Income Tax Liability. Within ten Business Days after the receipt of revenue agent reports or other written proposals, determinations or assessments of the IRS or any other taxing authority which propose, determine or otherwise set forth positive adjustments to the Tax liability of any “affiliated group” (within the meaning of Section 1504(a)(l) of the Code) which equal or exceed $1,000,000 in the aggregate, telephonic or telecopied notice (confirmed in writing within five (5) Business Days) specifying the nature of the items giving rise to such adjustments and the amounts thereof.

Sublicense Income Payments. Arcus shall pay WuXi a percentage of option exercise fees, annual license fees, license maintenance fees, technology access fees, and clinical, development or regulatory milestone payments, in each case, that it receives from its sublicensees in direct connection with the sublicensees’ grant of rights to the Licensed IP, which payments, if applicable, may be prorated by Arcus, acting in good faith, to determine the proportion of such payments reasonably attributed to the Licensed IP (all such payments, collectively, “Sublicense Income”). Notwithstanding the preceding sentence, Sublicense Income shall exclude # any payments received by Arcus from any sublicensee’s Commercialization of Licensed Products, including royalty payments and sales milestones and # any reimbursements, refunds or amounts paid to support Arcus and/or its Affiliates’ research, development and commercialization activities. The percentage of Sublicense Income owed by Arcus to WuXi is determined by the date on which Arcus enters into the applicable sublicense agreement with the applicable sublicensee:

Taxes on Income. Each Party will be solely responsible for the payment of all taxes imposed on its share of income arising directly or indirectly from the collaborative efforts of the Parties under this Agreement.

In order to comply with all applicable federal or state income tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable federal or state payroll, withholding, income or other taxes, which are the sole and absolute responsibility of Participant, are withheld or collected from Participant.

Income Tax Withholding. Assignor will pay any and all taxes levied on account of any payments made to it under this Agreement. If any taxes are required by law to be withheld by Assignee or an Affiliated Licensee from any payment made to Assignor under this Agreement, Assignee or such Affiliated Licensee shall notify Assignor in writing giving details

“Consolidated Net Income” for any period means the aggregate net income (or loss) of Holdings and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP; provided, that there will be excluded from such net income (loss) (to the extent otherwise included therein), without duplication:

“Profits” or “Losses” means, for each Fiscal Year or other period, an amount equal to the Company’s taxable income or loss for such year or period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments (without duplication):

DTC Eligibility & Market Loss. If the Borrower fails to maintain its status as “DTC Eligible” for any reason, or, if the Conversion Price is less than $0.01 at any time while this Note is outstanding, the principal amount of the Note shall increase by Fifteen Thousand and No/100 United States Dollars ($15,000) (under Holder’s and Borrower’s expectation that any principal amount increase will tack back to the Issue Date). In addition, the Variable Conversion Price shall be redefined to mean forty percent (40%) multiplied by the Market Price, subject to adjustment as provided in this Note.

Any of the following events shall constitute an “Event of Loss” with respect to any ISO Container:

Maximum Cumulative EBITDA Loss. Borrower’s EBITDA loss, measured on a cumulative year-to-date basis as of the last day of each fiscal quarter, shall not exceed: