its objectives under this Agreement or as directed by the JCC, on
such dates and at such places as are agreed upon between the members of the E/US DSC. The E/US DSC meetings may be held in person or in any reasonable manner, including, without limitation, by telephone or video conference. The E/US DSC shall be
responsible for: 
  
 (i) preparing the Europe/US
Development Plan (as defined in Section 5.5(a)(iii) above) for approval by the JCC and the JMC as provided hereinabove, including making presentations of such Plan to the JCC and JMC (as appropriate); 
  
 (ii) overseeing Anti-IgE Product and Anti-IgE Antibody
studies and Clinical Trial activities in accordance with the Europe/US Development Plan, including specifications, timelines and priorities; 
  
 (iii) making modifications to and monitoring progress of Anti-IgE Product and Anti-IgE Antibody studies for Europe and/or the US in any
year (including reviewing costs and activities against the Europe/US Development Plan) and proposing additional product studies for Europe and/or the US; 
  
 (iv) facilitating the exchange of all Development (including manufacturing development) information and data relating to Anti-IgE Product
and Anti-IgE Antibody studies for Europe and/or the US; 
  
 (v) reviewing and approving protocols for all Anti-IgE Product and Anti-IgE Antibody studies for Europe and/or the US; 
  
 (vi) 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 Europe and the United States with respect to the Anti-IgE Products and Anti-IgE Antibodies; 
  
 (vii) facilitating the exchange of all regulatory
information and data reasonably necessary 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 for Anti-IgE Antibodies or
Anti-IgE Products in Europe and/or the US; 
  
 (viii) establishing the schedule and implementation strategy for all regulatory filing for Approval of each Anti-IgE Product in both Europe and the US in accordance with the Europe/US Development Plan; 
  

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 (ix) coordinating the presentation to the JCC and JMC of disputes to be resolved in
accordance herewith arising between the Parties under the Europe/US Development Plan, for resolution by the JCC or JMC, as applicable, as provided herein; 
  
 (x) reviewing and coordinating distribution to the Parties of periodic safety updates prepared by the applicable Parties showing pertinent
safety and adverse event information with respect to Anti-IgE Products being Commercialized or under Development. 
  
 On a rotating basis, each Party shall be entitled to appoint the E/US DSC’s chairperson for a term of one year. The E/US DSC chairperson’s
additional responsibilities and authority shall be limited to administrative matters and such E/US DSC chairperson shall not have the right or authority to make decisions for the E/US-DSC itself. 
  
 (c) Finance Sub-Committee. A Finance Sub-Committee (the
“FSC”) shall be established as an informal sub-committee of the JCC and tasked with supporting the JCC, the 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 Financial Appendix and the terms of this Agreement. The FSC shall have at least ***** members, and each Party shall be entitled to appoint an equal number of members to the FSC;
provided, however, that member(s) of the FSC appointed by Tanox shall be non-voting members. Each Party shall notify the other Party of the identity of its appointed member(s) and any changes thereto. The Novartis and Genentech
member(s) of the FSC shall be responsible for administering operations under the Financial Appendix in accordance with the provisions thereof and in accordance with the terms of this Agreement, including, without limitation, advising the JCC and the
JMC with respect to: (i) actual financial results, including the quarterly financial results for GenNov (as described in the Financial Appendix); (ii) forecasts; (iii) budgets and long range plans; (iv) inventory levels; (v) Net Profits and Net
Losses and the calculation thereof; and (vi) other financial matters arising under the Financial Appendix or otherwise relating to the Parties’ cooperation 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. Genentech and Novartis, as applicable, shall provide Tanox with copies of material final reports, if any,
which report the foregoing matters (to the extent not already provided to Tanox under the Financial Appendix or otherwise) which are submitted to the FSC or to the other Party in connection with matters discussed by the FSC (it being understood
that, without limiting any obligations to provide reports as set forth in the Financial Appendix, Genentech and Novartis have no affirmative obligation to generate such documents in the first place). The Novartis and Genentech members of the FSC
shall communicate and meet with the Tanox member of the FSC, including, without limitation by telephone and video conference, as frequently as reasonably required by the Tanox member of the FSC, but not more frequently than once per quarter
unless otherwise agreed between the members of the FSC from time to time, to allow the Tanox member of the FSC to understand financial information provided by Genentech and Novartis under this Agreement and the Financial Appendix relating to
amounts payable to Tanox hereunder. The members of the Finance Sub-Committee shall together: (I) coordinate the presentation to the JCC of disputes to be resolved in accordance herewith arising between the Parties under the Financial Appendix for
resolution in accordance with this Agreement; and (II) develop and analyze proposals for reasonably amending and revising the provisions of the Financial Appendix, this Agreement and 

  

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the JCA relating to accounting and reporting matters so as to permit all Parties (and their relevant Affiliates) to obtain proper and advantageous tax and
accounting treatments, 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 Financial Appendix in effect on the Effective Date. For the avoidance of doubt, all revisions and modifications to the Financial Appendix require the
written consent of all Parties. 
  
 5.8 Matters To Be Referred
by USBT and EBT. All Plans proposed to the JCC by the United States Brand Team or the Europe Brand Team pursuant to the JCA with respect to the Development of Anti-IgE Antibodies and Anti-IgE Products for the United States or Europe, and all
other recommendations to the JCC by the United States Brand Team or the Europe Brand Team pursuant to the JCA with respect to the Development of Anti-IgE Antibodies and Anti-IgE Products for the United States or Europe, shall be subject to review
and approval by the E/US DSC. All Disputes arising in the USBT or EBT shall be resolved in accordance with the applicable provisions of the JCA. 
  
 5.9 Change of Control *****. ***** 
  
 5.10 Disclosure of Information. 
  
 (a) The Committees (including Sub-Committees) hereunder shall provide Parties participating thereon (and to the extent of their participation thereon)
with copies of all information, documents, presentations and reports submitted to or issued by such Committee. Without limiting the generality of the foregoing, each Party shall provide to the other Parties (to the extent not already received by
such other Party) on a given Committee any information, documents, presentations or reports submitted by the Party to, or received by the Party from, such Committee (to the extent of the receiving Party’s participation thereon). 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 Committee. 
  
 (b) ***** 
  
 (c) ***** 
  
 (i) ***** 
  
 ***** 
  
 5.11 Certain Limitations on Committees. For the avoidance of doubt, approval from the JMC or any other 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 12 of this Agreement. Notwithstanding any of the foregoing to the
contrary, no Committee shall have the authority or ability to amend the express provisions of this Agreement. 
  

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 ARTICLE 6 
  
 LICENSES 
  
 6.1 No Derogation or Expansion. The Parties acknowledge and agree that nothing in this Agreement shall derogate from the license grants pursuant to
the D&L Agreements, the Cross-License Agreement or the JCA. The Parties acknowledge and agree that none of the licenses granted pursuant to this Article 6 shall in any way expand the Parties’ respective obligations to disclose Company
Information (including but not limited to Biological Materials and Know-How) pursuant to Section 4.4. 
  
 6.2 [Intentionally Left Blank]. 
  
 6.3 License from Genentech to Novartis and Tanox. 
  
 (a) As to any Anti-IgE Patents and Company Information (including, without limitation, Know-How and Biological Materials) Controlled by Genentech which
are required for, or to the extent they are used by, Novartis (or its Affiliates) for the Development, Manufacture or Commercialization of Anti-IgE Antibodies or Anti-IgE Products in accordance with the terms and conditions of this Agreement and/or
the JCA (solely with respect to the United States and Europe) and/or the Ancillary D&L Agreement (solely with respect to East Asia and ROW) Genentech grants Novartis and its Affiliates a license and/or sublicense, as applicable, with the
following, and only the following, scope of rights as to the following territories (in each case subject to Section 4.2(a) of this Agreement): 
  
 (i) in the United States such license shall be: (A) Semi-Exclusive with Genentech (and its Affiliates) and Tanox (and its Affiliates)
only, as to Development of Anti-IgE Antibodies and Anti-IgE Products in accordance with the terms and conditions of this Agreement and solely for use in connection therewith; (B) Semi-Exclusive with Genentech (and its Affiliates) only, as to
Manufacture of Xolair in accordance with Plans approved by the JMC (and solely for use in connection therewith), and Semi-Exclusive with Genentech (and its Affiliates) and Tanox (and its Affiliates) as to the Manufacture of Anti-IgE Antibodies and
Anti-IgE Products (other than Xolair) in accordance with Plans approved by the JMC (and solely for use in connection therewith); and (C) Semi-Exclusive with Genentech (and its Affiliates) only, as to Commercialization of Anti-IgE Antibodies and
Anti-IgE Products in accordance with the terms and conditions of this Agreement and solely for use in connection therewith;  
  
 (ii) in Europe such license shall be: (A) Semi-Exclusive with Genentech (and its Affiliates) and Tanox (and its Affiliates) only, as to
Development of Anti-IgE Antibodies and Anti-IgE Products in accordance with the terms and conditions of this Agreement and solely for use in connection therewith; (B) Semi-Exclusive with Genentech (and its Affiliates) only, as to the Manufacture of
Xolair in accordance with Plans approved by the JMC (and solely for use in connection therewith), and Semi-Exclusive with Genentech (and its Affiliates) and Tanox (and its Affiliates) only as to the Manufacture of Anti-IgE Antibodies and Anti-IgE
Products (other than Xolair) in accordance with Plans approved by the JMC (and solely for use in connection therewith); 

  

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and (C) Exclusive to Novartis and its Affiliates (to the exclusion of Genentech) ***** as to Commercialization of Anti-IgE Antibodies and Anti-IgE Products
in accordance with the terms and conditions of this Agreement and solely for use in connection therewith; 
  
 (iii) in East Asia such license shall be: (A) Semi-Exclusive with Genentech (and its Affiliates) only, as to Manufacture of Anti-IgE
Antibodies and Anti-IgE Products in accordance with Plans approved by the JMC (and solely for use in connection therewith); (B) Co-Exclusive to Novartis (and its Affiliates) and Tanox (and its Affiliates) only (to the exclusion of Genentech) with
respect to the Development of Collaboration Products; and (C) Exclusive to Novartis (and its Affiliates) (to the exclusion of Genentech) with respect to the Commercialization of Collaboration Products; and 
  
 (iv) in the Rest of World such license shall be: (A)
Semi-Exclusive with Genentech (and its Affiliates) only, as to Manufacture of Anti-IgE Antibodies and Anti-IgE Products in accordance with Plans approved by the JMC (and solely for use in connection therewith); (B) Exclusive to Novartis (and its
Affiliates) only (to the exclusion of Genentech) with respect to the Development of Collaboration Products; and (C) Exclusive to Novartis and its Affiliates (to the exclusion of Genentech) with respect to the Commercialization of Collaboration
Products. 
  
 (b) As to any Anti-IgE Patents and Company
Information (including, without limitation, Know-How and Biological Materials) Controlled by Genentech which are required for, or to the extent they are used by, Tanox (or its Affiliates) for the Development, Manufacture or Commercialization of
Anti-IgE Antibodies or Anti-IgE Products in accordance with the terms and conditions of this Agreement and/or the Ancillary D&L Agreement (solely with respect to Collaboration Products in East Asia and the ROW), Genentech grants to Tanox and its
Affiliates a license and/or sublicense as applicable, with the following, and only the following, scope of rights as to the following territories (in each case subject to Section 4.2(a) of this Agreement): 
  
 (i) in the United States such license shall: (A) be
Semi-Exclusive with Genentech (and its Affiliates) and Novartis (and its Affiliates) only, as to Development of Anti-IgE Antibodies and Anti-IgE Products in accordance with the terms and conditions of this Agreement and solely for use in connection
therewith; (B) not extend to the Manufacture of Xolair, and shall be Semi-Exclusive with Genentech (and its Affiliates) and Novartis (and its Affiliates) only as to the Manufacture of Anti-IgE Antibodies and Anti-IgE Products (other than Xolair) in
accordance with Plans approved by the JMC (and solely for use in connection therewith); and (C) not extend to the Commercialization of Anti-IgE Antibodies and Anti-IgE Products; 
  
 (ii) in Europe such license shall: (A) be Semi-Exclusive with Genentech (and its Affiliates) and Novartis
(and its Affiliates) only, as to Development of Anti-IgE Antibodies and Anti-IgE Products in accordance with the terms and conditions of this Agreement and solely for use in connection therewith; and (B) not extend to the Manufacture of Xolair, and
shall be Semi-Exclusive with Genentech (and its Affiliates) and Novartis (and its Affiliates) only as to the Manufacture of Anti-IgE Antibodies and Anti-IgE Products (other than Xolair) in accordance with Plans approved by the JMC 

  

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(and solely for use in connection therewith); and (C) not extend to the Commercialization of Anti-IgE Antibodies and Anti-IgE Products; and 
  
 (iii) in East Asia such license shall: (A) be Co-Exclusive
with Novartis and its Affiliates only (to the exclusion of Genentech) with respect to the Development of Collaboration Products; and (B) not extend to the Manufacture or Commercialization of Anti-IgE Antibodies and Anti-IgE Products. 
  
 6.4 License from Novartis to Genentech and Tanox. 
  
 (a) As to any Anti-IgE Patents and Company Information (including, without
limitation, Know-How and Biological Materials) Controlled by Novartis which are required for, or to the extent they are used by, Genentech (or its Affiliates) for the Development, Manufacture or Commercialization of Anti-IgE Antibodies or Anti-IgE
Products in accordance with the terms and conditions of this Agreement and/or the JCA (solely with respect to the United States and Europe), Novartis grants to Genentech and its Affiliates a license and/or sublicense, as applicable, with the
following, and only the following, scope of rights as to the following territories (in each case subject to Section 4.2(a) of this Agreement): 
  
 (i) in the United States such license shall be: (A) Semi-Exclusive with Novartis (and its Affiliates) and Tanox (and its Affiliates) only,
as to Development of Anti-IgE Antibodies and Anti-IgE Products in accordance with the terms and conditions of this Agreement and solely for use in connection therewith; (B) Semi-Exclusive with Novartis (and its Affiliates) only, as to Manufacture of
Xolair in accordance with Plans approved by the JMC (and solely for use in connection therewith), and Semi-Exclusive with Novartis (and its Affiliates) and Tanox (and its Affiliates) as to the Manufacture of Anti-IgE Antibodies and Anti-IgE Products
(other than Xolair) in accordance with Plans approved by the JMC (and solely for use in connection therewith); and (C) Semi-Exclusive with Novartis (and its Affiliates) only, as to the Commercialization of Anti-IgE Antibodies and Anti-IgE Products
in accordance with the terms and conditions of this Agreement and solely for use in connection therewith;  
  
 (ii) in Europe such license shall: (A) be Semi-Exclusive with Novartis (and its Affiliates) and Tanox (and its Affiliates) only, as to
Development of Anti-IgE Antibodies and Anti-IgE Products in accordance with the terms and conditions of this Agreement and solely for use in connection therewith; (B) be Semi-Exclusive with Novartis and its Affiliates only, as to the Manufacture of
Xolair in accordance with Plans approved by the JMC (and solely for use in connection therewith), and Semi-Exclusive with Novartis (and its Affiliates) and Tanox (and its Affiliates) only as to the Manufacture of Anti-IgE Antibodies and Anti-IgE
Products (other than Xolair) in accordance with Plans approved by the JMC (and solely for use in connection therewith); and (C) not extend to the Commercialization of Anti-IgE Antibodies and Anti-IgE Products, ***** and 
  
 (iii) in East Asia and the Rest of World such license shall:
(A) be Semi-Exclusive with Novartis (and its Affiliates) only as to the Manufacture of those Anti-IgE Antibodies and Anti-IgE Products in accordance with Plans approved by the JMC (and 

  

 -36- 

 
solely for use in connection therewith); and (B) not extend to the Development or Commercialization of Anti-IgE Antibodies or Anti-IgE Products. 

 
 (b) As to any Anti-IgE Patents and Company Information (including, without
limitation, Know-How and Biological Materials) Controlled by Novartis which are required for, or to the extent they are used by, Tanox (or its Affiliates) for the Development, Manufacture or Commercialization of Anti-IgE Antibodies or Anti-IgE
Products in accordance with the terms and conditions of this Agreement and/or the Ancillary D&L Agreement (solely with respect to East Asia and the ROW), Novartis grants to Tanox and its Affiliates a license and/or sublicense, as applicable,
with the following, and only the following, scope of rights as to the following territories (in each case subject to Section 4.2(a) of this Agreement): 
  
 (i) in the United States such license shall: (A) be Semi-Exclusive with Genentech (and its Affiliates) and Novartis (and its Affiliates)
only, as to Development of Anti-IgE Antibodies and Anti-IgE Products in accordance with the terms and conditions of this Agreement and solely for use in connection therewith; (B) not extend to the Manufacture of Xolair, and shall be Semi-Exclusive
with Genentech (and its Affiliates) and Novartis (and its Affiliates) only as to the Manufacture of Anti-IgE Antibodies and Anti-IgE Products (other than Xolair) in accordance with Plans approved by the JMC (and solely for use in connection
therewith) and in accordance with Ancillary D&L Agreement (if applicable); and (C) not extend to the Commercialization of Anti-IgE Antibodies and Anti-IgE Products; 
  
 (ii) in Europe such license ***** shall: (A) be Semi-Exclusive with Genentech (and its Affiliates) and
Novartis (and its Affiliates) only, as to Development of Anti-IgE Antibodies and Anti-IgE Products in accordance with the terms and conditions of this Agreement and solely for use in connection therewith; (B) not extend to the Manufacture of Xolair,
and shall be Semi-Exclusive with Genentech (and its Affiliates) and Novartis (and its Affiliates) only as to the Manufacture of Anti-IgE Antibodies and Anti-IgE Products (other than Xolair) in accordance with Plans approved by the JMC (and solely
for use in connection therewith) and in accordance with Ancillary D&L Agreement (if applicable); and (C) shall not extend to the Commercialization of Anti-IgE Antibodies and Anti-IgE Products; and 
  
 (iii) in East Asia such license shall be: (A) Semi-Exclusive
with Novartis and its Affiliates only with respect to the Development of Anti-IgE Antibodies and Anti-IgE Products; and (B) not extend to the Manufacture or Commercialization of Anti-IgE Antibodies and Anti-IgE Products. 
  
 6.5 License from Tanox to Genentech and Novartis. 
  
 (a) As to any Anti-IgE Patents and Company Information (including, without
limitation, Know-How and Biological Materials) Controlled by Tanox which are required for, or to the extent they are used by, Genentech (or its Affiliates) for the Development, Manufacture or Commercialization of Anti-IgE Antibodies or Anti-IgE
Products in accordance with the terms and conditions of this Agreement and/or the JCA (solely with respect to the United States and Europe), Tanox grants to Genentech (and its Affiliates) a license and/or sublicense, as applicable, 

  

 -37- 

 
with the following, and only the following, scope of rights as to the following territories (in each case subject to Section 4.2(a) of this Agreement):

  
 (i) in the United States such license shall
be: (A) Semi-Exclusive with Novartis (and its Affiliates) and Tanox (and its Affiliates) only, as to Development of Anti-IgE Antibodies and Anti-IgE Products in accordance with the terms and conditions of this Agreement and solely for use in
connection therewith; (B) Co-Exclusive to Genentech and Novartis (and its Affiliates) only (to the exclusion of Tanox), as to Manufacture of Xolair in accordance with Plans approved by the JMC (and solely for use in connection therewith), and
Semi-Exclusive with Novartis (and its Affiliates) and Tanox (and its Affiliates) as to the Manufacture of Anti-IgE Antibodies and Anti-IgE Products (other than Xolair) in accordance with Plans approved by the JMC (and solely for use in connection
therewith); and (C) Co-Exclusive to Genentech (and its Affiliates) and Novartis (and its Affiliates) only (to the exclusion of Tanox), as to the Commercialization of Anti-IgE Antibodies and Anti-IgE Products in accordance with the terms and
conditions of this Agreement and solely for use in connection therewith; and 
  
 (ii) in Europe such license shall be: (A) Semi-Exclusive with Novartis (and its Affiliates) and Tanox (and its Affiliates) only, as to Development of Anti-IgE Antibodies and Anti-IgE Products in accordance with the
terms and conditions of this Agreement and solely for use in connection therewith; (B) Co-Exclusive to Genentech (and its Affiliates) and Novartis (and its Affiliates) only (to the exclusion of Tanox) as to the Manufacture of Xolair in accordance
with Plans approved by the JMC (and solely for use in connection therewith), and Semi-Exclusive with Novartis (and its Affiliates) and Tanox (and its Affiliates) only as to the Manufacture of Anti-IgE Antibodies and Anti-IgE Products (other than
Xolair) in accordance with Plans approved by the JMC (and solely for use in connection therewith); and (C) shall not extend to the Commercialization of Anti-IgE Antibodies and Anti-IgE Products *****. 
  
 (b) As to any Anti-IgE Patents and Company Information (including, without
limitation, Know-How and Biological Materials) Controlled by Tanox which are required for, or to the extent they are used by, Novartis or its Affiliates for the Development, Manufacture or Commercialization of Anti-IgE Antibodies or Anti-IgE
Products in accordance with the terms and conditions of this Agreement and/or the JCA (solely with respect to the United States and Europe) and/or the Ancillary D&L Agreement (solely with respect to East Asia and the ROW), Tanox grants to
Novartis and its Affiliates a license and/or sublicense, as applicable, with the following, and only the following, scope of rights as to the following territories (in each case subject to Section 4.2(a) of this Agreement): 
  
 (i) in the United States such license shall be: (A)
Semi-Exclusive with Genentech (and its Affiliates) and Tanox (and its Affiliates) only, as to Development of Anti-IgE Antibodies and Anti-IgE Products in accordance with the terms and conditions of this Agreement and solely for use in connection
therewith; (B) Co-Exclusive with Genentech (and its Affiliates) only (to the exclusion of Tanox) as to Manufacture of Xolair in accordance with Plans approved by the JMC (and solely for use in connection therewith), and Semi-Exclusive with Genentech
(and its Affiliates) and Tanox (and its Affiliates) as to the Manufacture of Anti-IgE Antibodies and Anti-IgE Products (other 

  

 -38- 

 
than Xolair) in accordance with Plans approved by the JMC (and solely for use in connection therewith) and in accordance with Ancillary D&L Agreement (if
applicable); and (C) Co-Exclusive with Genentech (and its Affiliates) only (to the exclusion of Tanox) as to the Commercialization of Anti-IgE Antibodies and Anti-IgE Products in accordance with the terms and conditions of this Agreement and solely
for use in connection therewith; 
  
 (ii) in
Europe such license shall be: (A) Semi-Exclusive with Genentech (and its Affiliates) and Tanox only (and its Affiliates), as to Development of Anti-IgE Antibodies and Anti-IgE Products in accordance with the terms and conditions of this Agreement
and solely for use in connection therewith; (B) Semi-Exclusive with Genentech (and its Affiliates) only, as to the Manufacture of Xolair in accordance with Plans approved by the JMC (and solely for use in connection therewith), and Semi-Exclusive
with Genentech (and its Affiliates) and Tanox (and its Affiliates) only as to the Manufacture of Anti-IgE Antibodies and Anti-IgE Products (other than Xolair) in accordance with Plans approved by the JMC (and solely for use in connection therewith)
and in accordance with Ancillary D&L Agreement (if applicable); and (C) Exclusive to Novartis and its Affiliates (to the exclusion of Tanox) ***** as to the Commercialization of Anti-IgE Antibodies and Anti-IgE Products in accordance with the
terms and conditions of this Agreement and solely for use in connection therewith; 
  
 (iii) in East Asia such license shall be: (A) Semi-Exclusive with Tanox (and its Affiliates) only, as to the Manufacture of Anti-IgE
Antibodies and Anti-IgE Products in accordance with Plans approved by the JMC (and solely for use in connection therewith); and (B) Semi-Exclusive with Tanox (and its Affiliates) only, as to the Development of Anti-IgE Antibodies and Anti-IgE
Products; and (C) Exclusive to Novartis (and its Affiliates) (to the exclusion of Tanox), as to the Commercialization of Anti-IgE Antibodies and Anti-IgE Products; 
  
 (iv) in the Rest of the World, such license shall: (A) be Semi-Exclusive with Tanox (and its Affiliates)
only, as to Manufacture of Anti-IgE Antibodies and Anti-IgE Products in accordance with Plans approved by the JMC (and solely for use in connection therewith); and (B) be Exclusive to Novartis and its Affiliates as to the Development and
Commercialization of Anti-IgE Antibodies and Anti-IgE Products. 
  
 6.6 Use of Know-How. Without limiting the license grants in Article 6 of this Agreement, and notwithstanding the ownership provisions of Section 13.2 of this Agreement, but subject to the rights of co-owners under Section 13.3 and
subject to the applicable provisions of any Technology Transfer Agreement, the Parties acknowledge and agree that: 
  
 (a) all Know-How (excluding any patents (including inventor’s certificates) and patent applications) comprising any data processing, laboratory,
analytical, or manufacturing methods or processes which are Generated by a Party and which are: (i) used by such Party in the Development (including manufacturing development) of any Anti-IgE Antibody or Anti-IgE Product pursuant to this Agreement;
or (ii) otherwise disclosed or required to be disclosed pursuant to Section 4.4 of this Agreement, shall be subject to the license grants set forth in Article 6, but may not otherwise be used by any other Party (other than a joint owner of such

  

 -39- 

 
Know-How, with the rights of joint owners being set forth in Section 13.3) unless otherwise agreed by the Generating Party; 
  
 (b) all Know-How (excluding any patents (including inventor’s
certificates) and patent applications) other than described in paragraph (a) above which is Generated by a Party and which are: (i) used by such Party in the Development of any Anti-IgE Antibody or Anti-IgE Product pursuant to this Agreement; or
(ii) otherwise disclosed or required to be disclosed pursuant to Section 4.4 of this Agreement, shall be subject to the license grants set forth in Article 6. ***** 
  
 *****. 
  
 6.7 Sublicenses. 
  
 (a) Genentech Sublicensing Rights. Genentech shall have the right to grant sublicenses of the license rights granted to it hereunder: 

 
 (i) with respect to the licenses granted by Novartis
hereunder, to a prospective Third Party manufacturer of Anti-IgE Products, which manufacturer requires such rights to fulfill its obligations under a manufacturing and supply arrangement and agreement approved as required under Article 5; and

  
 (ii) only with Tanox’s prior written
consent, with respect to the licenses granted by Tanox hereunder; 
  
 provided, however, that in each case Genentech shall have the right to grant sublicenses to its Affiliates *****. 
  
 (b) Novartis Sublicensing Rights. Novartis shall have the right to grant sublicenses of the license rights granted to it: 
  
 (i) with respect to the licenses granted by Genentech
hereunder: (A) to a prospective Third Party manufacturer of Anti-IgE Products, which manufacturer requires such rights to fulfill its obligations under a manufacturing and supply arrangement and agreement approved as required under Article 5; and
(B) to a Third Party in connection with the Development or Commercialization of Anti-IgE Products in Europe (subject to Section 5.5(e)(ii) of this Agreement and subject to Section 9.2 of the JCA), East Asia or the Rest of World; and 
  
 (ii) with respect to the licenses granted by Tanox
hereunder, solely for purposes of and in connection with exercising its rights or performing its obligations under this Agreement and the Ancillary D&L Agreement; 
  
 provided, however, that in each case Novartis shall have the right to grant sublicenses to its Affiliates.

  
 (c) Tanox Sublicensing Rights. Tanox shall have the
right to grant sublicenses of the license rights granted to it hereunder to its Affiliates, but shall not grant any 

  

 -40- 

 
sublicenses to Third Parties without Genentech’s or Novartis’ prior written consent, as the case may be, except that Tanox shall have the right to
grant sublicenses of the license rights granted to it by Novartis hereunder (with Novartis’ prior written consent, such consent not to be unreasonably withheld) solely for purposes of and in connection with exercising its rights or performing
its obligations under Sections 5.2 and 8.2 of the Ancillary D&L Agreement. 
  
 (d) Sublicense Agreements. Any sublicense agreement under this Section 6.7 shall be in writing and shall contain terms and conditions that are consistent with, and subject to the applicable provisions of, this
Agreement, including, but not limited to, the definition of Anti-IgE Antibodies, Anti-IgE Products and Net Sales, the confidentiality provisions, the governance provisions, the maintenance of books and records and the audit rights. All payments to
any Party hereunder shall continue to be the obligation of the Party granting the sublicense under this Section. Any sublicense under this Section 6.7 shall not affect the calculation of royalties or sharing of Net Profits hereunder. Accordingly,
the applicable sublicensee shall be treated as if standing in the shoes of the sublicensor with respect to such calculations and, for example, (i) Net Sales of such sublicensee shall give rise to the same royalties as if such Net Sales were
generated by the sublicensor, (ii) royalties or other consideration paid by sublicensee to sublicensor shall not be included in sublicensee’s costs for purposes of calculating Net Profits of sublicensee and (iii) sublicensor shall not be
entitled to profit share payments under this Agreement attributable to the sublicensed rights. 
  
 6.8 Third Party Rights. 
  
 (a) The Parties agree to cooperate in determining the necessity and availability of licenses to any Required Third Party Rights (including through extension of existing licenses). Without limiting the foregoing, any Party which believes
that a license is required under any Required Third Party Rights (including through extension of existing licenses) shall provide notice thereof to the JMC. The 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 JMC; provided, however, that if a
license is negotiated to cover both Anti-IgE Products and 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
JMC. 
  
 (b) Subject to the terms and conditions herein, any Party
designated by the JMC to obtain a license to Third Party Rights shall use reasonably diligent efforts to do so in accordance with 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 JMC in so far as such terms and conditions relate to Anti-IgE Antibodies or Anti-IgE Products (and the JMC shall give reasonable consideration to any request by Novartis or Tanox to obtain worldwide rights),
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 this Article 6, ***** 
  
 (c) ***** 
  

 -41- 

 (d) ***** 
  

6.9 No Limitation on Licenses. For the avoidance of doubt, the rights and licenses granted in the JCA (whether Exclusive, Semi-Exclusive,
Co-Exclusive or otherwise) will not limit any rights or licenses expressly granted to Tanox hereunder. For the avoidance of doubt, the rights and licenses granted under the D&L Agreements (whether Exclusive, Semi-Exclusive, Co-Exclusive or
otherwise) will not limit any rights or licenses expressly granted to Genentech hereunder. For the avoidance of doubt, the rights and licenses granted in the Cross-License Agreement (whether Exclusive, Semi-Exclusive, Co-Exclusive or otherwise) will
not limit any rights or licenses expressly granted to Novartis hereunder. 
  
 6.10 Additional Licenses to Tanox. To the extent Tanox is requested by Genentech and/or Novartis or the relevant Committee to undertake (and Tanox agrees to undertake as provided hereunder) Development and/or
Manufacturing obligations with respect to Anti-IgE Antibodies or Anti-IgE Products hereunder or under the Ancillary D&L Agreement, and a license ***** under any rights licensed by Novartis or Genentech hereunder (which are not already licensed
to Tanox under this Article 6) would be reasonably required for Tanox to undertake such obligations without infringement of such rights, Genentech and/or Novartis, as applicable, shall promptly grant Tanox a license and/or sublicense to such rights
for the performance of such Development and/or Manufacturing obligations without royalties payable to Novartis or Genentech (but subject to any Third Party royalty obligations, as set forth in the Financial Appendix). Notwithstanding the foregoing,
Genentech shall have no obligation to grant rights related to the Manufacture of any Anti-IgE Antibody or Anti-IgE Product by Tanox in East Asia or Rest of World (as opposed to Manufacture in Europe or the US of Anti-IgE Antibodies and Anti-IgE
Products for sale in East Asia or the ROW). 
  
 6.11 No Implied
License. Except as expressly provided in this Agreement, the Ancillary Agreements or the Related Agreements, no rights, licenses, title or interests, implied or otherwise, in, to or under any patents, 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 7 
  
 DEVELOPMENT 
  
 7.1 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 (including manufacturing development) throughout the world, and
may be Developed for the United States and Europe solely pursuant to this Agreement. As set forth in Article 5, the Parties acknowledge and agree that, subject to Section 4.1 of this Agreement, all decisions with respect to the selection of Anti-IgE
Antibodies and Anti-IgE Products for Development for and Commercialization in the United States and Europe, and the selection of indications for which particular Anti-IgE Antibodies and Anti-IgE Products shall be Developed for and Commercialized in
the United States and Europe, shall be made through the Committees described in this Agreement. Notwithstanding the Parties’ obligations to use Commercially Reasonable Efforts as set forth in Section 4.1, the Parties acknowledge and agree that:

  
 (a) ***** 
  

 -42- 

 (b) ***** 
  
 (i) ***** 
  
 (ii) ***** 
  
 ***** 
  
 (c) ***** 
  
 ***** 
  
 7.2 Development for Europe and the US. 
  
 (a) Novartis and Genentech (and Tanox, if requested by the JMC and agreed by Tanox, such agreement not to be unreasonably withheld) shall be responsible
for, and shall use Commercially Reasonable Efforts to undertake, such Development (including manufacturing development) activities for the United States and Europe relating to Anti-IgE Antibodies or Anti-IgE Products as are agreed by the JMC, at the
direction of and under the oversight of the JMC and in accordance with applicable Plans. ***** Subject to Section 7.1, the Parties shall use Commercially Reasonable Efforts in the Development (including manufacturing development) of: (i) Anti-IgE
Antibodies and Anti-IgE Products in addition to Xolair for the US and/or Europe; and (ii) additional indications for existing Anti-IgE Products for which Approval has been obtained in the US and/or Europe, which in each case are agreed by the JMC.
Development activities (including manufacturing development) with respect to any Anti-IgE Antibody or Anti-IgE Product for Commercialization in Europe or the US shall be subject to review and approval by the JMC as set forth in Article 5 above, and
protocols for Clinical Trials and other studies with respect to any Anti-IgE Antibody or Anti-IgE Product for Commercialization in Europe or the US shall be subject to review and approval by the E/US DSC and the JMC. Subject to the foregoing, each
Party’s responsibilities with respect to such Development (including manufacturing development) of any Anti-IgE Antibody or Anti-IgE Product for Commercialization in Europe and/or the US, and Plans relating thereto, will be determined by the
JMC. 
  
 (b) Subject to the terms of this Agreement, Genentech, as
official holder of the Approvals for Anti-IgE Products in the United States, will have primary responsibility for planning and conducting, with input from and consultation with Novartis and 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 the United States. The USBT shall decide, subject to JCC 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). As set forth in Article 5 of this Agreement, the JMC will determine which of Genentech, Novartis (or its Affiliate designee) or Tanox (if Tanox so
agrees, such agreement not to be unreasonably withheld) shall have the 

  

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primary responsibility for planning and conducting all other clinical trials of Anti-IgE Products in the US. 
  
 (c) Subject to the terms of this Agreement, Novartis, as official holder of
the Approvals for Anti-IgE Products in Europe, will have primary responsibility for planning and conducting, with input from and consultation with Tanox and Genentech, all Phase IV clinical trials of Anti-IgE Products in Europe, provided that Tanox
has the right to provide such input and consultation only with respect to 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 or Pricing Approval. Subject to the other terms of this Agreement, including, without limitation, Section 9.5 hereof and Section 8.3 of the JCA, the JMC will determine which of Genentech, Novartis (or its Affiliate
designee) or Tanox (if Tanox so agrees, not to be unreasonably withheld) shall have the primary responsibility for planning and conducting all other clinical trials of Anti-IgE Products in Europe. 
  
 (d) Genentech and Novartis shall bear all Development Costs incurred for
Anti-IgE Antibodies and Anti-IgE Products for Europe and the US based on the sharing ratios set forth in the JCA *****. To the extent Tanox carries out any Development (including manufacturing development) activities in accordance with this
Agreement, it shall be reimbursed for Development Costs incurred in accordance with Plans approved by the JMC associated with such Development (including manufacturing development) activities as set forth in the final sentence of Section 11.6(a).

  
 7.3 Development for East Asia and ROW. Genentech shall
have no rights or obligations with respect to the Development (including manufacturing development) of Anti-IgE Antibodies or Anti-IgE Products for Commercialization in East Asia and ROW other than as expressly set forth in this Agreement. Rights
and responsibilities with respect to Development (including manufacturing development) of Anti-IgE Antibodies and Anti-IgE Products for Commercialization in East Asia and ROW, and the obligations for bearing the related costs, shall be as set forth
in the Ancillary D&L Agreement, subject to Section 4.2(a) of this Agreement and any applicable Manufacturing and Supply Plan. *****  
  
 ARTICLE 8 
  
 REGULATORY ACTIVITIES 
  
 8.1 Regulatory Development of Anti-IgE Products Generally. Subject to Sections 8.2 and 8.3 below, each Party’s responsibilities with respect to regulatory Development activities regarding Anti-IgE Products
in the United States and Europe, and Plans relating thereto, will be as determined by the JMC (subject to Tanox agreement to any such activities to be undertaken by Tanox, such agreement not to be unreasonably withheld). 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 the United States and Europe and all such activities shall be conducted in accordance with
applicable Plan(s) approved by the JMC. 
  

 -44- 

 8.2 Regulatory Development Activities in the US. 
  
 (a) Approvals for Anti-IgE Products in the United States. Genentech
shall, with input from the other Parties or their designees, 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 the FDA or any other relevant Public Authority for Commercializing Anti-IgE Products in the United States. Unless otherwise required by Legal Requirements, Genentech will be exclusively responsible for complying with all regulatory
requirements and maintaining all government agency contacts relating to Anti-IgE Products (including, without limitation, Xolair and Hu-901) in the United States. 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 JCC and JMC), the reporting of any adverse incidents or drug reactions to the FDA, and the filing with the FDA of any Promotional Material and other
materials as may be necessary to comply with Legal Requirements. Each of Novartis and Tanox agrees that it shall (and agrees to use commercially reasonable efforts to cause its Affiliates to): (I) cooperate with Genentech to obtain and maintain the
effectiveness of any Approvals for Anti-IgE Products in United States and any licenses, permits, approvals or registrations obtained in the United States in connection with the performance of this Agreement, including by providing materials, Company
Information and necessary personnel in connection with regulatory approval functions; and (II) act in accordance with the provisions and specifications of the Safety Addendum in reporting, without delay, to Genentech adverse events or drug reactions
it becomes aware of to permit Genentech to meet its FDA reporting obligations. Genentech will hold Approvals for Anti-IgE Products in United States, subject to: 
  
 (i) providing each of Novartis and Tanox, or its designee, promptly on Genentech’s receipt thereof,
with copies of all material Anti-IgE Products licensing/regulatory affairs correspondence and materials; 
  
 (ii) promptly notifying each of Novartis and Tanox or its designee of any meetings or material communications between Genentech and the
FDA; 
  
 (iii) the right of Novartis or its
designee to attend and participate in such meetings and to review, comment upon and approve all such written communications including, without limitation, draft documents, meeting materials, letters and submissions to the FDA; and 
  
 (iv) the right of Tanox to have one representative observe
and, at Genentech’s discretion, participate in FDA meetings and to receive material Genentech and FDA documentation of FDA meetings, 
  
 ***** 
  
 (b) Anti-IgE Product Recalls in the United States. Novartis and Genentech 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 United States. Notwithstanding anything herein to the contrary, if Genentech or Novartis (or Novartis’ Affiliate) deems it necessary to initiate a recall, safety notification or similar activity (collectively
“recall”) of an Anti-IgE Product in the United States, it shall notify the USBT, the JCC and the other Parties using 

  

 -45- 

 
reasonable notice under the circumstances of such intended recall and allow appropriate time, to the extent practicable and subject to the following
sentence, for Genentech 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 of Genentech and Novartis; 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 Genentech and Novartis 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 of Genentech and Novartis. As the Party that is the Approval holder in the United States,
Genentech shall be responsible for the recall of the Anti-IgE Product *****. No other Party shall take any action contrary to the recall and each of the other Parties shall reasonably cooperate such that it does not hinder the activities of
Genentech in initiating the recall. 
  
 8.3 Regulatory
Development Activities in Europe. 
  
 (a) Approvals and
Pricing Approvals for Anti-IgE Products in Europe. Novartis or one or more Novartis-designated Affiliates shall, with input from the other Parties or their designees, be solely responsible for and shall use Commercially Reasonable Efforts to
apply for, obtain and maintain any Approvals and Pricing Approvals and any other licenses, permits, approvals or registrations required by any relevant Public Authority for Manufacturing or Commercializing Anti-IgE Products in Europe. 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 (including, without
limitation, Xolair and Hu-901) in Europe. Such activities shall include maintaining and updating any Approvals and Pricing Approvals, developing and submitting Approval Applications and applications for Pricing Approvals for new indications (if any,
and after approval by the JCC and JMC), reporting of any adverse incidents or drug reactions to the Public Authority in any Regulatory Jurisdiction in Europe and filing with the appropriate Public Authority in a Regulatory Jurisdiction in Europe 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) and Pricing Approvals for Anti-IgE Products (including,
without limitation, Xolair, Hu-901 and *****). Each of Genentech and Tanox agrees that it shall (I) cooperate with Novartis, or its designee, to obtain and maintain the effectiveness of any Approvals and Pricing Approvals for Anti-IgE Products in
Europe and any licenses, permits, approvals or registrations obtained in Europe in connection with the performance of this Agreement, including by providing materials, Company Information and necessary personnel in connection with regulatory
approval functions and (II) act in accordance with the provisions and specifications of the Safety Addendum in reporting, without delay, to Novartis, or its designee, adverse events or drug reactions it becomes aware of to permit Novartis, or its
designee, to meet its Public Authority reporting obligations in Europe. Novartis shall promptly notify Genentech and Tanox or their respective designees of any meetings or communications between Novartis and any Public Authority of a Regulatory
Jurisdiction in Europe, and Genentech 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, 

  

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however that Novartis’ obligations in this respect shall only extend to material activities in which Novartis, as opposed to a Novartis
Affiliate, has become directly involved. 
  
 (b) Anti-IgE
Product Recall in Europe. 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 Europe. Notwithstanding anything herein to the contrary, if
Novartis deems it necessary to initiate a recall (as defined in Section 8.2(b) above) of an Anti-IgE Product in Europe, it shall notify the EBT, the JCC and the other Parties 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 Genentech 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 or by the Senior Officers of Genentech and Novartis; 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 Genentech and Novartis 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 of
Genentech and Novartis. As the Party that is the Approval holder in Europe, Novartis shall be responsible for the recall of the Anti-IgE Product ***** 
  
 8.4 Regulatory Development Activities in East Asia and ROW. Rights and responsibilities with respect to regulatory Development activities required
to obtain Approval of Anti-IgE Products in East Asia and ROW, and the obligations for bearing the related costs, shall be as set forth in the Ancillary D&L Agreement, subject to Section 4.2(a) of this Agreement. For clarity, other than as set
forth in Section 6.2 of the JCA and as described in Section 7.3 of this Agreement, Genentech shall not have any obligation under the provisions of the Ancillary D&L Agreement. 
  
 8.5 Regulatory Development Information Sharing and Safety Management. 
  
 (a) Without limiting Section 4.4 above, the Parties acknowledge and agree
that all Approval Applications and correspondence with any Public Authority with respect to any Approval or Approval Application for any Anti-IgE Antibody or Anti-IgE Product (including, without limitation, supporting information and information
with respect to any Clinical Trials with respect to any Anti-IgE Antibody or Anti-IgE Product referred to in any such Approval or Approval Application) shall be available to the Parties *****. 
  
 (b) Such of the Parties as are from time to time conducting clinical
Development activities or Commercialization activities with respect to any Anti-IgE Antibody or Anti-IgE Product anywhere in the world shall establish and implement a procedure for the mutual exchange of adverse event reports and safety information
associated with Anti-IgE 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
relevant respective 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 relevant Parties in writing from time to time
and expanded as needed to permit compliance with new Legal Requirements. Notwithstanding the foregoing and any provision of this Agreement limiting Genentech’s rights with respect to East Asia or the  

  

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ROW, during the Term of this Agreement, each Party shall notify the other Parties and the JCC 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 Anti-IgE Product. Upon receipt of any such information, the Parties shall discuss such information and possible
actions with respect thereto, and the JCC shall determine a procedure for taking appropriate action in the US and Europe. In the event that no agreement as to appropriate action is reached by the JCC, the Approval holder for a particular Anti-IgE
Product in a particular country or Regulatory Jurisdiction shall have the sole right and responsibility for communicating and reporting adverse experiences to health authorities in such jurisdiction. Each Party shall provide to the other Parties
copies of any periodical safety update reports issued by such Party with respect to any Anti-IgE Product or Anti-IgE Antibody. 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.  
  
 ARTICLE 9 
  
 COMMERCIALIZATION 
  
 9.1 Commercialization in the United States. 
  
 (a) Xolair, together with any other Anti-IgE Antibody or Anti-IgE Product selected by the Parties for Development hereunder and Approved for marketing in
the United States, shall be Commercialized in the United States by Novartis and Genentech in accordance with the JCA and applicable Plans thereunder, and Novartis and Genentech shall use Commercially Reasonable Efforts to Commercialize such Anti-IgE
Products. In lieu of Tanox’s right under Sections 8.2 and 8.3 of the Original D&L Agreement to participate in the co-promotion of Anti-IgE Antibodies and Anti-IgE Products in the United States, Tanox will be entitled to the payments set
forth in Section 11.1 below. 
  
 (b) All Commercialization Costs
for Anti-IgE Products for the United States shall be shared between Genentech and Novartis, as more specifically set forth in the Financial Appendix and the JCA. 
  
 (c) Subject to Section 11.1(c), all Net Profits and Net Losses from the sale of Anti-IgE Products in the United States shall
be shared between Novartis and Genentech, as more specifically set forth in the Financial Appendix and the JCA. 
  
 9.2 Commercialization in Europe. 
  
 (a) *****, any Anti-IgE Antibody or Anti-IgE Product selected by the Parties for Development hereunder and Approved for marketing in Europe, shall be
Commercialized in Europe exclusively by Novartis, as set forth in the JCA. Novartis shall use Commercially Reasonable Efforts to Commercialize Xolair in Europe. Novartis *****, shall use Commercially Reasonable Efforts to Commercialize in Europe any
other Anti-IgE Product which is selected by the Parties for Development hereunder and Approved for marketing in Europe. As set forth in 

  

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Section 8.3(a) *****, Novartis shall be solely responsible for applying for, obtaining and maintaining Pricing Approvals in Europe. 
  
 (b) All Commercialization Costs for Anti-IgE Products for Europe shall be
shared between Genentech and Novartis, as more specifically set forth in the Financial Appendix and the JCA *****. 
  
 (c) All Net Profits and Net Losses from the sale of Anti-IgE Products in Europe shall be shared between Genentech and Novartis, as more specifically set
forth in the Financial Appendix and the JCA *****. 
  
 9.3
Commercially Reasonable Efforts.***** 
  
 9.4
Commercialization in East Asia and ROW. Xolair and any other Anti-IgE Antibody or Anti-IgE Product Approved for marketing in the applicable Regulatory Jurisdiction shall be Commercialized in East Asia by Novartis (and its Affiliates) with the
cooperation of Tanox (and the related costs and net profits shared by Novartis and Tanox) and in ROW by Novartis (and its Affiliates), each as set forth in the Ancillary D&L Agreement, and Genentech shall have no rights or obligations with
respect to the Commercialization of any Anti-IgE Antibody or Anti-IgE Product in East Asia or ROW. 
  
 9.5 ********** 
  
 ARTICLE 10 
  
 MANUFACTURING AND SUPPLY 
  
 10.1 Manufacturing
of Anti-IgE Antibodies and Anti-IgE Products. 
  
 (a) Novartis
and Genentech, and Tanox to the extent Tanox is Manufacturing any Anti-IgE Antibody or Anti-IgE Product pursuant to Section 10.4, shall use Commercially Reasonable Efforts, through the mechanisms set forth in this Agreement and any Manufacturing and
Supply Agreement(s), to ensure that an adequate supply of Anti-IgE Products (both Clinical Requirements and Commercial Requirements) being Developed and/or Commercialized in the United States and Europe under this Agreement is available to be
used/marketed in the United States, Europe, and, with respect to the same Filled Product form, in East Asia and the Rest of World, under the Worldwide Manufacturing and Supply Plan approved by the JCC and the JMC (as provided in Article 5 above).
The Parties’ specific obligations and responsibilities with respect to Manufacture and supply of Clinical Requirements and Commercial Requirements of Anti-IgE Product shall be as set forth in this Article 10, the Manufacturing and Supply
Agreements, 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) and, as between Novartis and Genentech only, the terms of the JCA (including without limitation, provisions of the Original JCA which, by the terms of the JCA, survive). The
Parties’ respective performance under any approved Worldwide Manufacturing and Supply Plan pursuant to the Manufacturing and Supply Agreements shall be coordinated by the Manufacturing and Logistics Sub-Committee, subject to the oversight,

  

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approval and dispute resolution activities of the JCC, JMC and Senior Officers, all to the extent provided in Article 5 above. If any Party desires to enter
into an agreement with a Third Party pursuant to which such Third Party shall undertake, in whole or in part, any Manufacture and supply obligations of such Party hereunder, the arrangement itself and the contract with such Third Party shall be
approved as provided in Article 5 above. 
  
 (b) *****.

  
 10.2 Release of Tanox Rights and Obligations to
Manufacture. In consideration of the payments set forth in Section 11.6(b), Tanox hereby waives any and all rights it may have as of the Effective Date, and Novartis and Genentech hereby release Tanox from any and all obligations it may have as
of the Effective Date, to Manufacture or supply Anti-IgE Antibodies and Anti-IgE Products, pursuant to the Original D&L Agreement (including, without limitation, the Supplemental Agreement), the Outline of Terms (as it existed prior to the
Effective Date) or any other agreement between any of the Parties existing as of the Effective Date, except as set forth in Section 10.4 of this Agreement. Tanox hereby acknowledges that the payments due to it under Section 11.6(b) of this Agreement
shall be in lieu of, and shall be in full satisfaction of, any and all claims Tanox may have with respect thereto, except as set forth in Section 10.4 of this Agreement. 
  
 10.3 Manufacturing of Xolair. Novartis (and its Affiliates) and Genentech shall together have the exclusive right and
obligation to Manufacture and supply the Worldwide requirements for Xolair, in accordance with approved Plans as reasonably determined by the MLSC, at: (A) *****; and (B) *****, all as more fully provided in the Financial Appendix, the JCA and the
Manufacturing and Supply Agreement. 
  
 10.4 Other Anti-IgE
Products. 
  
 (a) The Novartis and Genentech members of the
JMC shall determine which Party or Parties should have the right to Manufacture and supply any Anti-IgE Antibody or Anti-IgE Product that is Developed and/or Commercialized in the US or Europe hereunder (other than Xolair, the Manufacture and supply
of which is dealt with in Section 10.3) in the same Filled Product form as that required for Development or Commercialization in the US or Europe under this Agreement; provided, however, that, subject to the Commercially Reasonable
Efforts obligation of Genentech and Novartis in the first sentence of Section 10.1 hereto, no Party should be required to accept those rights or undertake the associated obligations to Manufacture and supply such Anti-IgE Antibody and/or Anti-IgE
Products, including technology transfer, without its consent. If a Party refuses to Manufacture a particular Anti-IgE Antibody or Anti-IgE Product hereunder, it will reasonably assist other Parties who are Manufacturing or intending to Manufacture
such Anti-IgE Antibody or Anti-IgE Product, including by providing reasonable transfer of technology used by such Party for the Manufacture of such Anti-IgE Product (if any) under an appropriate Technology Transfer Agreement (except for products not
Developed and/or Commercialized under this Agreement in the United States and/or Europe). The JMC shall take into account the Manufacturing capabilities and capacity of the Parties in making its Manufacturing decision as well as the projected costs
of goods from such Manufacturing. Unless all of the Parties otherwise agree, Tanox will not Manufacture any Anti-IgE Antibody or Anti-IgE Product hereunder and, in lieu thereof, will receive the Manufacturing payments on 

  

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production of such Anti-IgE Antibody or Anti-IgE Products as set forth under Section 11.6(b). Manufacturing of Anti-IgE Products for sale in East Asia and/or
ROW which constitute Collaboration Products that are different from any Anti-IgE Products Developed or Commercialized in the United States or Europe hereunder shall be conducted by Novartis and/or Tanox as provided for, and in accordance with, the
Ancillary D&L Agreement and the Manufacturing and Supply Plan for such Anti-IgE Product. 
  
 (b) The Party or Parties with the right and obligation to Manufacture and supply each Anti-IgE Antibody or Anti-IgE Product other than Xolair (as set forth in Section 10.4(a) above) shall Manufacture and supply the
Worldwide requirements for such Anti-IgE Antibody or Anti-IgE Product, in accordance with approved Plans as reasonably determined by the MLSC, at: (A) *****; and (B) *****, all as more fully provided in the Financial Appendix, the JCA and the
Manufacturing and Supply Agreement. 
  
 10.5 Commercially
Reasonable Efforts. To the extent that it is Manufacturing any Anti-IgE Product as provided in this Article 10, each Party shall *****. 
  
 10.6 Allocation of Anti-IgE Products Supply. The Novartis and Genentech members of the JMC shall have the responsibility and authority to allocate
available supplies of Anti-IgE Products between different markets on a global basis consistent with the following principles, it being agreed that any deviation from the following principles shall require a unanimous vote of Novartis and Genentech
at the JMC: 
  
 (a) In the event demand for a particular Anti-IgE
Product exceeds available supply, the JMC shall allocate the available supply of such Anti-IgE Product *****; 
  
 (b) Prior to Commercial Launch of a particular Anti-IgE Product in the United States, Switzerland and a second country in Europe, the JMC shall allocate
supplies of Clinical Requirements of such Anti-IgE Product between *****; 
  
 (c) If demand for a particular Anti-IgE Product exceeds supply at any time before Commercial Launch of such Anti-IgE Product in the United States, Switzerland and a second country in Europe, the Parties agree that
during such time period, the supply of Clinical Requirements and Commercial Requirements for such Anti-IgE Product *****; 
  
 (d) At any time after the Commercial Launch of a particular Anti-IgE Product in the United States, Switzerland and a second country in Europe, subject to
Section 10.6(f) below, the Parties agree that supply *****; 
  
 (e) If for any reason the JMC is unable to agree on a ***** with respect to a particular territory, ***** for such territory will be reasonably determined by mutual agreement of the Novartis and Genentech Senior Officers; and 
  
 (f) As a general principle, the Parties agree that supply of Commercial
Requirements shall take precedence over supply of Clinical Requirements, except as otherwise approved by the JMC, so that patients in those territories where an Anti-IgE Product has been Commercially Launched can continue to be treated with the
Anti-IgE Product, provided that 

  

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once an Anti-IgE Product has been Commercially Launched as provided in Section 10.6(d) above, the principles set forth therein shall also apply. 

 
 ARTICLE 11 
  
 PAYMENTS 
  
 11.1 Sales of Anti-IgE Products in the US. In consideration of the rights and licenses granted by Tanox hereunder and under the Original D&L
Agreement, and in lieu of Tanox’s participation in the commercialization of Anti-IgE Products and Anti-IgE Antibodies in the US under the Original D&L Agreement: 
  
 (a) For the applicable Royalty Period and subject to Section 11.5, on an Anti-IgE Product-by-Anti-IgE Product basis Novartis
and Genentech shall pay Tanox, in the aggregate, a royalty equal to ***** of Net Sales (U.S.) of any Anti-IgE Products, the manufacture, importation, use or sale of which in the US would infringe a Valid Claim of a Tanox Anti-IgE Patent in the US
absent a license (with it being understood that any Net Sales (U.S.) of an Anti-IgE Antibody shall be deemed Net Sales (U.S.) of an Anti-IgE Product for purposes of this Article 11), which payment shall be reduced to an aggregate royalty to Tanox of
***** of Net Sales (U.S.) of any Anti-IgE Products, the manufacture, use or sale of which would not infringe a Valid Claim of a Tanox Anti-IgE Patent in the US absent a license during the Royalty Period; 
  
 (b) Subject to the last sentence of Section 8 of the Cross-License Agreement,
Genentech shall pay Tanox an additional royalty equal to ***** of Net Sales (U.S.)***** of Anti-IgE Products in the U.S.; and 
  
 (c) Subject to Section 9.4(b) of the Ancillary D&L Agreement, Novartis shall also pay Tanox *****. 
  
 11.2 Sales of Anti-IgE Products in Europe. 
  
 (a) In consideration of the rights and licenses granted by Tanox hereunder,
for all Patent Protected Countries in Europe (aggregated together), for the applicable Royalty Period with respect to each such country and subject to Section 11.5, on an Anti-IgE Product-by-Anti-IgE Product basis, Genentech and Novartis shall pay
Tanox, in the aggregate, the following royalties with respect to Net Sales (EUR) of each Anti-IgE Product: 
  
 (i) *****of Net Sales (EUR), on that portion of the aggregate Net Sales (EUR) 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 Europe for such Anti-IgE Product would infringe (absent a license) a Valid Claim of a Tanox Anti-IgE Patent in such Patent Protected
Country; 
  
 (ii) ***** of Net Sales (EUR), on
that portion of the aggregate Net Sales (EUR) 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
Europe for such Anti-IgE Product would infringe (absent a 

  

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license) a Valid Claim of a Tanox Anti-IgE Patent in such Patent Protected Country; and 
  
 (iii) ***** of Net Sales (EUR), on that portion of the aggregate Net Sales (EUR) in that calendar year which
is greater than ***** of all units of such Anti-IgE Product, the manufacture, importation, use or sale of which in a Patent Protected Country in Europe for such Anti-IgE Product would infringe (absent a license) a Valid Claim of a Tanox Anti-IgE
Patent in such Patent Protected Country. 
  
 (b) In further
consideration of the rights and licenses granted by Tanox hereunder and under the Original D&L Agreement, for all Net Sales (EUR) of Anti-IgE Products which are not included within Section 11.2(a) above, Genentech and Novartis shall pay Tanox,
in the aggregate, a royalty of ***** of Net Sales (EUR) of such Anti-IgE Product for the applicable Royalty Period and subject to Section 11.5. 
  
 11.3 Sales of Anti-IgE Products in East Asia and the Rest of World. The rights and obligations of Novartis and Tanox with respect to sales of
Anti-IgE Products and Anti-IgE Antibodies in East Asia and the Rest of World (and payments due to Novartis and Tanox with respect thereto) shall be as set forth in the Ancillary D&L Agreement. Genentech shall have no right under this Agreement
or any Ancillary Agreement or Related Agreement to any payment or obligations with respect to sales of Anti-IgE Products and Anti-IgE Antibodies in East Asia or the Rest of World, except as expressly set forth in Sections 6.8, 7.3, 10, and 18 of
this Agreement and Section 6.2 of the JCA. 
  
 11.4 Milestone
Payments. Novartis and Genentech shall, in the aggregate, pay to Tanox the following milestone payments with respect to each Anti-IgE Product and/or Anti-IgE Antibody Developed for and/or Commercialized in the United States and/or Europe under
this Agreement (other than Xolair), regardless of the Party originating the applicable Anti-IgE Antibody or Anti-IgE Product (other than as expressly set forth below with respect to milestones 1 and 2): 
  
 1. ***** 
  
 2. ***** 
  
 3. ***** 
  
 4. ***** 
  
 5. ***** 
  
 6. ***** 
  
 7. ***** 
  
 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 for the US or Europe *****. All of the foregoing
milestones shall be included in Tanox Costs and Expenses to be shared by Novartis and Genentech pursuant to the Financial Appendix and the JCA. 
  

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 11.5 Credit for Milestone Payments. 
  
 (a) Novartis and Genentech shall be entitled to a credit against up ***** of the total amount of each royalty payment under
Section 11.1(a) and Section 11.2 until such time as the cumulative credits received under this Section 11.5(a) equal ***** of the amount of creditable milestones paid prior to the Effective Date. 
  
 (b) In the event that Novartis and Genentech pay Tanox milestones 6 and 7
under Section 11.4 hereof with respect to a given Anti-IgE Antibody, then Novartis and Genentech shall be entitled to a credit against up to ***** of the total amount of each royalty payment under Section 11.1(a) and Section 11.2 for such Anti-IgE
Antibody until such time as the cumulative credits received under this Section 11.5(b) equal ***** of the amount of creditable milestones paid in relation to such Anti-IgE Antibody pursuant to Section 11.4. 
  
 11.6 Development and Manufacturing Compensation Payments. 

 
 (a) As reimbursement for a portion of Tanox’s development costs with
respect to Hu-901 and the data arising therefrom, Novartis and Genentech shall pay Tanox, in the aggregate, $6.6 million due on the Effective Date and payable within thirty (30) days thereafter. Genentech and Novartis shall share equally these costs
and Tanox shall issue two invoices, for $3.3 million each, to each of Genentech and Novartis for such costs. Genentech and Novartis shall reimburse Tanox for any Development Costs incurred in accordance with this Agreement within ***** after the end
of each calendar quarter in which such Development Costs were incurred. 
  
 (b) *****, Novartis and Genentech shall pay Tanox, in the aggregate, for each calendar quarter and for each Anti-IgE Product not Manufactured by Tanox (on an Anti-IgE Product-by-Anti-IgE Product basis), commencing on the earlier to occur of
the ***** and *****, an amount equal to: 
  
 Amount payable = ***** 
  
 Where: 
  
 ***** 
  
 *****. 
  
 The sum of the Manufacturing payments to Tanox above for each Anti-IgE Product will be capped at ***** per calendar year. For the avoidance of doubt, in
each applicable year, payments under this Section 11.6(b) with respect to a given Anti-IgE Product shall continue to be made quarterly in the stated amounts until the aggregate annual ***** ceiling is reached, if ever, for such year with respect to
such Anti-IgE Product. 
  
 *****. 
  

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 The allocation between Genentech and Novartis of payments made under this Section 11.6(b) shall be as set
forth in Section 8 of the Financial Appendix. 
  
 In the event
that Bulk Product is produced in a different form than the ***** being Manufactured and Commercialized as at the Effective Date, the Parties shall calculate an appropriate conversion of such differently formulated Bulk Product into “grams of
Bulk Product” based on the amount of active ingredient within such differently formulated product. 
  
 11.7 No Other Payments. Except as otherwise expressly set forth in this Agreement and any Ancillary Agreements or Related Agreements or any future
agreements which may be entered into by the Parties, 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 for and Commercializing any Anti-IgE Antibodies or Anti-IgE Products. 
  
 11.8 Reports. The Parties will provide to each other the reports set forth in the Financial Appendix. 
  
 11.9 Books. Each Party shall maintain, and shall cause its Affiliates
and sublicensees to maintain, complete and accurate books and records in connection with its Development, Manufacture and Commercialization of Anti-IgE Antibodies and Anti-IgE Products, in any event, in 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 12 of this Agreement, such Party, Affiliate or sublicensee shall keep the records until the Dispute is resolved. Each Party
shall ensure that the Finance Sub-Committee obtains from such Party, and from the US Brand Team, Europe Brand Team, JCC, other JCC sub-committees and JMC, such adequate, accurate and complete information and documentation as the Finance
Sub-Committee shall reasonably require to perform its duties under the Agreement and the Financial Appendix. 
  
 11.10 Timing and Method of Payment; Currency. Each of the payments due under: (a) Sections 11.1 and 11.2 shall be paid on ***** basis, are due and
payable within ***** of the end of the applicable*****; (b) Section 11.4 shall be paid within ***** after the occurrence of the applicable milestone event and (c) Section 11.6(b) shall be paid on a ***** basis, are due and payable within ***** of
the end of the applicable*****, and in each case, 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. For the avoidance of doubt, to the extent any given payment under Sections 11.1(a), 11.2, 11.4 and 11.6 of this Agreement is owed by both
Genentech and Novartis, Tanox shall be entitled to collect the full amount when due (to the extent such amount remains unpaid) from the applicable Party responsible for making such payment under Section 8 of the Financial Appendix, regardless of any
agreements or arrangements between Genentech and Novartis to have one Party or the other make such payment to Tanox. 
  

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 11.11 Reconciliation. The ***** payments under Section 11.10 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 and to account for reconciliation of Manufacturing quantities and Worldwide allocation as provided in
Section 11.6 and the Financial Appendix). In the event that such reconciliation reveals any overpayment or underpayment, the applicable 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 or payor, as applicable. 
  
 11.12 Audit Rights. 
  
 (a)
For purposes of the audits rights described herein, and among the three Parties, the individual Party subject to an audit in any given year will be referred to as the “Auditee” and the other Parties who have certain and respective
rights to audit the books and records of the Auditee pursuant to this Section 11.12 will each be referred to as the “Audit Rights Holder” (or, collectively, as “Audit Rights Holders”). 
  
 (b) Each Party may, upon request and at its expense (except as provided for
herein), cause an internationally-recognized independent accounting firm selected by it (except one to whom the Auditee has some reasonable objection) (“Audit Team”) to audit the books and records of any other Party during ordinary
business hours, not more than once in each calendar year to determine, for any year occurring during the Term for which the books have closed (that is, any year for which annual financial statements have issued) and calendar year 2003, the
correctness of any payment made or required to be made to or by such Party, and any report underlying such payment (or lack thereof), pursuant to the terms of this Agreement. The Audit Team shall execute an appropriate and customary confidentiality
agreement with the Auditee. 
  
 (c) In respect of each audit of an
Auditee’s books and records, each Audit Rights Holder must exercise its audit right ***** such that all of the following conditions are met: (i) each Auditee is audited only once per year ***** by Audit Teams engaged by each Audit Rights
Holder, (ii) no records for any given year for an Auditee may be audited more than once, (iii) if an Audit Rights Holder exercises its audit right over the Auditee for a given year, the remaining Audit Rights Holder may exercise its audit right for
that year and if it does not do so, then the Audit Rights Holder that has not exercised its audit right over that Auditee’s books and records for that year may not, in the future, further exercise its audit right with respect to such books and
records for that year and that Auditee, (iv) an Audit Rights Holder shall only be entitled to audit books and records of an Auditee from the ***** prior to the calendar year in which the audit request is made and (v) ***** Audit Rights Holders do
not exercise their audit rights over that Auditee for a given year, they may exercise their individual ***** right with respect to the Auditee’s books and records for that year as set forth in (iv) above. Notwithstanding the foregoing,
Genentech and Novartis will be entitled to finish any audits on-going under the Original JCA as at the Effective Date. 
  
 (d) In order to initiate an audit for a particular calendar year, an Audit Right Holder must provide written notice to the Auditee *****, it shall provide
notice thereof to the initiating Audit Rights Holder and the Auditee, not less than ***** after receipt of the original written notice from the initiating Audit Rights Holder. If both Audit Rights Holders exercise 

  

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their audit rights, they will reasonably cooperate with each other to agree a date for the conduct of the audit(s) and will reasonably cooperate and
coordinate their efforts during the audit(s). The Audit Rights Holder(s) exercising their audit rights shall provide the Auditee with notice of one or more proposed dates of the audit not less than ***** prior to the first proposed date. The Auditee
will reasonably accommodate the scheduling of such audit. The Auditee shall provide such Audit Team(s) with full and complete access to the applicable books and records and otherwise reasonably cooperate with such audit. 
  
 (e) The audit report and basis for any determination by an Audit Team under
this Section 11.12 shall be made available for review and comment by the Auditee, and the Auditee shall have the right, at its expense, to request a further determination by such Audit Team as to matters which the Auditee disputes (to be completed
no more than ***** after the first determination is provided to such Auditee and to be limited to the disputed matters). If the Parties disagree as to such further determination, the Audit Right Holders and the Auditee 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 accountants shall not disclose to any individual or collective Audit
Rights Holder any information relating to the business of the Auditee except that which should properly have been contained in any report required hereunder or otherwise required to be disclosed to such Party(s) to the extent necessary to verify the
payments required to be made pursuant to the terms of this Agreement. 
  
 (f) 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 FSC 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 Party(s) within ***** of receiving the audit report. Further, if the audit for
an annual period shows an under-reporting or underpayment or an overcharge by any Party for that period of (i) *****, and/or (ii) *****, the underpaying or overcharging Party(s), as the case may be, shall reimburse the applicable underpaid or
overcharged Audit Rights Holder(s) conducting the audit(s) for its respective audit fees and reasonable out-of-pocket expenses in connection with said audit, which reimbursement shall be made within ***** of receiving appropriate invoices and other
support for such audit-related costs. If the Audit Rights Holder which does not exercise its audit rights receives payment due to an under-reporting, underpayment or overcharging discovered in the course of an audit conducted by the other Audit
Rights Holder, such non-exercising Audit Rights Holder shall reimburse the exercising Audit Rights Holder up to ***** of the reasonable costs of the audit out of the amount of any payment made to the non-exercising Audit Rights Holder as a result of
such audit.  
  
 11.13 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. 
  

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 11.14 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. 
  
 11.15 Interest. Should any Party
fail to make any payment to another Party under this Agreement when due and payable, 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. 
  
 11.16 Retroactive Effect. The royalties and profit share payments due under Sections 11.1 and 11.2, and credits against royalties (under Section
11.5), shall apply retroactively to sales of Xolair made prior to the Effective Date and shall be due and payable (a) on March 12th, 2004 (to the extent not already paid prior to the Effective Date) with respect to sales made prior to January 1,
2004, and otherwise (b) as of the next applicable payment date hereunder. 
  
 ARTICLE 12 
  
 DISPUTE
RESOLUTION 
  
 12.1 Resolution of Disputes. 

 
 (a) Subject to securing preliminary injunctive relief pursuant to Section
15.3 and subject to Section 11.12(e) with respect to audits, the Parties agree that all Disputes shall be resolved only as set forth in this Article 12. Notwithstanding anything to the contrary in this Article 12, 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 12, 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 12. 
  
 (b) The Parties agree that, subject to securing preliminary injunctive relief pursuant to Section 15.3 or as provided in Section 12.1(a) above and subject to Section 11.12(e) with respect to audits, the Parties to any
Dispute shall attempt to resolve such Dispute through good faith negotiation and discussion through the respective Alliance Managers of the Parties to the Dispute. 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 relevant Party(ies), then such Party may send a written Notice of Dispute to the Chairman of the JMC, specifying therein the nature of the Dispute, the relief
requested and all other Parties to the Dispute, and requesting that the Senior Officers of the Parties to the Dispute meet to attempt to resolve the Dispute. The Chairman of the JMC shall promptly forward the Notice of Dispute to the Senior 

  

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Officers of all Parties to the Dispute. The Senior Officers of the Parties to the Dispute shall diligently attempt to resolve the referred Dispute by mutual
consent of the Parties involved in the Dispute, including, without limitation, by means of an in-person meeting. In the event that the Senior Officers of the Parties to the Dispute are unable to resolve any Dispute within ***** days from the date
that the Notice of Dispute was delivered to the Chairman of the JMC, any Party shall be free to file a notice of arbitration with respect to the Dispute, and pursue resolution thereof, pursuant to Section 12.2. 
  
 12.2 Arbitration. 
  
 (a) All references in this Section 12.2 to a Party or Parties shall mean only
a Party or the Parties to the Dispute in question. 
  
 (b) Subject
to Section 15.3 and 12.1(a), if the Parties are unable to resolve any Dispute through the procedures described in Section 12.1(b) above, the Dispute shall, at the request of any 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”), ***** 
  
 (c) 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 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. 
  
 (d) 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 ***** after the Dispute was referred to the ICC. ***** 
  
 (e) ***** 
  
 (f) ***** 
  
 (g) *****. 
  
 (h) ***** 
  
 (i) ***** 
  
 (j) ***** 
  
 (k) The arbitrators shall issue the award (including grounds and reasoning) in writing no later than ***** following the conclusion of the last
arbitration hearing, unless all Parties to the arbitration otherwise agree. 
  
 (l) The Parties shall use reasonable efforts to conclude the arbitration hearings within ***** following the confirmation of the arbitral panel. 
  

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 (m) 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. 
  
 (n) ***** 
  
 (o) Provided the Agreement has not terminated and unless their continued performance would be likely to cause them
irreparable harm, the Parties covenant to continue the 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 Committees provided for in this Agreement. 
  
 12.3 *****. *****. 
  
 ARTICLE 13 
  
 INTELLECTUAL PROPERTY 
  
 13.1 Trademarks. 
  
 (a) No Party shall adopt or use any trademark or domain name which is the
same as or confusingly similar to an Anti-IgE Trademark (i) which is being used (under trademark law) hereunder and for which a bona-fide registration application anywhere in the world has been submitted hereunder, or (ii) which has been registered
hereunder, in either case as of the time that the Party trademark or domain name in question is originally adopted or used. 
  
 (b) All Anti-IgE Trademarks used in connection with any Anti-IgE Product or any Anti-IgE Antibody (in each case other than Parties’ corporate names
and corporate logos) in: 
  
 (i) Europe or
the US shall be selected and owned in accordance with the JCA, and Tanox shall not have any rights with respect thereto; 
  
 (ii) East Asia shall be selected and owned in accordance with the Ancillary D&L Agreement, and Genentech shall not have any rights or
obligations with respect thereto; and 
  
 (iii) the Rest of World shall be selected and owned by Novartis, and neither Tanox nor Genentech shall have any rights or obligations with respect thereto; 
  
 provided that no Anti-IgE Trademark shall be the same or confusingly similar to any other trademark or domain name of
a Party (other than an Anti-IgE Trademark for the same Anti-IgE Product) (i) which such Party uses (under trademark law) and for which such Party already has submitted in good faith a bona-fide registration application anywhere in the world, or (ii)
which has been registered by such Party, in either case as of the time that the Anti-IgE Trademark in question is originally selected.  
  

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 13.2 Ownership of Intellectual Property. 
  
 (a) Inventorship. For the purposes of this Agreement, the
determination of inventorship for inventions made during the course of, or resulting in whole or in part from, activities carried out under this Agreement shall be made in accordance with applicable laws relating to inventorship set forth in the
patent laws of the United States (Title 35, United States Code). 
  
 (b) Ownership and rights in intellectual property. 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, materials, 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 a Third Party) (with such Party being the “Developing Party”) relating to the Manufacture,
Development, Commercialization or use of any Anti-IgE Antibody or Anti-IgE Product *****. Any intellectual property relating to the Manufacture, Development, Commercialization or use of any Anti-IgE Antibody or Anti-IgE Product which is Generated
outside the collaboration contemplated by this Agreement, the Ancillary Agreements and the Outline of Terms by any Party hereto with any other Party hereto shall be owned in accordance with the provisions of the relevant agreement governing such
activity (such intellectual property being “Outside Generated Intellectual Property”, with each Party with an ownership interest therein being deemed a “Developing Party” for purposes of this Agreement). ***** For
the further avoidance of doubt, all intellectual property deemed to be solely-owned pursuant to this paragraph or Outside Generated Intellectual Property shall be subject to the provisions of Section 4.4 and the license grants set forth in Article 6
of this Agreement.  
  
 (c) Prosecution and Maintenance
of Intellectual Property which is solely-owned or jointly-owned outside the collaboration. Each Developing Party shall be solely responsible, at its own expense, for the filing, prosecution and maintenance of patent applications and patents
(including without limitation extensions, supplementary patent certificates, reissues, renewals, divisions, continuations or continuations-in-part) relating to all such intellectual property as is deemed to be solely-owned pursuant to Section
13.2(b) above or Outside Generated Intellectual Property. The Developing Party(ies) shall have the sole authority to determine all actions taken with regard to the filing, prosecution and maintenance of such patents and/or patent applications;
provided, however, that: (i) should any Developing Party wish to Abandon an application for an Anti-IgE Specific Patent, or any Anti-IgE Specific Claims within a patent application (only to the extent that they can be separated into a
divisional application or separate continuation application, as appropriate), it shall first consult with Genentech and Novartis in the US and Europe, and with Tanox and Novartis in East Asia and Novartis in the Rest of World; and (ii) should any
Developing Party wish to Abandon an issued Anti-IgE Specific Patent, or any issued patent which includes any Anti-IgE Specific Claims within a patent application (only to the extent that they can be separated into a divisional application or
separate continuation application, as appropriate), it shall first consult with, and give opportunity to Genentech and Novartis in the US and Europe, and to Tanox and Novartis in East Asia and the Rest of World, to undertake the continued
maintenance thereof. 
  

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 (d) Ownership and Rights in Jointly-Owned Intellectual Property. 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,
materials, trade secrets (including, without limitation, customer lists and marketing and sales information), and inventions) Generated jointly by two or more of the Parties (i.e., an invention in which one or more inventors from each such
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, the JCA, the Ancillary D&L Agreement or the
Outline of Terms, or deemed to be jointly-Generated pursuant Section 13.2(b), and any patent applications and patents thereon, shall be jointly owned by such Parties. With respect to intellectual property that is deemed to be jointly-Generated
pursuant Section 13.2(b), each Party, as applicable, hereby assigns and agrees to assign to the other Party(ies) to jointly own such intellectual property with such Party an undivided, joint ownership interest in, to and under all of such
Party’s right, title and interest in and to such intellectual property (including rights, if any, to enforce and collect damages, subject to the terms of this Agreement) to the extent necessary to effectuate the joint ownership therein
described in Section 13.2(b) above. Each Party assigning or obtaining rights under the previous sentence shall execute such documents and provide such cooperation and assistance as is reasonably necessary to effectuate such joint ownership interest
and any filings or recordings with respect thereto. For the avoidance of doubt, intellectual property covering such jointly-owned inventions shall be deemed to be Anti-IgE Patents, Biological Materials or Know-How (as the case may be) of the owning
Parties and subject to the provisions of Section 4.4 and the license grants set forth in Article 6 of this Agreement, even with respect to use by the abandoning Party of Acquired Patents pursuant to Section 13.2(f) below.  

 
 (e) Prosecution and Maintenance of Jointly-Owned Intellectual
Property. With respect to any jointly-owned invention as described in paragraph (d), the Parties jointly owning the invention shall consult with each other and the Controlling Party regarding the filing, prosecution and maintenance of any patent
applications and patents (including without limitation extensions, supplementary patent certificates, reissues, renewals, divisions, continuations or continuations-in-part) thereon, and responsibility for such activities will be the obligation of
the Controlling Party. The Controlling Party shall undertake such filings, prosecutions and maintenance, and the Parties jointly owning such invention shall *****. The Parties shall co-operate and consult with each other, where appropriate, with
respect to the determination of inventorship and ownership of, and with respect to the preparation, filing, prosecution and maintenance of, all patents and patent applications relating to any jointly-owned invention as described in Section 13.2(d),
including, without limitation, by executing, and procuring the execution by its employees, agents and consultants of, all such documents and instruments as are reasonably necessary for or helpful in the preparation, filing, prosecution and
maintenance of all such patents and patent applications. 
  
 (f)
Abandonment of Jointly-Owned Intellectual Property. In the event that the Controlling Party does not wish to undertake the obligations with respect to filing, maintenance, and prosecution set forth in Section 13.2(e) above it shall so notify
the non-Controlling Party or Parties and the non-Controlling Party (or if more than one, the Party which would be the Controlling Party in such Controlling Party’s absence) may assume the Controlling 

  

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Party’s responsibility for filing, prosecution and maintenance of any such patent application or patent at the non-Controlling Party’s (or
Parties’) sole expense, and will thereafter be deemed the Controlling Party for purposes hereof, on a country-by-country basis. Notwithstanding the foregoing, any Party may withdraw from or Abandon any jointly-owned patent application or patent
hereunder on ***** prior notice to the other Party or Parties jointly owning the invention and such other Party or Parties shall have a free-of-charge option to assume (at its or their sole discretion) the prosecution or maintenance thereof at its
or their sole expense. In such event,*****. Should the jointly-owning Parties wish to Abandon an Anti-IgE Specific Patent or application therefor, or any Anti-IgE Specific Claims (only to the extent that they can be separated into a divisional
application or continuation application, as appropriate), or application therefor, they should first consult with, and *****. 
  
 13.3 Use of Jointly-Owned Intellectual Property Outside of Collaboration. Without limiting the license grants in Sections 6.3, 6.4 and 6.5 and
subject to Section 4.2(a), Parties which jointly own intellectual property (including without limitation, patents, patent applications, extensions, supplementary patent certificates, reissues, renewals, divisions, continuations or continuations in
part, proprietary information, materials, trade secrets (including, without limitation, customer lists and marketing and sales information) and inventions) Generated under the collaboration contemplated by this Agreement, the Ancillary Agreements
and the Outline of Terms *****. Subject to the licenses granted under this Agreement or any Ancillary Agreement or Related Agreement and subject to Section 4.2(a), owning Parties may ***** For the avoidance of doubt, the foregoing restrictions shall
not apply to the grant by Novartis of any license to Tanox within the scope of the Amended and Restated D&L Agreement.  
  
 13.4 Licensing of Anti-IgE Specific Patents Outside of Collaboration. Subject to the licenses granted under this Agreement or any Ancillary
Agreement or Related Agreement, the Party or Parties which own an Anti-IgE Specific Patent Generated *****, or an Anti-IgE Specific Patent Generated in the collaboration contemplated by this Agreement, the Ancillary Agreements and the Outline of
Terms, may grant licenses under any such Anti-IgE Specific Patent; *****. 
  
 13.5 Infringement of Intellectual Property. 
  
 (a) The provisions of this Section 13.5 shall apply solely: (i) with respect to all alleged infringements of Anti-IgE Trademarks; (ii) with respect to all alleged infringements of any Anti-IgE Patent or any alleged
misappropriation with respect to any Company Information or Know-How, in each case by a Third Party, and (iii) with respect to all actions by any Third Party for a declaration that any of the Anti-IgE Patents or Anti-IgE Trademarks are not
infringed, are invalid or unenforceable, but with respect to (ii) and (iii), only if, and only to the extent that, the alleged infringement or misappropriation relates to the development, manufacture, use or sale of, or if and only to the extent
that the party infringing or seeking such declaration is developing, manufacturing, using or selling, an Antibody which: *****. 
  
 (b) The Parties shall together use commercially reasonable efforts to monitor the applicable markets and to inform themselves of any potential
infringement of any of the Anti-IgE Patents or Anti-IgE Trademarks. In the event that any Party becomes aware of any 

  

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infringement of any of the Anti-IgE Patents or Anti-IgE Trademarks or any misappropriation with respect to any Company Information or Know-How, or aware of
any action by any Third Party for a declaration that any of the Anti-IgE Patents or Anti-IgE Trademarks hereunder are not infringed, are invalid or unenforceable, such Party shall promptly notify the other Parties in writing, including the available
evidence of such infringement or other conduct. 
  
 (c) As soon as
reasonably practicable after the receipt of such notice, the Parties shall cause a reasonable number of their respective representatives with responsibility for the prosecution, enforcement and/or defense of the Anti-IgE Patents, Anti-IgE
Trademarks, Company Information or Know-How, as applicable, to meet and consider the appropriate course of action with respect to such infringement, misappropriation or action for declaratory relief; provided, however, that:

  
 (i) with respect to any Anti-IgE Trademarks
outside the United States, ***** shall control the prosecution of any lawsuits against Third Parties relating to infringement thereof if it elects in its sole discretion to prosecute any such suit and shall be deemed to be the Lead Litigating Party
with respect thereto *****; and 
  
 (ii) with
respect to any Anti-IgE Patent which is not: *****, any action to enforce or defend such Anti-IgE Patent shall require the consent of the owner (or all joint owners, if applicable) of such Anti-IgE Patent. The owner (or owners) shall meet with the
other Parties to discuss, and shall consider in good faith, any action to enforce or defend any such Anti-IgE Patent; 
  
 (iii) with respect to: *****, any action to enforce or defend such Anti-IgE Patent shall *****, and the owner (or all joint owners, if
applicable) shall reasonably cooperate in any action to enforce or defend such Anti-IgE Patent (including joining in any such action if necessary to establish or maintain standing or to claim damages); and 
  
 (iv) With respect to Company Information or Know-How
misappropriated by a Third Party as identified in Section 13.5(b) (or implicated in any action brought under Section 13.5(d)), the Party(ies) Controlling such Company Information or Know-How shall confer with the other Parties and give due and
reasonable consideration under the circumstances to bringing or participating in an action or proceeding for misappropriation with respect to such Company Information or Know-How (whether or not combined with a patent proceeding under Section
13.5(d) as may be appropriate) *****. 
  
 Such actions may
include, but are not limited to, bringing an action, suit or other appropriate proceeding or threatening to bring an action suit or other appropriate proceeding, to prevent or eliminate the infringement or misappropriation of any such Anti-IgE
Patent, Anti-IgE Trademark or any Know-How. At such meeting, or at such later time as may be unanimously agreed by the Parties, each Party shall provide notice to the other Parties as to whether it intends participating as a party to any action to
protect and enforce the applicable Anti-IgE Patent, Anti-IgE Trademark, Company Information or any Know-How in such territory (and each Party electing to be a party to any such action shall be a “Litigating Party” and together such
Parties shall be the “Litigating Parties” with respect to such action; provided, however, that any Party which does not elect to be a party to any such action shall not be a “Litigating Party” with 

  

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respect thereto regardless of whether it is required to join such action in order to establish or maintain standing for the action). 
  
 (d) The Litigating Parties shall nominate one of their number to be the Lead
Litigating Party; provided, however, that unless otherwise unanimously agreed by the Litigating Parties for a particular action: (A) as set forth above, Novartis shall be the Lead Litigating Party with respect to the prosecution of any
lawsuits against Third Parties relating to infringement of any Anti-IgE Trademarks outside the United States; (B) if the owner (or if jointly owned, the Controlling Party) of the applicable Anti-IgE Patent, Anti-IgE Trademark, Company Information or
any Know-How is a Litigating Party for the applicable action, then it shall be the Lead Litigating Party for such action; (C) if the owner (or if jointly owned, the Controlling Party) of the applicable Anti-IgE Patent, Anti-IgE Trademark, Company
Information or any Know-How is not a Litigating Party for the applicable action, then ***** shall be the Lead Litigating Party; and (D) if there is only one Litigating Party, then it shall be the Lead Litigating Party. The Lead Litigating Party
shall control the prosecution and settlement (if any, and only to the extent such settlement does not materially affect the rights of any other Party (including, without limitation, by the grant of a covenant-not-to-sue, dismissal with prejudice,
license or release)) of such action, suit or proceedings, and shall select and engage legal counsel reasonably acceptable to the other Litigating Parties to represent the Litigating Parties in any such action; provided, however, that
each other Party may also engage separate legal counsel to represent it with respect to such action, suit or proceeding, which representation shall be at the sole cost and expense of such Party *****. Each other Party, regardless of whether or not
it is a Litigating Party, agrees to cooperate with the Litigating Parties in any reasonable manner in any such action, suit or proceeding, at the expense of the Litigating Parties, including, without limitation, joining as a party to such action,
suit or proceeding, if necessary to maintain standing or to claim damages; provided, however, that  
  
 (i) *****; 
  
 (ii) *****; 
  
 (iii) if any Party which is not a Litigating Party is subject to a Third Party counterclaim, action, suit or proceeding in connection with
an action brought against such Third Party by the Litigating Parties under this Section 13.5, such Party may join (and the Litigating Parties shall reasonably assist in such joinder) the action brought by the Litigating Parties (and thereby become a
Litigating Party with respect thereto for all purposes of this Section 13.5), by, at its option and in its sole discretion, providing written notice to the Litigating Parties within ***** of the initiation of such counterclaim, action, suit or
proceeding and agreeing to pay to the Litigating Parties that portion of the amount of costs and expenses incurred by the Litigating Parties as of such date as such joining Party would have owed under Section 13.5(e) had such Party been a Litigating
Party at the outset of such action. 
  
 (e) All costs and expenses
of, and all amounts awarded as damages, profits or otherwise in connection with any action pursuant to Section 13.5(d) above, to the extent relating to Anti-IgE Antibodies or Anti-IgE Products, *****: 
  
 (i) *****; 
  

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 (ii) *****; 
  
 (iii) ***** 
  
 (iv) *****; *****. A Litigating Party may, if it so chooses, withdraw from (but not settle) an action under this Section 13.5 (and thereby
be relieved from continuing to fund its allocable cost of the action), provided that, such Party thereby forfeits its rights to any proceeds from such action and shall not be entitled to recover any of its cost spent to the date of its
withdrawal, and such Party shall continue to cooperate (including by remaining a named party to such action, if necessary) with any remaining Litigating Parties as necessary for such Litigating Parties to continue to pursue such action. ***** In the
event that an injunction is awarded in an action pursuant to paragraph (d) above and that injunction prohibits an activity which is alleged to be an infringement of an Anti-IgE Patent or Anti-IgE Trademark or a misappropriation of any Company
Information or Know-How, each non-Litigating Party shall pay to the Litigating Party or Parties an aggregate amount equal to ***** of the share of costs and expenses of such action as would have been payable by such Party if it had elected to be a
Litigating Party, and such payment shall be shared between the Litigating Parties in proportion to the share of the costs and expenses paid by them with respect to the action. ***** 
  
 13.6 Infringement of Third Party Patents. 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 is an infringement of one or more claims of a patent owned or controlled by such Third Party, the Parties shall co-operate *****,
the sued or threatened Party shall immediately notify the other Parties including the available evidence of such suit or threat with respect to the allegedly infringing Anti-IgE Antibody or Anti-IgE Product. ***** notwithstanding anything in this
Section 13.6, in the event that a Party wishes to settle any suit or action on a voluntary basis, the other Parties to such suit or action, if any, 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 Parties (if any) have first approved the terms of any such settlement. 
  
 ARTICLE 14 
  
 REPRESENTATIONS AND WARRANTIES 
  
 14.1 Due Organization, Valid Existence and Due Authorization. Each of the Parties hereby represents and warrants to the others that on the
Effective Date (a) such Party is duly incorporated and validly existing and/or registered as applicable under Legal Requirements of the relevant jurisdiction and (b) has the full power and authority (i) to own and operate its properties and to
conduct its business as described in its articles of association or certificate of incorporation and (ii) to execute, deliver and perform under this Agreement and each Ancillary Agreement to which it is a party. 
  

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 14.2 Approvals, Binding Obligations; No Violations; No Assignment of Claims. Each of the Parties
hereby represents and warrants to the others that on the Effective Date (a) such Party has taken all requisite actions and obtained all consents, approvals, authorizations and permits necessary for the execution, delivery and performance of its
obligations under this Agreement and any Ancillary Agreement to which it is a Party; (b) this Agreement and each Ancillary Agreement constitute a legal, valid and binding obligation of such Party enforceable against it in accordance with its terms;
(c) the execution, delivery and performance of this Agreement and the Ancillary Agreements will not violate such Party’s articles of incorporation, any other agreements or obligations of such Party or, to the best of each Party’s
knowledge, any currently effective Legal Requirements of any relevant jurisdiction; and (d) such Party is the lawful owner of all Existing Claims being released by such Party hereunder and such Party has not assigned, pledged, or in any other manner
sold or transferred any right, title or interest in or to such Existing Claim to any Third Party (or to any other Party or its Affiliates), subject *****. 
  
 14.3 Anti-IgE Patents, Know-How and Biological Materials. ***** 
  
 14.4 No Inconsistent Rights. Each Party represents and warrants to the other Parties that ***** as of the Effective
Date it has not granted, and will not during the Term grant, any rights (implied or otherwise) inconsistent with this Agreement or any Ancillary Agreement to use such Party’s Anti-IgE Patents, Know-How or Biological Materials to any other
person or entity except as expressly set forth in this Agreement and to the extent expressly contemplated and permitted herein. 
  
 14.5 Third Party Agreements. Each Party represents and warrants to the others that, it shall, upon request, provide the others with access to a
true, complete and correct copy (including any amendments thereto) of each agreement with a Third Party referring or relating substantially (but not necessarily specifically) to the Manufacture, Commercialization or Development of Anti-IgE
Antibodies and Anti-IgE Products, the existence or termination of which would be reasonably expected to have a material adverse effect on any Party’s ability to Develop, Manufacture or Commercialize any Anti-IgE Antibody or Anti-IgE Product
(collectively, “Third Party Agreements”); provided, however, that a Party may provide access to only a redacted copy in so far as required by another party to such agreement or not relevant to any Anti-IgE Antibody or
Anti-IgE Product. Each Party has provided to each of the other Parties a true, complete and correct list of all such Third Party Agreements to which it is a party. Other than as notified between the Parties prior to the Effective Date, each Party
represents that all Third Party Agreements to which it is a party are in full force and effect and that such Party has neither received nor delivered any notice of default thereunder, nor does such Party know of any circumstances which, with notice
or lapse of time or both could result in default thereunder. 
  
 14.6 Agreements Between Parties. 
  
 (a) As of the
Effective Date, Genentech and Novartis each represent and warrant to Tanox that aside from the agreements listed in Part A of Schedule C, agreements between all three of the Parties and agreements with one or more Third Parties which are related to
and entered into solely in the ordinary course of the implementation of development or commercialization activities regarding Anti-IgE Antibodies or Anti-IgE Products pursuant to the 

  

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Outline of Terms, the Original JCA or the Original D&L Agreement, or which are related to litigation or litigation procedures between the Parties or
anticipated litigation with any Third Party, there are no agreements between Genentech and Novartis which remain in effect after the Effective Date relating to the clinical development, manufacture or commercialization (including, without
limitation, with respect to the sharing of costs or inter-Party transfers or sales of Anti-IgE Product) of Anti-IgE Antibodies, Anti-IgE Products or other Antibody products which are known to directly or indirectly, operate through or within the IgE
pathway to inhibit or otherwise interact with IgE; 
  
 (b) As of
the Effective Date, Tanox and Novartis each represent and warrant to Genentech that, aside from the agreements listed in Part B of Schedule C, agreements between all three of the Parties and aside from agreements with one or more Third Parties which
are related to and entered into solely in the ordinary course of the implementation of development or commercialization activities regarding Anti-IgE Antibodies or Anti-IgE Products pursuant to the Outline of Terms, the Original JCA or the Original
D&L Agreement, or which are related to litigation or litigation procedures between the Parties or anticipated litigation with any Third Party, there are no agreements between Tanox and Novartis which remain in effect after the Effective Date
relating to the clinical development, manufacture or commercialization (including, without limitation, with respect to the sharing of costs or inter-Party transfers or sales of Anti-IgE Product) of Anti-IgE Antibodies, Anti-IgE Products or other
Antibody products which are known to directly or indirectly, operate through or within the IgE pathway to inhibit or otherwise interact with IgE; and 
  
 (c) As of the Effective Date, Tanox and Genentech each represent and warrant to Novartis that, aside from the agreements listed in Part C of Schedule C,
agreements between all three of the Parties and aside from agreements with one or more Third Parties which are related to and entered into solely in the ordinary course of the implementation of development or commercialization activities regarding
Anti-IgE Antibodies or Anti-IgE Products pursuant to the Outline of Terms, the Original JCA or the Original D&L Agreement, or which are related to litigation or litigation procedures between the Parties or anticipated litigation with any Third
Party, there are no agreements between Genentech and Tanox ***** which remain in effect after the Effective Date relating to the clinical development, manufacture or commercialization (including, without limitation, with respect to the sharing of
costs or inter-Party transfers or sales of Anti-IgE Product) of Anti-IgE Antibodies or Anti-IgE Products or other Antibody products which are known to directly or indirectly, operate through or within the IgE pathway to inhibit or otherwise interact
with IgE. 
  
 14.7 Third Party Claims. 
  
 (a) Each Party represents and warrants to the others that, as of the
Effective Date, to the best of its knowledge and except for the Legal Proceedings *****: (a) there is no Third Party lawsuit, claim, action or demand, or any Public Authority proceeding, action, investigation or penalty, which relates solely to any
Anti-IgE Antibody or Anti-IgE Product or is likely to prevent or hinder the Manufacture, Development or Commercialization of any Anti-IgE Antibody or Anti-IgE Product as currently, or currently proposed to be, Manufactured, Developed or
Commercialized; and (b) there are no circumstances which would reasonably be expected to give rise to any Third Party lawsuit, claim, action or demand, or any Public 

  

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Authority proceeding, action, investigation or penalty, which would solely relate to any Anti-IgE Antibody or Anti-IgE Product or would be likely to prevent
or hinder the Manufacture, Development or Commercialization of any Anti-IgE Antibody or Anti-IgE Product as currently, or currently proposed to be, Manufactured, Developed or Commercialized. 
  
 (b) Each Party represents and warrants to the others that, as of the
Effective Date, to the best of its knowledge and except for the Legal Proceedings *****: (a) there is no Third Party lawsuit, claim, action or demand, or any Public Authority proceeding, action, investigation or penalty, which relates to any
Anti-IgE Specific Patents or Anti-IgE Specific Claims; and (b) there are no circumstances which would reasonably be expected to give rise to any Third Party lawsuit, claim, action or demand, or any Public Authority proceeding, action, investigation
or penalty, with respect to any Anti-IgE Specific Patents or Anti-IgE Specific Claims. 
  
 14.8 Disclaimer. Except as expressly set forth herein or in any Ancillary Agreement or Related Agreement, 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. 
  
 ARTICLE 15 
  
 CONFIDENTIALITY 
  
 15.1 Company Information. 
  
 (a) Subject to the other terms of this Agreement (including Section 15.1(b)
below and Section 6.6), each Party acknowledges and agrees that all Company Information provided by or on behalf of any other Party or its Affiliates (the “Disclosing Party”) to such Party or its Affiliates (the “Receiving
Party”) under this Agreement, the JCA and the Ancillary D&L Agreement or the Outline of Terms is confidential and agrees (i) to maintain such Company Information disclosed by a Disclosing Party in strict confidence and not disclose it
to any Third Party and (ii) to use such Company Information disclosed by a Disclosing Party solely for the purposes contemplated under this Agreement or any Ancillary Agreement solely with respect to Anti-IgE Antibodies and Anti-IgE Products
(including for the purpose of exercising a Party’s rights or performing a Party’s obligations under this Agreement or any Ancillary Agreement) *****. 
  
 (b) The obligations under Section 15.1(a) above shall not apply to Company 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 15.1(a) 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 the Company Information provided by the Disclosing Party. 
  

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 (c) In addition, the Receiving Party may disclose Company Information disclosed by the Disclosing Party
(i) to the extent required to be disclosed to comply with Legal Requirements (including applicable securities laws), to defend or prosecute litigation, or to file or prosecute patent applications pursuant to Section 13.2 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, provided that such Affiliate or any
such employees, agents, legal representatives or other authorized Persons are bound by confidentiality obligations with respect to such Company Information no less stringent than those set forth in Section 15.1(a). 
  
 (d) With effect from the Effective Date, the provisions set forth in this
Section 15.1 shall apply also to information disclosed under the Outline of Terms or the Original JCA prior to the Effective Date. 
  
 15.2 Academic and Scientific Publications. In the event a Party desires, after the Effective Date, to publish in a scientific or academic journal
or similar publication or to make a public scientific or academic presentation in the form of a seminar or lecture or the like, Company Information relating to the Development (including manufacturing development) of any Anti-IgE Product or Anti-IgE
Antibody, in addition to any necessary internal reviews or approvals by such Party, such Party shall submit a copy of the proposed publication or presentation to the JCC (or its designees) prior to any disclosure or submission to any Third Party.
The JCC (or its designees) shall evaluate the submission to determine the effect, if any, that such publication or presentation would have on the Commercialization of Anti-IgE Products, whereupon the JCC shall either approve, require modifications
to, or disapprove the proposed publication or presentation. Such Company Information shall not be published or otherwise disclosed unless approved by the JCC under this Section 15.2. The provisions of this Section 15.2 regarding publications or
presentations shall be in addition to the provisions of Section 20.13 regarding publicity. 
  
 15.3 Injunctive Relief. Each Party acknowledges that damages resulting from disclosure of any other Party’s Company Information in breach of the provisions of this Article 15 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 Company 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 Article
12). 
  
 ARTICLE 16 
  
 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 

  

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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 JCA, 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 16 to the contrary, nothing in this Article 16 shall limit a Party’s right to seek and recover royalties, profit share or Manufacturing compensation
payments which would have been payable or due under Article 11 of this Agreement but for a Party’s breach of this Agreement. 
  
 ARTICLE 17 
  
 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 or the JCA 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”). 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 18 
  
 TERM AND TERMINATION 
  
 18.1 Term. Unless otherwise terminated as to all of Novartis,
Genentech and Tanox pursuant to other express provisions set forth in this Article 18, this Agreement shall expire: 
  
 (a) as to the United States, on the later of ***** 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 Genentech and/or Novartis (or any of their respective Affiliates or sublicensees), in each case, in the United States (except and unless the lack of any such activity constitutes a
material breach hereunder); and 
  
 (b) as to Europe, on the later
of ***** and such time as no Anti-IgE Antibody or Anti-IgE Product is any longer being Developed (including manufacturing development) hereunder by or for Genentech or Novartis (or any of their respective Affiliates or sublicensees) or
Commercialized by or for Novartis (or any of its respective Affiliates or sublicensees) in Europe (except and unless the lack of any such activity constitutes a material breach hereunder); 
  

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 (c) as to East Asia, on the later of ***** and such time as no Anti-IgE Antibody or Anti-IgE Product is
any longer being Developed (including manufacturing development) under the Ancillary D&L Agreement by or for Novartis or Tanox (or any of their respective Affiliates or sublicensees) for, or Commercialized by or for Novartis (or any of its
respective Affiliates or sublicensees) in, East Asia (except and unless the lack of any such activity constitutes a material breach hereunder or thereunder); and 
  
 (d) as to the Rest of World, on the later of ***** and such time as no Anti-IgE Antibody or Anti-IgE Product is any longer
being Developed (including manufacturing development) under the Ancillary D&L Agreement or Commercialized by or for Novartis (or any of its respective Affiliates or sublicensees) in the Rest of World (except and unless the lack of any such
activity constitutes a material breach thereunder). 
  
 18.2
Termination Rights. This Agreement may be terminated (including, without limitation, with respect to the rights and obligations of the Party or Parties as to which the Agreement is terminated after the effective date of such termination,
subject to the provisions of Section 18.6): (i) by mutual written agreement of the Parties; (ii) by any Party, by giving written notice to both other Parties, 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 one of the other Parties (“Bankrupt
Party”) where such petition, assignment or similar proceeding is not dismissed or vacated within *****, or upon or after the rejection of any license hereunder by the Bankrupt Party; or (iii) otherwise as expressly specified in this Article
18.  
  
 (a) If Bankrupt Party is Tanox. Upon
termination under subsection (ii) above, if the Bankrupt Party is Tanox, subject to Section 18.6: (i) Tanox’s rights under this Agreement (including but not limited to Tanox’s rights under Articles 5 and 6 herein) shall terminate, (ii)
notwithstanding clause (i), Tanox’s right to receive payments under Article 11 shall survive, and (iii) all of Genentech’s and Novartis’ rights under this Agreement (including, without limitation, the license grants from Tanox to
Novartis and Genentech under Article 6) shall survive. 
  
 (b)
If Bankrupt Party is Genentech. Upon termination under subsection (ii) above, if the Bankrupt Party is Genentech, subject to Section 18.6, Genentech’s rights and obligations under this Agreement and the JCA shall be treated as set forth
in Section 18.3(a)(i) below, and Genentech shall be paid an appropriate royalty to reflect the license grants from Genentech to Novartis and Tanox hereunder and under the JCA (which, for the avoidance of doubt, shall survive any such termination)
and Genentech’s investment in the Development (including manufacturing development) of any applicable Anti-IgE Product. 
  
 (c) If Bankrupt Party is Novartis. Upon termination under subsection (ii) above, if the Bankrupt Party is Novartis, subject to Section 18.6,
Novartis’ rights and obligations under this Agreement, the JCA, and the Ancillary D&L Agreement shall be treated as set forth in Section 18.3(b) below, and Novartis shall be paid an appropriate royalty to reflect the license 

  

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grants from Novartis to Genentech and Tanox hereunder (which, for the avoidance of doubt, shall survive any such termination) and Novartis’ investment
in the Development (including manufacturing development) of any applicable Anti-IgE Product. 
  
 18.3 Termination At Will. If at any time after the date which is *****: (i) both Novartis and Genentech desire to terminate this Agreement under this Section 18.3 and exercise such right of termination within
***** of each other, then Novartis and Genentech shall together be the “Terminating Parties” for purposes of Part 1 of Schedule D; (ii) Genentech desires to terminate this Agreement as to itself under this Section 18.3 more than
***** after Novartis has already given notice of termination under Section 18.3(b), then Genentech shall be the “Terminating Party” for purposes of Part 1 of Schedule D; or (iii) Novartis desires to terminate this Agreement as to
itself under this Section 18.3 more than ***** after Genentech has already given notice of termination under Section 18.3(a) then Novartis shall be the “Terminating Party” for purposes of Part 1 of Schedule D. 
  
 (a) Termination by Genentech. Subject to Section 18.3(c) below,
Genentech may terminate this Agreement with respect to itself (including, without limitation, its rights and obligations after the effective date of such termination, subject to the provisions of Section 18.6), at any time after the date which is
*****, by giving ***** prior written notice to Novartis and Tanox and paying all amounts it is financially responsible for hereunder up to such termination date; provided, however, such notice shall not be deemed delivered hereunder
unless and until Genentech gives written notice of termination of the JCA to Novartis, with a copy to Tanox; and provided, further, that within ***** of receipt of such notice, Novartis and Tanox may, by giving joint notice to
Genentech accelerate the effective date of any such termination to a date not less than ***** from the date of Genentech’s notice of termination under this Section18.3(a). ***** 
  
 (i) ***** Genentech’s rights under this Agreement (including ownership of all Approvals held by
Genentech and Genentech’s rights to vote and participate on Committees but excluding ownership of intellectual property), Genentech’s right to Develop and Commercialize Anti-IgE Products, and such other rights under this Agreement which
Genentech has licensed from Novartis or Tanox, shall be transferred or granted, as the case may be, to Novartis, and all license rights granted by Genentech under this Agreement and the JCA to Novartis and Tanox with respect to Genentech’s
Anti-IgE Patents, Know-How and Biological Materials covering Anti-IgE Products Approved or in active Development as of the effective date of termination shall remain in full force and effect, even with respect to future Anti-IgE Products*****. With
effect from the effective date of such termination, but subject to Section 18.3(c), Novartis shall assume all of Genentech’s obligations under this Agreement and the JCA and shall be entitled to continue the Development and Commercialization of
Anti-IgE Antibodies and Anti-IgE Products in the United States, Europe, East Asia and the Rest of World, subject to Tanox’s rights under this Agreement, without further compensation to Genentech except as required with respect to the
Manufacture of Anti-IgE Products; ***** 
  
 (ii)
***** 
  
 In the event that Genentech terminates this Agreement
as set forth in this Section 18.3(a), it shall provide all cooperation and assistance reasonably requested by Novartis to enable Novartis to assume with as little disruption as reasonably possible, the continued Manufacture, Development and
Commercialization of the Anti-IgE Products then being 

  

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Commercialized or Developed hereunder. 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 listed in Part 2 of Schedule D. 
  
 (b) Termination by Novartis. Subject to Section 18.3(c) below, Novartis may terminate this Agreement with respect to itself (including, without
limitation, its rights and obligations after the effective date of such termination, subject to the provisions of Section 18.6), at any time after the date which is *****, by giving ***** prior written notice to Genentech and Tanox and paying all
amounts it is financially responsible for hereunder up to such termination date; provided, however, such notice shall not be deemed delivered hereunder unless and until Novartis gives written notice of termination of the JCA to
Genentech, with a copy to Tanox, and written notice of termination of the Ancillary D&L Agreement to Tanox, with a copy to Genentech; and provided, further, that within ***** of receipt of such notice, Genentech and Tanox may, by
giving joint notice to Novartis accelerate the effective date of any such termination to a date not less than ***** from the date of Novartis’ notice of termination under this Section18.3(b). Subject to Sections 18.3(c) and 18.6 below, if
Novartis terminates this Agreement with respect to itself (or terminates as to East Asia and ROW as described in subclause (iii) below): 
  
 (i) except as provided in subsection (ii) below and *****, Novartis’ rights under this Agreement with respect to East Asia and the
ROW (including ownership of all Approvals held by Novartis and Novartis’ rights to vote and participate on Committees but excluding ownership of intellectual property), Novartis’ rights to Develop and Commercialize Anti-IgE Products in
East Asia and ROW under this Agreement and the Ancillary D&L Agreement, and such other rights under this Agreement with respect to East Asia and ROW which Novartis has licensed from Genentech or Tanox shall be transferred or granted, as the case
may be, to Tanox and all license rights granted by Novartis to Tanox with respect to Novartis’ Anti-IgE Patents, Company Information, Know-How and Biological Materials, covering Anti-IgE Products Approved or in active Development as of the
effective date of termination shall remain in full force and effect, even with respect to future Anti-IgE Products *****. With effect from the effective date of such termination, but subject to Section 18.3(d), Tanox shall assume all of
Novartis’ obligations under this Agreement and the Ancillary D&L Agreement with respect to East Asia and the ROW and shall be entitled to continue the Development and Commercialization of Anti-IgE Antibodies and Anti-IgE Products in East
Asia and the Rest of World without further compensation to Novartis except as required with respect to the Manufacture of Anti-IgE Products. For the avoidance of doubt, 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 World and Novartis will have no further rights to develop or commercialize Anti-IgE Antibodies or Anti-IgE Products in East Asia or the ROW. *****

  
 (ii) Novartis’ rights under this
Agreement with respect to the US and Europe (including ownership of all Approvals held by Novartis and Novartis’ rights to vote and participate on Committees but excluding ownership of intellectual property), Novartis’ rights to Develop
and Commercialize Anti-IgE Products in the United States and Europe, and such other rights under this Agreement with respect to the US and Europe which 

  

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Novartis has licensed from Genentech or Tanox, shall be transferred or granted, as the case may be, to Genentech *****, and all license rights granted by
Novartis under this Agreement to Genentech with respect to Novartis’ Anti-IgE Patents, Know-How and Biological Materials covering Anti-IgE Products Approved or in active Development as of the effective date of termination shall remain in full
force and effect, even with respect to future Anti-IgE Products *****. With effect from the effective date of such termination, subject to Section 18.3(c), Genentech shall assume all of Novartis’ obligations under this Agreement and the JCA
with respect to the US and Europe and shall be entitled to continue the Development and Commercialization of Anti-IgE Antibodies and Anti-IgE Products in the United States and Europe, subject to Tanox’s rights under this Agreement, without
further compensation to Novartis except as required with respect to the Manufacture of Anti-IgE Products. For the avoidance of doubt, ***** Genentech shall have and retain exclusive rights for the Development and Commercialization of Anti-IgE
Antibodies and Anti-IgE Products in the US and Europe and Novartis will have no further rights to develop or commercialize Anti-IgE Antibodies or Anti-IgE Products in the US or Europe. 
  
 (iii) In the event Novartis terminates its rights to develop, manufacture and commercialize Anti-IgE
Antibodies and Anti-IgE Products in East Asia and the ROW only through termination of the Ancillary D&L Agreement under Section 16.5(a) thereof, then Subsection 18.3(b)(i) shall apply with respect to East Asia and ROW; provided,
however, that all references in paragraph (x) of Part 3 of Schedule D to cooperation between Genentech and Tanox therein shall be deemed references to coordination between Genentech, Novartis and Tanox. 
  
 In the event that Novartis terminates this Agreement as set forth in this
Section 18.3(b), it shall provide all cooperation and assistance reasonably requested by Genentech and Tanox to enable them to assume with as little disruption as reasonably possible, the continued Manufacture, Development and Commercialization of
the Anti-IgE Products then being Commercialized or Developed hereunder. 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 listed in Part 3 of Schedule D. 
  
 (c) Termination by both Genentech and Novartis. If at any time after the date which is ***** (i) both Novartis and Genentech desire to terminate this Agreement under this Section 18.3 and exercise such right of termination within
***** of each other, (ii) Genentech desires to terminate this Agreement as to itself under this Section 18.3 after Novartis has already given notice of termination under Section 18.3(b) or (iii) Novartis desires to terminate this Agreement as to
itself under this Section 18.3 after Genentech has already given notice of termination under Section 18.3(a), then, if Tanox chooses to continue Development and Commercialization of Anti-IgE Products, the Terminating Party(ies) (as defined above)
shall comply with the requirements of Part 1 of Schedule D. Upon such termination, all rights ***** granted by or to each of Genentech and Novartis hereunder shall, at Tanox’s option, revert and extend to Tanox so that Tanox, at its option, can
pursue the Worldwide Development and Commercialization of Anti-IgE Antibodies and Anti-IgE Products on its own or through its Affiliates or sublicensees, subject to Tanox’s compliance with Schedule D and payment of the 

  

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residual royalty and profit sharing payments set forth in Section 18.3(d) and all obligations of Genentech and Novartis shall terminate (except as expressly
set forth in this Section 18.3(c) and in Section 18.6). In the event that both Novartis and Genentech terminate this Agreement as set forth in this Section 18.3(c), the Terminating Party(ies) 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 (unless and for so long as the Terminating Party(ies) elect to continue Manufacture as contemplated in
Schedule D), Development and Commercialization of the Anti-IgE Products then being Commercialized or Developed hereunder (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 listed in Part 1 of
Schedule D. 
  
 (d) Residual Payments. In the event that
both Novartis and Genentech terminate this Agreement as set forth in Section 18.3(c) and Tanox chooses to continue Development and Commercialization of Anti-IgE Products, Tanox shall pay to Novartis and Genentech, ***** in the aggregate: 

 
 (i) For the period, if any, beginning as of the effective
date of termination and ending on the date that is *****: (A) ***** of Worldwide net sales (calculated in a manner consistent with that set forth in the Financial Appendix) of Anti-IgE Antibodies and Anti-IgE Products sold by Tanox, an Affiliate or
sublicensee; plus (B) ***** of Worldwide net profits (calculated in a manner consistent with the calculation of Net Profits (U.S.) minus Sales Costs (U.S.) set forth in the Financial Appendix) of Tanox and/or applicable Affiliates and
sublicensees from Anti-IgE Products (where costs incurred by Tanox which are directly related to the transfer to Tanox of the continued Development and Commercialization of Anti-IgE Products shall be deducted in the calculation of such net profits);
and 
  
 (ii) For the period beginning on the date
that is ***** and continuing thereafter: (A) ***** of net sales in any country (calculated in a manner consistent with that set forth in the Financial Appendix) of Anti-IgE Antibodies and Anti-IgE Products sold by Tanox, an Affiliate or sublicensee,
the manufacture, use or sale of which would infringe a Valid Claim of an Anti-IgE Patent in such country Controlled by either or both of Genentech or Novartis and licensed to Tanox under Section 18.3(c) and Part 1 of Schedule D (it being understood
that no such ***** royalty shall be due in the absence of any such Valid Claim); plus (B) ***** of Worldwide net profits (calculated in a manner consistent with the calculation of Net Profits (U.S.) minus Sales Costs (U.S.) set forth in the
Financial Appendix) of Tanox and/or applicable Affiliates and sublicensees from Anti-IgE Products (where costs incurred by Tanox which are directly related to the transfer to Tanox of the continued Development and Commercialization of Anti-IgE
Products shall be deducted in the calculation of such net profits).  
  
 ***** 
  

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 18.4 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 Parties, except that the other Parties may not terminate this Agreement as to the
Breaching Party. ***** 
  
 18.5 Termination on Change of
Control. 
  
 (a) For purposes of this Section 18.5,

  
 (i) “Change in Control” of a
Person shall mean when any other Person or group of Persons acting jointly on the basis of an agreement with each other relating to the exercise of voting rights, acquires (whether by direct acquisition, merger, consolidation or similar transaction)
control of more than 50% of the voting stock of such Person. ***** The determination as to whether a Change in Control has occurred shall be made under the law governing the domicile of the applicable entity for which the change in control has
occurred; 
  
 (ii) “Europe
Value” shall mean the aggregate amount in United States dollars for the value, as determined by the Party that is not the subject of the Change of Control as set forth in subparagraphs (b) or (c) below, of the entire interests, rights and
obligations of both Genentech and Novartis (the “Genentech Europe Rights” and “Novartis Europe Rights”, respectively) under this Agreement and the Ancillary Agreements relating to the Development, Manufacture and
Commercialization of Anti-IgE Antibodies and Anti-IgE Products in Europe, including all rights and obligations under the aforementioned agreements that may survive any event of termination, including, but not limited to, any provision which may
obligate one Party to supply the other Party(ies) with Anti-IgE Products, along with inventory, rights under contracts with Third Parties and other tangible and intangible assets; 
  
 (iii) “US Value” shall mean the aggregate amount in United States dollars for the value, as
determined by the Party that is not the subject of the Change of Control as set forth in subparagraphs (b) or (c) below, of the entire interests, rights and obligations of both Genentech and Novartis (the “Genentech US Rights” and
“Novartis US Rights”, respectively) under this Agreement and the Ancillary Agreements relating to the Development, Manufacture and Commercialization of Anti-IgE Antibodies and Anti-IgE Products in the United States, including all
rights and obligations under the aforementioned agreements that may survive any event of termination, including, but not limited to, any provision which may obligate one Party to supply the other Party(ies) with Anti-IgE Products, along with
inventory, rights under contracts with Third Parties and other tangible and intangible assets; 
  
 (iv) “EA/ROW Value” shall mean the aggregate amount in United States dollars for the value of the entire interests,
rights and obligations of Novartis (the “Novartis EA/ROW Rights”) under this Agreement and the Ancillary Agreements relating to the Development and Commercialization of Anti-IgE Antibodies and Anti-IgE Products in East Asia and ROW,
including all rights and obligations under the aforementioned agreements that may survive any event of termination, including, but not 

  

 -77- 

 
limited to, any provision which may obligate one Party to supply another Party(ies) with Anti-IgE Products, along with inventory, rights under contracts with
Third Parties and other tangible and intangible assets, all as appraised in accordance with the valuation procedures set forth in paragraphs (e), (f) and (g) below; 
  
 (v) “Genentech Interest” shall mean the amount in United States dollars equal to the sum of
***** the US Value and ***** the Europe Value; 
  
 (vi) “Genentech Rights” shall mean the Genentech US Rights and the Genentech Europe Rights. 
  
 (vii) “Novartis Interest” shall mean the amount in United States dollars equal to the sum of ***** the US Value, *****
the Europe Value, and ***** the EA/ROW Value; 
  
 (viii) “Novartis Rights” shall mean the Novartis US Rights, the Novartis Europe Rights and the Novartis EA/ROW Rights; 
  
 (b) If at any time during the Term, there shall occur a Change in Control of Novartis then, within ***** after the date of such Change in Control,
Genentech may, by giving written notice to Novartis and Tanox, elect to cause valuations, in accordance with the procedures set forth in this Section 18.5, of the EA/ROW Value (hereinafter each a “Valuation” and collectively, the
“Valuations”). Within ***** following such Valuation, Genentech may (but shall not be obligated to), by giving written notice to Novartis and Tanox setting forth Genentech’s offer for the Europe Value and the US Value, and the
EA/ROW Value (determined as set forth in Sections 18.5(e)-(g) below), elect *****. Such option shall be exercisable by notice in writing to both Genentech and Tanox not less than ***** after receipt by Novartis of the above notice from Genentech.

  
 (c) If at any time during the Term, there shall occur a Change
in Control of Genentech then, within ***** after the date of such Change in Control, Novartis may, by giving written notice to Genentech and Tanox, elect to cause Valuations, in accordance with the procedures set forth in this Section 16.4, of the
EA/ROW Value. Within ***** following such Valuation, Novartis may (but shall not be obligated to), by giving written notice to Genentech and Tanox setting forth Novartis’ offer for the Europe Value and the US Value, and the EA/ROW Value
(determined as set forth in Sections 18.5(e)-(g) below), elect *****. Such option shall be exercisable by notice in writing to both Novartis and Tanox not less than ***** after receipt by Genentech of the above notice from Novartis. 
  
 (d) Notwithstanding paragraphs (b) and (c) above, at any time that an
election has been made that would result in Genentech purchasing the Novartis Rights under paragraphs (b) or (c) above, Tanox may, by giving written notice to Genentech and Novartis within ***** of receiving the Change of Control Party’s
election, elect to *****. If Tanox so elects, then *****. 
  
 (e)
The Valuations shall be conclusively determined by two internationally recognized investment banking firms, one of which shall be retained and paid by Genentech, and one of which shall be retained and paid by Novartis, provided,
however, that, if either Party fails to deliver a notice to the other Party of its selection of an investment banking firm within ***** 

  

 -78- 

 
after notice from the other Party that it has selected an investment banking firm, then the investment banking firm so selected shall itself choose a second
internationally recognized investment banking firm that is independent of the Parties, their respective Affiliates and such first firm. 
  
 (f) The investment banking firms selected in accordance with the foregoing procedure shall each determine the fair market value of the EA/ROW Value and
shall document such fair market value determinations in written reports which shall be submitted to Genentech, Novartis and Tanox within ***** following the selection of such investment banks. Such fair market valuation determined under this
procedure shall be an amount that, on the basis of market and other conditions prevailing at such time, would reasonably be expected to be paid by a Third Party in an arm’s length transaction, assuming that the buyer and seller are under no
compulsion to buy or sell, but shall be determined without regard to any control premium or minority discount, it being understood and agreed that all intellectual property rights and other assets licensed, leased or otherwise made available by the
Parties and their respective Affiliates shall only be valued on a going concern basis. 
  
 (g) The fair market value of the Novartis EA/ROW Rights shall be deemed to be the amount equal to *****, a third internationally recognized investment banking firm (that is independent of the Parties, their respective
Affiliates and such initial two firms) selected by the first two investment banking firms (or, if the two investment banking firms are unable to select a third investment banking firm within *****, then the two initial investment banking firms,
within ***** thereafter, each shall submit the names of three (3) internationally recognized investment banking firms (each of which is independent of the Parties, their respective Affiliates and such initial two firms) that is willing to act as the
third investment banking firm hereunder, one of which firms shall be selected by lot by the Parties), shall determine such fair market value by *****. The cost of such third investment banking firm shall be borne on a ***** between Genentech and
Novartis. 
  
 (h) A Party purchasing the other Party’s
interest pursuant to this Section 18.5 shall pay for such interest in cash, by wire transfer of an amount equal to the purchase price for the applicable interest. Any purchase and sale of the Genentech Rights or the Novartis Rights pursuant to this
Section 18.5 shall be transferred free and clear of all liens and other encumbrances (except for obligations to another Party set forth in the Tripartite Cooperation Agreement and the Ancillary Agreements) and shall be consummated in a closing (the
“Closing”) taking place no later than ***** following:*****. Both Novartis and Genentech (and, as applicable, Tanox) agree that (i) if the purchasing Party shall fail to pay for the selling Party’s interest on the Closing Date,
absent default by the selling Party, the purchasing Party shall be liable to the selling Party for monetary damages and (ii) if the selling Party refuses to transfer its interest to the purchasing Party on the Closing Date, absent default by the
purchasing Party, the purchasing Party shall (without prejudice to any other rights the purchasing Party may have against the selling Party) be entitled to specific performance and injunctive and other equitable relief to enforce the performance of
the selling Party’s obligations under this Section 18.5. 
  
 (i) Upon and subsequent to the Closing, the Parties shall use their respective commercially reasonable efforts to continue to perform obligations not yet completed at such 

  

 -79- 

 
time and/or to transition the acquired rights and the performance of such obligations to the other Party in a commercially reasonable manner, including
without limitation as contemplated in Schedule D, as if the non-purchasing Party were a Party terminating at will pursuant to Section 18.3. Without limiting the foregoing, the non-purchasing Party shall execute such other documents as are necessary
to transfer all of the Genentech Interest or Novartis Interest, as the case may be, to the purchasing Party in order to (i) assure that the purchasing Party or its designee may enjoy the benefits of the interests so purchased and (ii) release the
selling Party from its obligations in effect at the time of the Closing pursuant to this Agreement and the Ancillary Agreements, subject to Schedule D. If Tanox does not elect to purchase the Novartis EA/ROW Interest, then Genentech shall replace
Novartis with respect to East Asia and ROW hereunder and under the Ancillary D&L Agreement and Genentech shall assume all of Novartis’ rights and obligations under the Ancillary D&L Agreement. 
  
 18.6 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: 3 (“Settlement”), 6.6 (“Use of Know-How”), 11 (“Payments”) (with respect to only amounts owing or
accrued as of the effective date of termination), 12 (“Dispute Resolution”), 13.3 (“Use of Jointly-Owned Intellectual Property Outside of the Collaboration”), 13.4 (“Licensing of Anti-IgE Specific Patents Outside of the
Collaboration”), 15 (“Confidentiality”) (but only for a period of ***** after the effective date of termination or expiration in its entirety, after which time such Article 15 shall have no further force or effect), and 16
(“Limitations on Liability”), this Article 18, and Articles 19 (“Indemnification and Insurance”) (with respect only to events occurring prior to the effective date of termination) and 20 (“Miscellaneous”). All other
provisions including the licenses granted herein (except to the extent surviving under Section 18.3), 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 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 19 
  
 INDEMNIFICATION AND INSURANCE 
  
 19.1 Indemnification by Tanox. 
  
 (a) Tanox shall indemnify, defend and hold harmless Genentech, its Affiliates, successors and permitted assigns and their respective directors, officers, employees and agents (the “Genentech Indemnitees”) from and against
any and all Damages, to the extent arising from any Third Party claim, action, suit, proceeding or investigation based on ***** 
  

 -80- 

 (b) Tanox shall indemnify, defend and hold harmless Novartis, its Affiliates, successors and permitted
assigns and their respective directors, officers, employees and agents (the “Novartis Indemnitees”) from and against any and all Damages to the extent arising from any Third Party claim, action, suit, proceeding or investigation
based on: *****. 
  
 (c) To the extent not already indemnified
pursuant to the Hu-901 Extension Agreements, Tanox shall indemnify, defend and hold harmless the Genentech Indemnitees and Novartis Indemnitees from and against any and all Damages to the extent arising from 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 ***** 
  
 ***** 
  
 19.2 Indemnification by Genentech. 
  
 (a) Genentech shall indemnify, defend and hold harmless Tanox, its Affiliates, successors and permitted assigns and their respective directors, officers,
employees and agents (the “Tanox Indemnitees”) from and against any and all Damages to the extent arising from any Third Party claim, action, suit, proceeding or investigation based on: ***** 
  
 (b) Genentech shall indemnify, defend and hold harmless the Novartis
Indemnitees from and against any and all Damages to the extent arising from any Third Party claim, action, suit, proceeding or investigation based on: ***** 
  
 (c) Genentech shall indemnify, defend and hold harmless the Tanox Indemnitees from and against any and all Damages to the extent arising from any *****

  
 *****. 
  
 19.3 Indemnification by Novartis. 
  
 (a) Novartis shall indemnify, defend and hold harmless the Tanox Indemnitees
from and against any and all Damages to the extent arising from any Third Party claim, action, suit, proceeding or investigation based on: ***** 
  
 (b) Novartis shall indemnify, defend and hold harmless the Genentech Indemnitees from and against any and all Damages to the extent arising from any Third
Party claim, action, suit, proceeding or investigation based on: ***** 
  
 (c) Novartis shall indemnify, defend and hold harmless the Tanox Indemnitees from and against any and all Damages to the extent arising from any ***** 
  

***** 
  
 (d) 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. 
  

 -81- 

 19.4 Indemnification Procedure. For purposes of this Article 19, the Party
requesting indemnification hereunder shall give prompt written notice to the other Parties 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 Article 19, such notice to describe in reasonable detail the basis for the requesting Party’s claim for indemnification and the identity of the indemnifying Party; 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 any 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
Parties to this Agreement (including the obligation to indemnify hereunder) without the prior written consent of all other Parties, which shall not be unreasonably withheld or delayed. All 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. 
  
 19.5 Litigation Costs and Damages. 
  
 (a) Notwithstanding any other provision of this Agreement or the Financial
Appendix (but without limiting the indemnity obligations of the Parties under Sections 19.1 through 19.4 and subject to the treatment of Excluded Costs under the Financial Appendix), the Parties acknowledge and agree that all Damages incurred by
Novartis or Genentech (or their respective Affiliates) 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 or the Outline of Terms in the United States or Europe shall be treated as *****: 
  
 (i) ***** 
  
 (ii) ***** 
  
 (b) Notwithstanding any other provision of this Agreement or the Financial
Appendix (but without limiting the indemnity obligations of the Parties under Sections 19.1 through 19.4 and subject to the treatment of Excluded Costs under the 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 the United States or Europe based on the manufacture, use, sale or import of any Anti-IgE Antibody or Anti-IgE Product 

  

 -82- 

 
(other than any Anti-IgE Antibody or Anti-IgE Product which is not Developed or Commercialized in the US or Europe hereunder), shall be treated as an *****.

  
 19.6 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 20 
  
 MISCELLANEOUS 
  
 20.1 Governing Law; Submission to Jurisdiction. This Agreement shall be governed by and construed in accordance with laws in effect in 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 this Agreement and will waive any claims of forum non
conveniens or objection to the laying of venue in any of such courts for such purpose. 
  
 20.2 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 Genentech, to: 

  
 Genentech, Inc. 
 One DNA Way 
 South San Francisco, California 94080 
 USA

 Attention: Corporate Secretary 
 Telephone: (650) 225-1672 
 Facsimile: (650) 952-9881 
  
 with a required copy to: 
  
 Genentech, Inc. 
 One DNA Way 
 South San Francisco, California 94080 
 USA

 Attention: Vice President of Business Development 
 Telephone: (650) 225-1672 
 Facsimile: (650) 952-9881 
  

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	 	(b)	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 
  

	 	(c)	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. 

 
 20.3 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. 
  
 20.4 Integration and Conflict. This Agreement, together with the
Ancillary Agreements (together with all exhibits and schedules thereto), constitutes the entire agreement of 

  

 -84- 

 
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 any of the Ancillary Agreements or Related Agreements, the provisions of this Agreement shall control as between the Parties with respect to the
subject matter hereof, including with respect to subject matter as to which any other such agreement is silent; provided, however, that: (i) as between Novartis and Genentech only, to the extent that this Agreement is silent as to a
matter expressly dealt with in the JCA, the terms of the JCA shall prevail; and (ii) as between Novartis and Tanox only, to the extent that this Agreement is silent as to a matter expressly dealt with in the Ancillary D&L Agreement, the terms of
the Ancillary D&L Agreement shall prevail. 
  
 20.5
Amendments. No provision in this Agreement shall be supplemented, deleted or amended except in a writing executed by each of the Parties. 
  
 20.6 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, 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 20.6, this Agreement may only be assigned together with the Ancillary Agreements and such rights under Related Agreements as are directly related to the subject matter of this
Agreement.  
  
 20.7 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. 
  

20.8 Exhibits and Schedules Incorporated. The Exhibits and Schedules annexed hereto are 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 Exhibit or Schedule. 
  
 20.9 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. 
  
 20.10 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 

  

 -85- 

 
provided under this Agreement. No waiver of any provision of this Agreement will be effective unless made in writing and signed by an authorized
representative of the waiving Party. 
  
 20.11
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 multiple separate counterparts and attached to a single counterpart so that all
signature pages are physically attached to the same document. 
  
 20.12 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. 
  
 20.13 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 or the Ancillary Agreements, 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 Ancillary Agreement or any excerpt hereof or thereof, proposed to be filed with any securities regulatory authority or
any securities exchange) to the other Parties and their counsel as far as possible 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 (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 ***** 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 

  

 -86- 

 
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 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 commercially sensitive portions of this Agreement or any Ancillary 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. 
  
 20.14 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. 
  
 20.15 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. 
  

 -87- 

 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

	
	 GENENTECH, INC.

		
	By:	 	 
	 	 	

	 	 	 Name: Arthur D. Levinson

	 	 	 Title: Chief Executive Officer and President

	
	 TANOX, INC.

		
	By:	 	 
	 	 	

	 	 	 Name: Nancy T. Chang

	 	 	 Title: President and Chief Executive Officer

  

 1 

 SCHEDULE A 
  

FINANCIAL APPENDIX 
  

 SCHEDULE B 
  

Tanox Anti-IgE Patents and Applications 
  
 ***** 
  

 SCHEDULE B 
  

 SCHEDULE C 
  

INTER-PARTY AGREEMENTS 
  
 ***** 
  

 SCHEDULE D 
  

TRANSITIONAL ARRANGEMENTS 
  
 Notwithstanding anything in this Schedule D, the Parties rights and obligations with respect to the assumption of Manufacturing activities and the transfer of
Manufacturing technology shall not apply if and for so long as the Terminating Party(ies) or Technology Party(ies) elect to continue to Manufacture and supply Active Products hereunder; provided, however, (1) that the foregoing shall
not limit any licenses granted below with respect to any Anti-IgE Patents for any Anti-IgE Product which is not an Active Product Manufactured by the Terminating Party(ies); and (2) that the Terminating Party shall be obliged to continued to fulfill
all obligations to the applicable Public Authorities with respect to such continuing Manufacture. 
  
 PART 1 – TERMINATION AS TO BOTH NOVARTIS AND GENENTECH 
  
 In the event that both Novartis and Genentech terminate this Agreement as set forth in Section 18.3(c), the Terminating
Party(ies) 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, Development and Commercialization of the
Anti-IgE Products then being Commercialized or Developed hereunder (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 following: 
  
 (i) License Grants and Intellectual Property. 
  
 (A) Subject to Tanox’s compliance with the applicable surviving terms and conditions of this Agreement
as set forth in this Part 1 of Schedule D and in Section 18.4(d) and Section 18.6, Tanox shall have an exclusive (as to Anti-IgE Antibodies and Anti-IgE Products), Worldwide license (which shall include the right to grant sublicenses) from the
Terminating Party(ies) to develop, make, have made (in the case of making and having made, subject to paragraph (vii) below), use, import, offer to sell and sell Anti-IgE Products and Anti-IgE Antibodies under the Anti-IgE Patents, Company
Information and Know-How Controlled by the Terminating Party(ies) existing at the effective date of termination, which Anti-IgE Patents, Company Information and Know-How are reasonably required, or to the extent they are used by the Terminating
Party(ies) or its (or their) licensee or sublicensee as at the effective date of termination, to Develop, make, have made, use, import, offer to sell and sell Active Products. The foregoing license: 
  
 (1) shall not extend to patents, patent applications,
know-how, and materials not in existence as of the date of termination, but shall include patents claiming priority back to any patents or patent applications covering Active Products as of the effective date of termination; and 
  
 (2) shall extend to patents, patent applications, know-how,
and materials only to the extent the Terminating Party(ies) has the right to grant such 

  

 SCHEDULE D 
  

 
right without incurring any royalty or other payment obligation to any Third Party (or significant diminution of the Terminating Party(ies) rights if a
direct license is available) with respect thereto, unless Tanox agrees to fully reimburse such royalty or other payment obligation in which case such Third Party rights shall be included in the license grant to the extent of the Terminating
Party(ies) rights to do so; and 
  
 *****

  
 C. Notwithstanding the foregoing or anything
to the contrary in this Agreement, Tanox shall not have any right or license under Genentech’s intellectual property rights to Manufacture Anti-IgE Antibodies or Anti-IgE Products in East Asia or Rest of World, except in any country in which
such Anti-IgE Product is then being Manufactured, or with Genentech’s express approval. Without limiting the express technology transfer and information sharing provisions expressly contained in this Part 1 of Schedule D, the Parties
acknowledge and agree that none of the foregoing licenses granted pursuant to this Part 1 of Schedule D shall in any way expand the Parties’ respective obligations to disclose information and materials as described in Section 4.4 of this
Agreement (assuming that the Agreement had not been terminated). ***** 
  
 D. Tanox shall have semi-exclusive rights to enforce, at its own expense, any Anti-IgE Specific Patents Controlled by the Terminating Party(ies) as of the effective date of termination and retain any proceeds
therefrom, and Genentech and Novartis shall provide reasonable cooperation with respect thereto at Tanox’s expense. In the event the Terminating Party that Controls such Anti-IgE Specific Patents, if other than Tanox, also desires to enforce
such patents, Tanox and the Terminating Party(ies) shall cooperate in pursuing such enforcement, and the costs and proceeds therefrom shall be equitably shared. Tanox shall also have rights to prosecute and maintain such Anti-IgE Specific Patents in
the event Genentech or Novartis, as the case may be, Abandons such Anti-IgE Specific Patents. The Parties shall continue to be bound by their respective confidentiality obligations under Article 15 for so long as Tanox continues to Develop or
Commercialize Anti-IgE Products. 
  
 (ii) Approvals. The
Terminating Party(ies) shall transfer and assign to Tanox (or its nominee) all Approvals and regulatory filings made or obtained by the Terminating Party(ies) or its Affiliates or any of its sublicensees with respect to the Active Products (other
than Approvals for manufacturing facilities). 
  
 (iii)
Trademarks. The Terminating Party(ies) shall assign and transfer to Tanox (or its nominee) the Terminating Party’s entire right, title and interest in and to all Anti-IgE Trademarks, including applications therefore that had been filed
as of the effective date of termination with respect to such Terminating Party(ies), and to any domain names containing such Anti-IgE Trademarks. 
  
 (iv) Copies of Information. The Terminating Party(ies) shall provide to Tanox (or its nominee) a copy (or originals to the extent required by any
Public Authority in connection with the Manufacture, Development or Commercialization of the Anti-IgE Product(s)) of all 

  

 SCHEDULE D 
  

 
information (including any Company Information) and Know-How in its possession or under its control as of the effective date of termination to the extent
necessary for or material to continuing the Development, Manufacture or Commercialization of any Active Product, including, without limitation, all information contained in the regulatory and/or safety databases, all in the format then currently
maintained by the Terminating Party(ies), or such other format as may be reasonably requested by Tanox. Tanox shall be entitled to use and disclose any such information (including any such Company Information) in connection with the Manufacture,
Development and Commercialization of any Active Product; subject to Article 15. Nothing in this clause (iv) shall require the Terminating Party(ies) to provide Company Information or Know-How that 
  
 A it would not be required to share with another Party who
had Worldwide rights to Develop, Manufacture or Commercialize the Active Product, under Section 4.4 of the TCA, assuming the TCA had not been terminated, unless the Terminating Party was using such Company Information or Know-How in the Development,
Manufacture or Commercialization of the Active Product at the time of termination; or 
  
 B has already been provided to Tanox, in written form, pursuant to its participation in Committee meetings prior to the effective date of
termination. 
  
 To the extent any information in the nature of the foregoing is
not available from a Terminating Party, the other Party shall provide such information to Tanox, to the extent it has the right to do so and to the extent that such information is readily accessible to such Party. 
  
 (v) Third Party Manufacturing. To the extent the Active Product is
being Manufactured by a Third Party as of the date notice of termination is given with respect to such Terminating Party(ies), then the Terminating Party(ies) shall use commercially reasonable efforts to assign to Tanox each Terminating Party’s
rights with respect to the Active Product under its agreement with the Third Party manufacturer, and Tanox shall perform all of such Terminating Party’s obligations under each such agreement in so far as they relate to the Active Product from
and after the effective date of termination. 
  
 (vi)
Assignment of Sublicenses. The Terminating Party(ies) shall use commercially reasonable efforts to assign to Tanox any applicable sublicenses to the extent related to Active Products and/or subcontracts relating to significant services to be
performed by Third Parties to the extent related to Manufacture, Development or Commercialization of Active Products, as reasonably requested by Tanox, and Tanox shall perform all of the applicable Terminating Party’s obligations under each
such sublicense in so far as they relate to the Active Product. 
  
 (vii) Manufacture. Without limiting the other rights and obligations of the Terminating Party(ies) under this Part 1 of Schedule D, each Terminating Party that is Manufacturing an Active Product on the effective date of termination
with respect to such Terminating Party(ies) shall continue to comply with its obligations to Manufacture the applicable Active Product under Article 10 herein and the Manufacturing and Supply Agreement(s), unless it provides written notice to Tanox
that it does not intend to continue to Manufacture and supply to Tanox such Active Product. After such Terminating Party(ies) provides such notice to Tanox, such Terminating Party(ies) will supply Tanox with Clinical Requirements and Commercial
Requirements of such finished and packaged Active Product(s) at the same price and other terms 

  

 SCHEDULE D 
  

 
and conditions as the Terminating Party(ies) was supplying, or in the absence of termination, would have been required to supply of such finished and
packaged Active Product (under Article 10 hereof), until ***** of the date of Tanox’s receipt of such notice, and, if Tanox so requests no more than ***** after the date it received such notice, for *****, provided that the price at
which such Active Products will be supplied for such ***** and other terms and conditions on which such Active Products will be supplied for ***** shall be reasonable and customary as determined by good faith negotiations between the Parties,
provided further that such ***** is subject to the reasonable cooperation of the Manufacturing Party. Notwithstanding the foregoing, in no event shall a Terminating Party be obligated to Manufacture a higher volume of Active Product than (A)
the reserved Manufacturing capacity in the Manufacturing facility(ies) of the Terminating Party, or its Affiliate(s) or sublicensee(s), as set forth in the Manufacturing and Supply Plan or other equivalent three year Manufacturing plan, with respect
to the ***** of the transition period, and (B) the average of such Manufacturing capacity reserved for the ***** of the transition period, with respect to the ***** of the transition period. Subject to the foregoing, Genentech’s obligations
under the Manufacturing and Supply Agreement, and the Terminating Party’s obligations under Section 10.3 of this Agreement and Sections 5.2(a) and 5.2(c) of the JCA and all other related provisions (if any) under the Ancillary Agreements shall
terminate. The applicable Manufacturing and Supply Agreement shall terminate at the end of such ***** period, as applicable. 
  
 (viii) Technology Transfer. During the ***** transition period, as applicable, described in paragraph (vii) above, the Parties shall agree upon and
implement a reasonable technology transfer plan pursuant to an appropriate technology transfer agreement between the Party(ies) Controlling the technology to be transferred (whether such Party has previously terminated this Agreement or is a
Terminating Party for purposes of this Schedule D, the “Technology Party”), any Terminating Party and Tanox, to enable Tanox or a chosen contract manufacturer (reasonably acceptable to the applicable Terminating Party(ies) and the
Technology Party(ies)) to Manufacture the applicable Active Product following the cessation of the foregoing supply period without interruption in supply requirements. Such technology transfer agreement shall include an obligation on the Terminating
Party(ies) to physically transfer such technology and a license from the Technology Party and the Terminating Party(ies) to Manufacture such Active Product in the United States or Europe under Anti-IgE Patents, Company Information, and Know-How
Controlled by the Terminating Party(ies) at the effective date of termination (or, if the Technology Party is not a Terminating Party, by the Technology Party as of the effective date of its termination of the Agreement) which are reasonably
required, or to the extent they are used as at the effective date of termination, to Manufacture Active Products. Such license shall not be sublicensable; however, if, at a later date, Tanox desires to change contract manufacturers, the Technology
Party and Terminating Party shall allow the assignment of such technology transfer agreement with such new contract manufacturer, provided that there shall be no obligation on the Terminating Party(ies) to physically transfer such technology
for a second time and that such new manufacturer is reasonably acceptable to the Technology Party. Such license 
  
 A shall not extend to patents, patent applications, know-how, and materials not in existence as of the date of termination, but shall
include patents claiming priority 

  

 SCHEDULE D 
  

 
back to any patents or patent applications covering Active Products as of the effective date of termination; and 
  
 B shall extend to patents, patent applications, know-how,
and materials only to the extent the Terminating Party(ies) has the right to grant such right without incurring any royalty or other payment obligation to any Third Party with respect thereto, unless Tanox agrees to fully reimburse such royalty or
other payment obligation in which case such Third Party rights shall be included in the license grant to the extent of the Terminating Party(ies) rights to do so. 
  
 For the avoidance of doubt, if Genentech is not a Terminating Party for purposes of this Schedule D, Novartis shall not provide to Tanox the
information and materials received by it from Genentech under the Technology Transfer Agreement unless: (1) Genentech has given its written consent thereto, or (2) Genentech has not agreed in writing (with copies to both Novartis and Tanox), within
***** after Genentech’s receipt of a copy of the Novartis notice to Tanox under clause (vii) above, to comply with the provisions of this clause (viii), and to transfer such information and materials to Tanox, as if Genentech were a Terminating
Party hereunder. 
  
 (ix) General. Without limitation of
the generality of the foregoing, the Parties shall use commercially reasonable efforts to complete the transition of the Manufacture, Development and Commercialization of any Active Products hereunder to Manufacture, Development, Commercialization
of such Active Products solely by Tanox or its designees as soon as is reasonably possible. For the avoidance of doubt, except as set forth in paragraph (i) above and Section 18.3(d) of this Agreement, Tanox shall not be required to provide the
Terminating Party(ies) any consideration in exchange for the licenses or other rights granted to it pursuant to the provisions of this Part 1 of Schedule D; provided, however, that Tanox shall (A) be solely responsible for paying any
royalties, fees or other consideration that the Terminating Party may be obligated to pay to a Third Party in respect of any such transfer or sublicense to Tanox of such licenses or other rights and (B) be obligated to pay for Active Product
supplied to it by a Terminating Party in the manner set forth in clause (vii) above. At such time as all of the obligations in clauses (ii) through (viii) shall have been performed by the Terminating Party(ies), Tanox and the Terminating Party(ies)
shall so agree in writing. 
  
 PART 2 –
TERMINATION AS TO GENENTECH ONLY 
  
 In the event that this
Agreement is terminated as to Genentech only, as set forth in Section 18.2, 18.3(a) or 18.5 *****, Genentech shall provide all cooperation and assistance reasonably requested by Novartis to enable Novartis (or its designee) to assume with as little
disruption as reasonably possible, the continued Manufacture, Development and Commercialization of the Anti-IgE Products then being Commercialized or Developed hereunder (the “Active Products”). 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 following: 
  
 (i) License Grants and Intellectual Property. 
  

 SCHEDULE D 
  

 A. Subject to Novartis’ compliance with the applicable surviving terms and
conditions of this Agreement as set forth in this Part 2 of Schedule D and Section 18.6 of this Agreement, and subject to Tanox’s rights under this Agreement and the Ancillary D&L Agreement, the license grants to Novartis under Section 11.1
of the JCA shall survive, and in addition, Novartis shall have an exclusive (as to Anti-IgE Antibodies and Anti-IgE Products), Worldwide license (which shall include the right to grant sublicenses) from Genentech to develop, make, have made (in the
case of making and having made, subject to paragraph vi below), use, import, offer to sell and sell Anti-IgE Products and Anti-IgE Antibodies under the Anti-IgE Patents, Company Information and Know-How Controlled by Genentech existing at the
effective date of termination, which Anti-IgE Patents, Company Information and Know-How are reasonably required, or to the extent they are used by a Party or its licensee or sublicensee as at the effective date of termination, to Develop, make, have
made, use, import, offer to sell and sell Active Products. The foregoing license: 
  
 (1) shall not extend to patents, patent applications, know-how, and materials not in existence as of the date of termination, but shall
include patents claiming priority back to any patents or patent applications covering Active Products as of the effective date of termination; and 
  
 (2) shall extend to patents, patent applications, know-how, and materials only to the extent Genentech has the right to grant such right
without incurring any royalty or other payment obligation to any Third Party (or significant diminution of the Genentech’s rights if a direct license is available) with respect thereto, unless Novartis agrees to fully reimburse such royalty or
other payment obligation in which case such Third Party rights shall be included in the license grant to the extent of Genentech’s rights to do so. 
  
 B. Notwithstanding the foregoing or anything to the contrary in this Agreement, Novartis shall not have any right or license under
Genentech’s intellectual property rights to Manufacture Anti-IgE Antibodies or Anti-IgE Products in East Asia or Rest of World except in any country in which such Anti-IgE Product is then being Manufactured, or with Genentech’s express
approval. Without limiting the express technology transfer and information sharing provisions expressly contained in this Part 2 of Schedule D, the Parties acknowledge and agree that none of the foregoing licenses granted pursuant to this Part 2 of
Schedule D shall in any way expand the Parties’ respective obligations to disclose information and materials as described in Section 4.4 of this Agreement (assuming that the Agreement had not been terminated). 
  
 C. Subject to Tanox’s rights under this Agreement and
the Ancillary D&L Agreement, Novartis shall have semi-exclusive rights to enforce, at its own expense, any Anti-IgE Specific Patents Controlled by Genentech as at the effective date of termination and retain any proceeds therefrom, and Genentech
shall provide reasonable cooperation with respect thereto at Novartis’ (and Tanox’s, as applicable) expense. In the event Genentech also desires to enforce such patents, Novartis (and Tanox, to the extent it has rights of enforcement under
this Agreement) and Genentech shall cooperate in pursuing such enforcement, and the costs and proceeds therefrom shall be equitably shared. 

  

 SCHEDULE D 
  

 
Subject to Tanox’s rights under this Agreement and the Ancillary D&L Agreement, Novartis shall also have rights to prosecute and maintain such
Anti-IgE Specific Patents in the event Genentech Abandons such Anti-IgE Specific Patents. The Parties shall continue to be bound by its confidentiality obligations under Article 15 for so long as Novartis and/or Tanox continues to Develop or
Commercialize Anti-IgE Products. 
  
 (ii) Approvals.
Genentech shall transfer and assign to Novartis (or its nominee) all Approvals and regulatory filings made or obtained by Genentech or its Affiliates or any of its sublicensees with respect to the Active Products (other than Approvals for
manufacturing facilities). 
  
 (iii) Copies of Information.
Genentech shall provide to Novartis (or its nominee) a copy (or originals to the extent required by any Public Authority in connection with the Manufacture, Development or Commercialization of the Anti-IgE Product(s)) of all information (including
any Company Information) and Know-How in its possession or under its control as of the effective date of termination to the extent necessary for or material to continuing the Development, Manufacture or Commercialization of any Active Product,
including, without limitation, all information contained in the regulatory and/or safety databases, all in the format then currently maintained by Genentech, or such other format as may be reasonably requested by Novartis. Novartis shall be entitled
to use and disclose any such information (including any such Company Information) in connection with the Manufacture, Development and Commercialization of any Anti-IgE Antibody or Anti-IgE Product; subject to Article 15. Nothing in this clause (iii)
shall require Genentech to provide Company Information or Know-How that 
  
 A it would not be required to share with another Party who had Worldwide rights to Develop, Manufacture or Commercialize the Active Product, under Section 4.4 of the TCA, assuming the TCA had not been terminated,
unless Genentech was using such Company Information or Know-How in the Development, Manufacture or Commercialization of the Active Product at the time of termination; or 
  
 B has already been provided to Novartis, in written form, pursuant to its participation in Committee
meetings prior to the effective date of termination. 
  
 (iv)
Third Party Manufacturing. To the extent any Active Product is being Manufactured by a Third Party under contract to Genentech as of the date notice of termination is given, then Genentech shall use commercially reasonable efforts to assign
to Novartis all of Genentech’s rights with respect to the Active Product under its agreement with the Third Party manufacturer, and Novartis shall perform all of Genentech’s obligations under each such agreement in so far as they relate to
the Active Product Manufactured thereunder after the effective date of such assignment. 
  
 (v) Assignment of Sublicenses. Genentech shall use commercially reasonable efforts to assign to Novartis any applicable sublicenses to the extent related to Active Products and/or subcontracts relating to
significant services to be performed by Third Parties to the extent related to Manufacture, Development or Commercialization of Active Products, as reasonably requested by Novartis, and Novartis shall perform all of Genentech’s obligations
under each such 

  

 SCHEDULE D 
  

 
sublicense after the effective date of such assignment in so far as they relate to the Active Product. 
  
 (vi) Manufacture. Without limiting Genentech’s other rights and
obligations under this Part 2 of Schedule D, if Genentech is Manufacturing an Active Product on the effective date of termination, it shall continue to comply with its obligations to Manufacture the applicable Active Product under Article 10 herein
and the Manufacturing and Supply Agreement(s), unless it provides written notice to Novartis that it does not intend to continue to Manufacture and supply to Novartis such Active Product. In the event that Genentech provides such notice to Novartis,
Genentech will supply Novartis with Clinical Requirements and Commercial Requirements of such finished and packaged Active Product(s) at the same price and other terms and conditions as Genentech was supplying, or in the absence of termination,
would have been required to supply of such finished and packaged Active Product (under Article 10 hereof), until ***** the date of Novartis’ receipt of such notice, and, if Novartis so requests no more than ***** after the date it received such
notice, for *****, provided that the price at which such Active Products will be supplied for such ***** and other terms and conditions on which such Active Products will be supplied for ***** shall be reasonable and customary as determined
by good faith negotiations between the Parties, provided further that such ***** is subject to the reasonable cooperation of Genentech. Notwithstanding the foregoing, in no event shall Genentech be obligated to Manufacture a higher volume of
Active Product than (i) the reserved manufacturing capacity in the manufacturing facility(ies) of Genentech, its Affiliate(s) or sublicense(s) as set forth in the Manufacturing and Supply Plan, with respect to the ***** of the transition period, and
(ii) the average of such manufacturing capacity reserved for the ***** of the transition period, with respect to the ***** of the transition period. Subject to the foregoing, Genentech’s obligations under Section 10.3 of this Agreement, the
Manufacturing and Supply Agreement and Sections 5.2(a) and 5.2(c) of the JCA and all other related provisions (if any) under the Ancillary Agreements shall terminate. The applicable Manufacturing and Supply Agreement shall terminate at the end of
such ***** period, as applicable. 
  
 (vii) Technology
Transfer. Unless Novartis is, at the effective date of termination, also Manufacturing the same Active Products as are then being Manufactured by Genentech, during the***** transition period, as applicable, described in paragraph (vi) above,
Novartis and Genentech shall agree upon and implement a reasonable technology transfer plan pursuant to an appropriate technology transfer agreement between Novartis and Genentech, to enable Novartis or a chosen contract manufacturer (reasonably
acceptable to Genentech) to Manufacture the applicable Active Product following the cessation of the foregoing supply period without interruption in supply requirements. Such technology transfer agreement shall include a license from Genentech to
Manufacture such Active Product under Anti-IgE Patents, Company Information, and Know-How Controlled by Genentech and existing at the effective date of termination which are reasonably required, or to the extent they are used as at the effective
date of termination, to Manufacture Active Products. Such license shall not be sublicensable; however, if, at a later date, Novartis desires to change contract manufacturers, Genentech shall allow the assignment of such technology transfer agreement
with such new contract manufacturer, provided that there shall be no obligation on Genentech to physically transfer such technology for a second time and that such new manufacturer is reasonably acceptable to Genentech. Such license

  

 SCHEDULE D 
  

 A shall not extend to patents, patent applications, know-how, and materials not in
existence as of the date of termination, but shall include patents claiming priority back to any patents or patent applications covering Active Products as of the effective date of termination; and 
  
 B shall extend to patents, patent applications, know-how,
and materials only to the extent Genentech has the right to grant such right without incurring any royalty or other payment obligation to any Third Party with respect thereto (unless Novartis agrees to fully reimburse such royalty or other payment
obligation in which case such Third Party rights shall be included in the license grant to the extent of Genentech’s rights to do so). 
  
 (vii) General. Without limitation of the generality of the foregoing, the Parties shall use Commercially Reasonable Efforts to complete the
transition of the Manufacture, Development and Commercialization of any Active Products hereunder to Manufacture, Development, Commercialization of such Active Products solely by Novartis or its designees as soon as is reasonably possible. For the
avoidance of doubt, except as set forth in paragraph (i) above, Novartis shall not be required to provide Genentech any consideration in exchange for the licenses or other rights granted to it pursuant to the provisions of this Part 2 of Schedule D;
provided, however, that Novartis shall (A) be solely responsible for paying any royalties, fees or other consideration that Genentech may be obligated to pay to a Third Party in respect of any such transfer or sublicense to Novartis of
such licenses or other rights and (B) be obligated to pay for Active Product supplied to it by Genentech in the manner set forth in clause (vi) above. At such time as all of the obligations in clauses (ii) through (vii) shall have been performed by
Genentech, Genentech and Novartis shall so agree in writing.  
  
 PART 3 – TERMINATION AS TO NOVARTIS ONLY 
  
 In the event that this Agreement is terminated as to Novartis only, as set forth in Section 18.2, 18.3(b) or 18.5, Novartis shall: (a) 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 Development and Commercialization in East Asia and the ROW of the Anti-IgE Products then being Commercialized or Developed hereunder (the
“Active Products”); and (b) provide all cooperation and assistance reasonably requested by Genentech to enable Genentech (or its designee) to assume with as little disruption as reasonably possible, the continued Manufacture,
Development and Commercialization in the US and Europe of the Active Products. Accordingly, for purposes of this Part 3 of Schedule D, Tanox shall be the “Assignee” with respect to rights in East Asia and the ROW and Genentech shall
be the “Assignee” with respect to rights in the US and Europe. 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 following: 
  
 (i)
License Grants and Intellectual Property. 
  
 A Subject to the applicable Assignee’s compliance with the applicable surviving terms and conditions of this Agreement as set forth in this Part 3 of Schedule D and Section 18.6 of this Agreement, the applicable Assignee shall have an
exclusive (as 

  

 SCHEDULE D 
  

 
to Anti-IgE Antibodies and Anti-IgE Products) license (which shall include the right to grant sublicenses) from Novartis in the applicable regions to
develop, make, have made (in the case of making and having made, subject to paragraph vii below), use, import, offer to sell and sell Anti-IgE Products and Anti-IgE Antibodies under the Anti-IgE Patents, Company Information and Know-How Controlled
by Novartis existing at the effective date of Novartis’ termination which Anti-IgE Patents, Company Information and Know-How are reasonably required, or to the extent they are used by a Party or its licensee or sublicensee as at the effective
date of termination, to Develop, make, have made, use, import, offer to sell and sell Active Products. The foregoing license: 
  
 (1) shall not extend to patents, patent applications, know-how, and materials not in existence as of the date of termination, but shall
include patents claiming priority back to any patents or patent applications covering Active Products as of the effective date of Novartis’ termination); and 
  
 (2) shall extend to patents, patent applications, know-how, and materials only to the extent Novartis has
the right to grant such right without incurring any royalty or other payment obligation to any Third Party (or significant dimunition of the Genentech’s rights if a direct license is available) with respect thereto, unless Genentech or Tanox,
as the case may be, agrees to fully reimburse such royalty or other payment obligation applicable to its respective territory, in which case such Third Party rights shall be included in the license grant to the extent of Novartis’ rights to do
so. 
  
 B Notwithstanding the foregoing or
anything to the contrary in this Agreement, Tanox shall not have any right or license under Genentech’s intellectual property rights to Manufacture Anti-IgE Antibodies or Anti-IgE Products in East Asia or Rest of World except in any country in
which such Anti-IgE Product is then being Manufactured, or with Genentech’s express approval. Without limiting the express technology transfer and information sharing provisions expressly contained in this Part 3 of Schedule D, the Parties
acknowledge and agree that none of the foregoing licenses granted pursuant to this Part 3 of Schedule D shall in any way expand the Parties’ respective obligations to disclose information and materials as described in Section 4.4 of this
Agreement (assuming that the Agreement had not been terminated).  
  
 C Genentech and Tanox shall together have semi-exclusive rights to enforce, at their own expense, any Anti-IgE Specific Patents Controlled by Novartis as of the effective date of termination and retain any proceeds
therefrom, and Novartis shall provide reasonable cooperation with respect thereto at Genentech’s and Tanox’s expense. In the event Novartis also desires to enforce such patents, Genentech, Tanox and Novartis shall cooperate in pursuing
such enforcement, and the costs and proceeds therefrom shall be equitably shared. Genentech and Tanox shall also have rights to prosecute and maintain such Anti-IgE Specific Patents in the event Novartis Abandons such Anti-IgE Specific Patents. The
Parties shall continue to be bound by its confidentiality obligations under Article 15 for so long as Genentech and/or Tanox continues to Develop or Commercialize Anti-IgE Products. 
  

 SCHEDULE D 
  

 (ii) Approvals. Novartis shall transfer and assign to the applicable Assignee (or its nominee)
all Approvals and regulatory filings made or obtained by Novartis or its Affiliates or any of its sublicensees with respect to the Active Products (other than Approvals for manufacturing facilities). 
  
 (iii) Trademarks. Novartis shall assign and transfer to the applicable
Assignee (or its nominee) Novartis’ entire right, title and interest in and to all Anti-IgE Trademarks in the applicable region, including applications therefore that had been filed as of the effective date of termination, and to any domain
names containing such Anti-IgE Trademarks in the applicable region. 
  
 (iv) Copies of Information. Novartis shall provide to each Assignee (or its nominee) a copy (or originals to the extent required by any Public Authority in connection with the Manufacture, Development or Commercialization of the
Anti-IgE Product(s)) of all information (including any Company Information) in its possession or under its control as of the effective date of termination to the extent necessary for or material to continuing the Development, Manufacture or
Commercialization of any Active Product, including, without limitation, all information contained in the regulatory and/or safety databases, all in the format then currently maintained by Novartis, or such other format as may be reasonably requested
by the Assignees. The Assignees shall be entitled to use and disclose any such information (including any such Company Information) in connection with the Manufacture, Development and Commercialization of any Active Product; subject to Article 15.
Nothing in this clause (iv) shall require Novartis to provide Company Information or Know-How that 
  
 A it would not be required to share with another Party who had Worldwide rights to Develop, Manufacture or Commercialize the Active
Product, under Section 4.4 of the TCA, assuming the TCA had not been terminated, unless Novartis was using such Company Information or Know-How in the Development, Manufacture or Commercialization of the Active Product at the time of termination; or

  
 B has already been provided to Genentech or
Tanox, as the case may be, in written form, pursuant to its participation in Committee meetings prior to the effective date of termination. 
  
 (v) Third Party Manufacturing. To the extent any Active Product is being Manufactured by a Third Party under contract to Novartis as of the date
notice of termination is given, then Novartis shall use commercially reasonable efforts to assign to Genentech all of Novartis’ rights with respect to the Active Product under its agreement with the Third Party manufacturer, and Genentech shall
perform all of Novartis’ obligations under each such agreement in so far as they relate to the active Product Manufactured thereunder after the effective date of such assignment. 
  
 (vi) Assignment of Sublicenses. Novartis shall use commercially reasonable efforts to assign to the applicable
Assignee any applicable sublicenses to the extent related to Active Products and/or subcontracts relating to significant services to be performed by Third Parties to the extent related to Manufacture, Development or Commercialization of Active
Products, as reasonably requested by the applicable Assignee, and the applicable Assignee shall perform all 

  

 SCHEDULE D 
  

 
of Novartis’ obligations under each such sublicense after the effective date of such assignment in so far as they relate to any Anti-IgE Antibody or
Anti-IgE Product. 
  
 (vii) Manufacture. Without limiting
Novartis’ other rights and obligations under this Part 3 of Schedule D, if Novartis is Manufacturing an Active Product on the effective date of termination, it shall continue to comply with its obligations to Manufacture the applicable Active
Product under Article 10 herein and the Manufacturing and Supply Agreement(s), unless it provides written notice to Genentech and Tanox that it does not intend to continue to Manufacture and supply to Novartis such Active Product. In the event that
Novartis provides such notice to Genentech and Tanox, Novartis will supply Genentech and Tanox with Clinical Requirements and Commercial Requirements of such finished and packaged Active Product(s) at the same price and other terms and conditions as
Novartis was supplying, or in the absence of termination, would have been required to supply of such finished and packaged Active Product (under Article 10 hereof), until ***** the date of Genentech’s and Tanox’s receipt of such notice,
and, if Genentech and Tanox both so request no more than ***** after the date it received such notice, for *****, provided that the price at which such Active Products will be supplied for such ***** and other terms and conditions on which
such Active Products will be supplied for ***** shall be reasonable and customary as determined by good faith negotiations between the Parties, provided further that such ***** is subject to the reasonable cooperation of Novartis.
Notwithstanding the foregoing, in no event shall Novartis be obligated to Manufacture a higher volume of Active Product than (i) the reserved manufacturing capacity in the manufacturing facility(ies) of Novartis, its Affiliate(s) or sublicense(s) as
set forth in the Manufacturing and Supply Plan, with respect to the ***** of the transition period, and (ii) the average of such manufacturing capacity reserved for the ***** of the transition period, with respect to the ***** of the transition
period. Subject to the foregoing, Novartis’ obligations under Section 10.3 of this Agreement, the Manufacturing and Supply Agreement and Sections 5.2(a) and 5.2(c) of the JCA and all other related provisions (if any) under the Ancillary
Agreements shall terminate. The applicable Manufacturing and Supply Agreement shall terminate at the end of such ***** period, as applicable. 
  
 (viii) Technology Transfer. Unless Genentech or Tanox is, at the effective date of termination, also Manufacturing the same Active Products as are
then being Manufactured by Novartis, during the ***** transition period, as applicable, described in paragraph (vii) above, the Parties shall agree upon and implement a reasonable technology transfer plan pursuant to an appropriate technology
transfer agreement between Novartis and one of Genentech and Tanox, to enable Genentech or Tanox or a chosen contract manufacturer (reasonably acceptable to Novartis) to Manufacture the applicable Active Product following the cessation of the
foregoing supply period without interruption in supply requirements. Such technology transfer agreement shall include a license from Novartis to Manufacture such Active Product under Anti-IgE Patents, Company Information, and Know-How Controlled by
Novartis and existing at the effective date of termination which are reasonably required, or to the extent they are used as at the effective date of termination, to Manufacture Active Products. Such license shall not be sublicensable; however, if,
at a later date, Genentech desires to change contract manufacturers, Novartis shall allow the assignment of such technology transfer agreement with such new contract manufacturer, provided that there shall be no obligation on Novartis to
physically 

  

 SCHEDULE D 
  

 
transfer such technology for a second time and that such new manufacturer is reasonably acceptable to Novartis. Such license 
  
 A shall not extend to patents, patent applications,
know-how, and materials not in existence as of the date of termination, but shall include patents claiming priority back to any patents or patent applications covering Active Products as of the effective date of termination; and 
  
 B shall extend to patents, patent applications, know-how,
and materials only to the extent Novartis has the right to grant such right without incurring any royalty or other payment obligation to any Third Party with respect thereto (unless Genentech and/or Tanox agrees to fully reimburse such royalty or
other payment obligation in which case such Third Party rights shall be included in the license grant to the extent of Novartis’ rights to do so). 
  
 (ix) General. Without limitation of the generality of the foregoing, the Parties shall use Commercially Reasonable Efforts to complete the
transition of the Manufacture, Development and Commercialization of any Active Products hereunder to Manufacture, Development, Commercialization of such Active Products by Genentech and Tanox or their respective designees as soon as is reasonably
possible. For the avoidance of doubt, except as set forth in paragraph (d)(i) above, Genentech and Tanox shall not be required to provide Novartis any consideration in exchange for the licenses or other rights granted to them pursuant to the
provisions of this Part 3 of Schedule D; provided, however, that the applicable Assignee shall (A) be solely responsible for paying any royalties, fees or other consideration that Novartis may be obligated to pay to a Third Party in
respect of any such transfer or sublicense to such Assignee of such licenses or other rights and (B) be obligated to pay for Active Product supplied to it by Novartis in the manner set forth in clause (vii) above. At such time as all of the
obligations in clauses (ii) through (viii) shall have been performed by Novartis, Genentech, Novartis and Tanox shall so agree in writing. 
  
 (x) In the event that this Agreement is terminated as to Novartis only, as set forth in Section 18.2, 18.3(b) or 18.5, Genentech and Tanox shall meet and
confer in order to agree upon and establish appropriate cooperation and coordination of Development, Manufacturing and Commercialization efforts hereunder with respect to Anti-IgE Antibodies and Anti-IgE Products in their respective territories.
Such cooperation and coordination shall include creation and implementation of applicable committee(s), adverse event reporting, sharing of information regarding relevant Development, Manufacturing and Commercialization efforts of Genentech and
Tanox, the Manufacture and supply of Anti-IgE Products, mechanisms to prevent improper importation of Anti-IgE Products sold in one country to other countries, and similar matters. ***** 
  

 EXHIBIT A 
  

TANOX RELEASE 
  
 Tanox, Inc. (“Tanox”), for good and valuable consideration, the receipt of which is hereby acknowledged, for itself and for each and every one of its (a)
present or former officers, partners, directors, shareholders, agents, and employees, and (b) affiliates, predecessors, successors, assigns, insurers, parents, wholly-owned subsidiaries, related companies, divisions, attorneys, sureties or other
representatives, release, remise, and forever discharges, unconditionally and without reserve, Novartis Pharma AG (“Novartis”), Genentech Inc. (“Genentech”), and the officers, partners, agents, employees,
affiliates, predecessors, successors, assigns, insurers, or other representatives of Novartis and Genentech from any and all Existing Claims, as defined in the Tripartite Cooperation Agreement By and Between Novartis, Genentech, and Tanox, dated as
of February 25, 2004 (the “Settlement Agreement”). 
  
 Nothing herein shall be construed as or shall constitute a release of the parties’ rights and obligations under the Settlement Agreement, made as of February 25, 2004, or of the parties’ rights and obligations under any Ancillary
Agreements thereto arising on or after February 25, 2004. 
  
 This
release may not be orally modified. 
  

									
	 	 	 	 	 TANOX, INC.

					
	 Dated:
	 	 	 	 	 	 	 	 
	 	 	
	 	 	 	

	 	 	 	 	 	 	 Print Name:
	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Title:
	 	 
	 	 	 	 	 	 	 	 	

  

 EXHIBIT B 
  

GENENTECH RELEASE 
  
 Genentech, Inc. (“Genentech”), for good and valuable consideration, the receipt of which is hereby acknowledged, for itself and for each and every one of
its (a) present or former officers, partners, directors, shareholders, agents, and employees, and (b) affiliates, predecessors, successors, assigns, insurers, parents, wholly-owned subsidiaries, related companies, divisions, attorneys, sureties or
other representatives, release, remise, and forever discharges, unconditionally and without reserve, Tanox, Inc. (“Tanox”), Novartis Pharma AG (“Novartis”), and the officers, partners, agents, employees, affiliates,
predecessors, successors, assigns, insurers, or other representatives of Tanox and Novartis from any and all Existing Claims, as defined in the Tripartite Cooperation Agreement By and Between Novartis, Genentech, and Tanox, dated as of February 25,
2004 (the “Settlement Agreement”). 
  
 Nothing
herein shall be construed as or shall constitute a release of the parties’ rights and obligations under the Settlement Agreement, made as of February 25, 2004, or of the parties’ rights and obligations under any Ancillary Agreements
thereto arising on or after February 25, 2004. 
  
 This release
may not be orally modified. 
  

									
	 	 	 	 	 GENENTECH, INC.

					
	 Dated:
	 	 	 	 	 	 	 	 
	 	 	
	 	 	 	

	 	 	 	 	 	 	 Print Name:
	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Title:
	 	 
	 	 	 	 	 	 	 	 	

  

 EXHIBIT C 
  

NOVARTIS RELEASE 
  
 Novartis Pharma AG (“Novartis”), for good and valuable consideration, the receipt of which is hereby acknowledged, for itself and for each and every one
of its (a) present or former officers, partners, directors, shareholders, agents, and employees, and (b) affiliates, predecessors, successors, assigns, insurers, parents, wholly-owned subsidiaries, related companies, divisions, attorneys, sureties
or other representatives, release, remise, and forever discharges, unconditionally and without reserve, Tanox, Inc. (“Tanox”), Genentech Inc. (“Genentech”), and the officers, partners, agents, employees, affiliates,
predecessors, successors, assigns, insurers, or other representatives of Tanox and Genentech from any and all Existing Claims, as defined in the Tripartite Cooperation Agreement By and Between Novartis, Genentech, and Tanox, dated as of February 25,
2004 (the “Settlement Agreement”). 
  
 Nothing
herein shall be construed as or shall constitute a release of the parties’ rights and obligations under the Settlement Agreement, made as of February 25, 2004, or of the parties’ rights and obligations under any Ancillary Agreements
thereto arising on or after February 25, 2004. 
  
 This release
may not be orally modified. 
  

									
	 	 	 	 	 NOVARTIS PHARMA AG

					
	 Dated:
	 	 	 	 	 	 	 	 
	 	 	
	 	 	 	

	 	 	 	 	 	 	 Print Name:
	 	 
	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Title:
	 	 
	 	 	 	 	 	 	 	 	

  

 EXHIBIT D 
  

JOINT MOTIONS/REQUESTS FOR DISMISSAL 
  

 EXHIBIT E 
  

***** 
  

 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 
  
 FINANCIAL APPENDIX 
  

 SCHEDULE A 
  
 Financial Planning, Accounting and Reporting 
 For the Tripartite Cooperation Agreement 
  
 TABLE OF CONTENTS 
  

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

  
 This financial appendix (the
“Financial Appendix”) is Schedule A attached to and incorporated into the Tripartite Cooperation Agreement (the “Agreement”) dated as of February 25, 2004 by and among Novartis Pharma AG (“Novartis”),
Genentech, Inc. (“Genentech”) and Tanox, Inc. (“Tanox”) (each also singularly referred to herein as a “Party” and collectively as the “Parties”). 
  
 This Financial Appendix covers the financial planning, accounting practices and procedures to be followed in determining the
“Net Sales” and the “Net Profit” or “Net Loss” (as defined below) and related payment of royalties and sharing of revenue and costs and expenses in the U.S. and Europe pursuant to the Agreement. For such purpose, this
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 “GenNov” (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, auditing of accounts and other matters. The consolidated accounting construct consisting of certain Genentech and Novartis
operations under the Agreement will be referred to as “GenNov”. It should be noted that “GenNov” is not a legal entity and has been defined for identification purposes only. 
  
 The functionality of “GenNov” relates only to the “United States” and
“Europe” (as defined in the Agreement), and largely to the operations of Genentech and Novartis. Thus,
references in this Financial Appendix to a “GenNov Party” or “GenNov Parties” shall be construed to mean Genentech and/or Novartis (and its Affiliates), as the case may be (but not Tanox), for purposes of this Financial
Appendix and the Agreement, including the application of the financial definitions herein. “GenNov” is a virtual account and not a separate auditable entity. 
  
 This 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 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 Financial Appendix and the Agreement, the terms and provisions of the Agreement shall govern. 
  

 i 

 The contents of this 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 

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

							
	For the United States	 	Novartis	 	Genentech	  	Total
	Gross Sales (U.S.)	 	 	 	 	  	 
	less *****	 	 	 	 	  	 
				
	=            Net Sales (U.S.)	 	 	 	 	  	 
	less *****	 	 	 	 	  	 
				
	=            Gross Profit (U.S.)	 	 	 	 	  	 
	              less *****	 	 	 	 	  	 
	              *****	 	 	 	 	  	 
		
	=            Net Profit (U.S.) or Net Loss (U.S.) for purpose of GenNov profit share;	  	 

  
 and 
 For Novartis and Tanox only: 
  
 Novartis’ share of Net Profit (U.S.) in accordance with the Agreement and this Financial Appendix; 
  
             less *****. 
  
 =         Net Profit (TANOX) for purpose of calculating the Tanox Profit Share 
  

							
	For Europe	 	Novartis	 	Genentech	  	Total
	Gross Sales (EUR)	 	 	 	 	  	 
	less *****	 	 	 	 	  	 
				
	=            Net Sales (EUR)	 	 	 	 	  	 
	              less *****	 	 	 	 	  	 
				
	=            Gross Profit (EUR)	 	 	 	 	  	 
	              less *****	 	 	 	 	  	 
	              less *****	 	 	 	 	  	 
			
	 =            Net Profit (EUR) or Net Loss (EUR)
               for purpose of GenNov profit share
	 	 	  	 

  
 It is the intention of
Genentech, Novartis and Tanox that the interpretation of these definitions and other matters under this Financial Appendix will be: (a) consistent with the U.S. generally accepted accounting principles (“GAAP”) consistently applied
for Genentech; and (b) international accounting standards as consistently applied (“IAS”) for Novartis. The 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 GenNov as set forth in this Financial Appendix. 
  

 ii 

 For purposes of the definitions in this 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 Financial Appendix. 
  
 Notwithstanding anything to the contrary in the Agreement or this
Financial Appendix (but without limiting any of the provisions in Article 19 (Indemnity and Insurance) of the Agreement), 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 (U.S.), Net Profits (EUR) or Net Profits (TANOX) (or the corresponding Net Losses, as the case may be), to be shared under the Agreement or this Financial Appendix. 
  

	2.	Duties of the Finance Sub-Committee 

  
 As set forth in the Agreement, the Finance Sub-Committee (FSC) of the JCC shall support the JCC and the 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 Financial Appendix. The FSC shall be responsible for review and administration of operations
under this Financial Appendix, including reviewing and recommending for approval by the JCC and JMC financial statements of GenNov and including reviewing and advising the JCC and the JMC with respect to the following matters, all in
accordance with the terms of the Agreement and this Financial Appendix: 
  
 (i) coordination and reporting of actual and forecasted financial results for Anti-IgE Products in the U.S. on a ***** as provided herein;

  
 (ii) coordination on preparation, approval
and administration of US and Europe budgets and forecasts for Development and Commercialization of Anti-IgE Products in the U.S. and Europe, and Worldwide budgets and forecasts for manufacturing of Anti-IgE Products Worldwide, by the US Brand Team
and the Europe Brand Team, and by the E/US DSC, the MLSC, the JCC and the JMC, 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 the United States and Europe; 
  

 iii 

 (iv) modification of reporting cycles and deadlines under this 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 GenNov 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 JCC and the JMC, whether such costs and expenses are authorized to be shared by the Parties (or reimbursed
to Tanox, as and if applicable) 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, in accordance with Section 9.7 of the JCA (relating to sales force costs to be borne by one Party thereunder), and in accordance with the definition of “Excluded Costs” in Section 1 of this Financial Appendix);

  
 (vi) review of appropriate allocation of
costs and expenses to the various cost and expense categories under Section 5 below, and between the U.S. and European territories (with input from the US Brand Team and Europe Brand Team), and review of appropriate allocation of manufacturing
costs, expenses and payments under Section 11.6(b) between the U.S., Europe, East Asia and ROW; 
  
 (vii) review and assistance in calculation of Net Profits (U.S.) and Net Profits (EUR) (and corresponding Net Losses), subject to JMC
approval, and coordination with respect to means balancing and other payments between the Parties hereunder; 
  
 (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
GenNov reporting; 
  
 (x) from time to time,
monitor whether reimbursement of General and Administrative Expenses (U.S.), as provided for in this Financial Appendix, is in proportion to each Party’s relative effort in managing outside vendors, in coordination with the U.S. Brand
Team; 
  
 (xi) review and coordination in
connection with payment of any Tanox Costs and Expenses, and exchange of information (including Sales Costs (U.S.) and other information as provided below) between the Parties as necessary to allow Genentech and Novartis to meet their respective
payment obligations to Tanox); 
  
 (xii) review
of production plans and inventory levels (which shall be reported to the FSC as provided in the Manufacturing and Supply Agreement(s)); 
  
 (xiii) review of ***** (subject to the terms of the Manufacturing and Supply Agreement(s) and to this Financial Appendix) and other
items to be included in*****, subject to JCC and JMC approval as provided below; 
  

 iv 

 (xiv) 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; 
  

(xv) coordination of the presentation of disputes arising between the Parties under the Financial Appendix, for resolution in
accordance with the terms of the Agreement; 
  
 (xvi) review actual inventory levels, Sales Returns and Allowances and each Party’s methodologies for charging costs to GenNov for determination of actual results, forecasts, budgets and long range plans and the results of applying
such methodologies; and 
  
 (xvii) review and
coordination with respect to all other financial matters arising under the 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 FSC shall be presented to the JCC or other appropriate Committee as necessary. 
  

	3.	Frequency of Reporting and Other Information Exchange 

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

					
	 Reporting Event
 (Responsible Party)
	 	Frequency	 	Timing of Submission**

  
 ***** 
  

	*	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, Genentech will
supply Novartis and Tanox with*****. 
  
 On a monthly basis,
Novartis will supply Genentech and 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), each of the GenNov Parties will provide the other and Tanox, with*****. On a
quarterly basis (within ***** of the last day of each quarter), each of the GenNov Parties will provide the other GenNov Party, and Novartis shall provide Tanox,*****. In addition, at quarter-closes and year-ends, the Parties shall reasonably
cooperate as 

  

 v 

 
reasonably requested with each other in providing each other with available and estimated results and expenditures for the territories, to meet all
Parties’ respective public reporting requirements, subject always to Article 15 and Sections 20.13 and 5.10(b) of the Agreement. After review by the Finance Sub-Committee as to the amounts, the Finance Sub-Committee will forward each such
report to the JCC and 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 GenNov Parties shall provide each other and Tanox with information as provided in Section 8 below. 
  
 Within ***** after the last day of each quarter, each GenNov Party that is manufacturing Anti-IgE Product in such quarter shall provide to the other and
the FSC a report setting forth (*****. Commencing on ***** and within ***** after the end of each calendar year thereafter, Novartis shall provide to Tanox a*****. 
  
 Genentech will be responsible for the preparation of consolidated reporting of GenNov for the U.S. (including the quarterly
calculation of Net Profit (U.S.) or Net Loss (U.S.), as the case may be, calculated as provided in this Financial Appendix and the Agreement) for purposes of the determination of the cash settlement between Genentech and Novartis for the
U.S., subject to the review and approval of the JCC and the JMC. Novartis will be responsible for the preparation of consolidated reporting of GenNov for Europe (including the quarterly calculation of Net Profit (EUR) or Net Loss (EUR), as the case
may be, calculated as provided in this Financial Appendix) for purposes of the determination of the cash settlement between Genentech and Novartis for Europe, subject to the review and approval of the JCC and the JMC. Review of draft
statements, payments and related matters are set forth in Section 7 below. 
  

	4.	Budget, Forecast and Long Range Plan 

  
 All budgets (which will be prepared annually), forecasts and long range plans will be supplemented with detailed 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 the U.S. and Europe, members of the FSC from Genentech and Novartis are responsible for preparation of the annual U.S. and Europe budgets
for Development, and Commercialization of Anti-IgE Products, and Worldwide budgets for the manufacture of Anti-IgE Products Worldwide, per annual plans developed by the US Brand Team, the Europe Brand Team, the E/US DSC, the MLSC, the JCC and the
JMC. The Parties shall exchange draft and preliminary budgets, budget confirmations and other budget information in accordance with Section 3 above. 
  
 As set forth in Section 3 above (regarding “Forecasts”), within ***** after the end of each calendar quarter:*****. 
  
 The FSC, with the assistance of Genentech and Novartis, will be responsible
for identifying, analyzing and reporting all budget variances. ***** 
  
 A ***** long-range plan ***** will be established on a yearly basis during the Term of the Agreement, under the direction of the JCC, and will be provided to the Parties and submitted to the JMC for approval by ***** of each year, in
accordance with Section 3 above. 
  

 vi 

 *****. 
  

	5.	Definitions 

  
 For purposes of determining 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 Financial Appendix), to be recorded on the GenNov books and records and to be shared by the GenNov Parties under the Agreement, each GenNov Party will use its respective internal accounting systems. As a general matter,
except for costs and expenses specifically authorized to be shared by the GenNov Parties or otherwise allocated to a particular Party, as provided in the definitions and other terms of this Financial Appendix or in accordance with the express
terms of the Agreement and/or any Ancillary Agreements or Related Agreements, all other costs and expenses incurred by any Party in connection with the Development, manufacture or Commercialization of Anti-IgE Products shall be*****. 
  
 For purposes of GenNov 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” means, ***** 
  
 “Cost of Sales” shall mean ***** 
  
 “Commercialization Successor” means the successor to some or
all of a Party’s Commercialization rights under the Agreement (such as, for example, (a) (i) Novartis as a successor to Genentech’s Commercialization rights in the U.S. under Section 18.3(a)(i) of the Agreement, or (ii) Novartis as a
successor to some part of Genentech’s Commercialization rights under the Agreement in the event Novartis were designated — in accordance with the Agreement — to book some portion of sales of Anti-IgE Products in the U.S., or (b) (i)
Genentech as a successor to Novartis’ Commercialization rights in Europe under Section 18.3(b)(ii) of the Agreement, or (ii) Genentech as a successor to some part of Novartis’ Commercialization rights under the Agreement in the event
Genentech were designated — in accordance with the Agreement — to book some portion of sales of Anti-IgE Products in Europe). 
  
 “Development Costs” shall mean: 
  
 (a) With respect to Genentech, 
  
 (i) ***** 
  
 (ii) ***** 
  
 (b) With respect to Novartis and Tanox, an amount equal to 
  
 (i) ***** 
  
 (ii) ***** 
  
 “Distribution/Warehousing Costs” means ***** 
  
 “Excluded Cost” shall have the meaning given thereto in Section 1 of this Financial Appendix. 
  

 vii 

 “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 (U.S.)” means ***** 
  
 “General and
Administrative Costs (EUR)” means ***** 
  
 “GenNov Party” or “GenNov Parties” shall have the meaning set forth in the introduction to this Financial Appendix. 
  
 “Gross Profit (U.S.)” means *****. 
  
 “Gross Profit (EUR)” means *****. 
  
 “Gross Sales (U.S.)” means *****. 
  
 “Gross Sales (EUR)” means *****. 
  
 “Marketing Costs” means,***** 
  
 “Net Profits (U.S.)” or “Net Losses (U.S.)”, as illustrated in paragraph 1 above, means
*****. 
  
 “Net Profits (EUR)” or “Net
Losses (EUR)”, as illustrated in paragraph 1 above, means *****. 
  
 “Net Profits (TANOX)” means *****: 
  
 (i) ***** 
  
 (ii) ***** 
  
 (iii) ***** 
  
 “Net Sales” means Net Sales (U.S.) and/or Net Sales (EUR), as applicable. 
  
 “Net Sales (U.S.)” means *****. 
  
 “Net Sales (EUR)” means ***** 
  
 “Other Operating Income/Expense” means *****: 
  
 (i) ***** 
  

 viii 

 (ii) ***** 
  
 (iii) ***** 
  
 (iv) ***** 
  
 (v) ***** 
  
 (vi) ***** 
  
 (vii) ***** 
  
 “Sales Costs (EUR)”, in Europe, means *****. 
  
 “Sales Costs (U.S.)”, in the United States, means ***** 
  
 “Sales Returns and Allowances (U.S.)” means, *****. 
  
 “Sales Returns and Allowances (EUR)” means, *****

  
 “Tanox Costs and Expenses” shall mean: *****

  
 “Tanox Profit Share” shall mean *****.

  

	6.	Foreign Exchange 

  
 The “Functional Currency” for accounting for Net Profits or Net Losses will be U.S. dollars. 
  
 Genentech and its Affiliates, sublicensees and any Commercialization
Successor will bill and report shipments of Anti-IgE Products in the United States in U.S. Dollars. 
  
 For the purpose of this 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 Genentech and Tanox all currencies will be converted using their respective internal standard currency conversion systems, as generally applied. 
  

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

  
 The responsibility for the reporting to the Finance Sub-Committee, JCC and JMC shall be with Genentech (in close cooperation
with Novartis) in the case of GenNov reporting with respect to the U.S., and shall be with Novartis (in close cooperation with Genentech) in the case of GenNov reporting with respect to Europe. This will be the basis for the GenNov accounting and
determining of payments to the GenNov Parties, as provided in this Section 7. 
  
 The GenNov Parties shall share costs and expenses hereunder, Net Profit or Net Losses (as the case may be) hereunder, by making ***** means balancing payments in U.S. dollars between each GenNov Party such that *****.
Each GenNov Party agrees to make such payments as provided hereunder. 
  

 ix 

 Necessary cash settlements between the GenNov Parties, including means balancing payments by one Party to
reimburse another Party’s *****, will be prepared by Genentech for the U.S. and by Novartis for Europe, for review by the Finance Sub-Committee and review and approval by the JCC and the JMC as provided in the Agreement. 
  
 All payments will be made by any GenNov 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 GenNov Party on behalf of the collaboration, which have been approved in accordance with the Agreement and this Financial
Appendix to be shared through GenNov *****. Genentech shall also be entitled to invoice Novartis, in accordance with Section 6.3 of the JCA and this Financial Appendix. 
  

	8.	Payments to Tanox 

  
 The royalty, Tanox Profit Share milestone, development compensation and manufacturing compensation payments provided under Sections 11.1, 11.2, 11.4,
11.6(a) and 11.6(b) of the Agreement shall be paid to Tanox by Genentech and/or Novartis, as applicable, as set forth in such Sections and Section 11.9 of the Agreement and as further provided below. 
  
 *****, Novartis shall pay to Tanox the amount of any milestone payment that
becomes due and owing to Tanox, on a timely basis. Novartis shall notify Genentech of the amount and payment of any such milestone, and shall be entitled to include such payment in *****. 
  
 As regards the shared ***** royalty on Net Sales (U.S.) of Anti-IgE Products in the United States under Section 11.1(a) of
the Agreement, subject to Section 11.5 of the Agreement, on a ***** basis Genentech shall make such royalty payment to Tanox within ***** after the ending of each *****, and shall be entitled to include such payment in *****. 
  
 As regards the shared royalties on Net Sales (EUR) of Anti-IgE Products in
Europe under Section 11.2 of the Agreement, subject to Section 11.5 of the Agreement, on a ***** basis, Novartis shall make such royalty payment to Tanox within ***** after the ending of each *****, and shall be entitled to include such payment in
*****. 
  
 As regards payments due to Tanox pursuant to Section
11.6(b) of the Agreement, on a ***** basis, Novartis shall make such payment to Tanox within ***** of the end of the ***** following the applicable ***** for which the applicable manufacturing payment was calculated. For purposes of allocating the
payment responsibilities for payments made under Section 11.6(b) of the Agreement, the Worldwide unit sales of Anti-IgE Products for the applicable ***** will be split into the U.S., Europe, East Asia, and ROW unit sales. For each region, the ratio
of unit sales in the region to Worldwide unit sales will be calculated. The ratio of unit sales in a particular region to worldwide unit sales multiplied by the amount payable to Tanox under Section 11.6(b) during such ***** will be the portion of
such payment allocated to that region. Based on the foregoing ratio calculations, amounts allocated to the U.S. and Europe shall be included in ***** for the U.S. and Europe respectively for purposes of the calculations to be made under the
Financial Appendix, and amounts allocated to Rest of World and East Asia will be paid *****. 
  
 Each GenNov Party shall notify the other, at the time of any such payment to Tanox, of the amount, calculation of and payment of any such payments to Tanox hereunder. The Finance Sub-Committee shall review such
payments for consistency of calculation of any payments. 
  
 Novartis shall be solely responsible for calculating, reporting and paying to Tanox the Tanox Profit Share owed to Tanox Section 11.1(c) of the Agreement, and in connection therewith Genentech’s 

  

 x 

 
only responsibility shall be to provide Novartis with the information and supporting documentation reasonably requested by Novartis from Genentech’s
books and records and necessary for Novartis to calculate and evidence appropriate payments to Tanox of any such share of net profit in the United States, including as set forth in this Section 8. In addition, as noted in Section 3 above, on a *****
basis Novartis shall provide Tanox with Novartis’s calculation of *****. Novartis shall pay Tanox the *****. Novartis shall not be entitled to include any such separate obligations in *****. 
  
 Novartis shall be solely responsible for calculating, reporting and paying
any royalty or other payment owed to Tanox on sales of Anti-IgE Products in the ROW and East Asia under the D&L Agreement or other separate agreement entered by Novartis and Tanox. Genentech shall be responsible for calculating, reporting and
paying any royalty owed to Tanox by Genentech under Section 11.1(b) of the Agreement. Neither Genentech nor Novartis shall be entitled to include any such separate royalty obligations in *****. However, each GenNov Party shall provide the other
GenNov Party with any data or information reasonably requested by such other Party (or its Affiliates) for purposes consistent with this Agreement and/or any Related Agreement (including, without limitation, for purposes of internal reporting), or
to permit either Party (or its Affiliates) to satisfy any reporting requirements they may have to Tanox under the Agreement or otherwise. 
  
 Novartis and Genentech shall reimburse any ***** of Tanox, incurred in accordance with the Agreement, within ***** after the end of each ***** in which
such costs were incurred. 
  

	9.	Effective Accounting Date Termination for GenNov 

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

	10.	Guidelines for Charging Development Costs 

  
 ***** 
  
 On an Anti-IgE Product-by-Anti-IgE Product basis, the GenNov Parties shall maintain the foregoing allocation and bearing of Development Costs for the U.S.
and Europe for each Anti-IgE Product under the Agreement from and after the Effective Date of the Agreement, subject to the remaining terms of this paragraph 10. Commencing ***** after the later of (a) the Commercial Launch of the Anti-IgE Product
in the U.S. or (b) the Commercial Launch of the Anti-IgE Product in the ***** country in Europe (the later of the such two dates being referred to herein as the “Allocation Date”), and thereafter on each *****, in the event that marketing
reports (as approved by the JCC and the JMC) for the previous ***** period indicate that relative ***** sales of the Anti-IgE Product in the U.S. and Europe are not *****, then the allocation of Development Costs between the U.S. and Europe for the
following year will be amended to be equal to ***** for the Anti-IgE Product in the U.S. and Europe for the previous ***** period. 
  

	11.	Guideline for Product Sampling 

  
 The Finance Sub-Committee will determine how and when to pass through GenNov as a Marketing Cost in the U.S. or Europe, as the case may be, the cost of
sampling of Anti-IgE Products in the U.S. or Europe, with the cost of such Anti-IgE Product samples to be calculated on the basis of the ***** of the Anti-IgE Product *****. 
  

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